More than half of SMEs have no business ethics policy
The majority of businesses agree that the way they interact with customers, suppliers and other businesses is important, with more than half claiming to have been on the receiving end of unethical business practices. Despite this, most SMEs do not have a formal business ethics policy in place.
According to a survey by Close Brothers Asset Finance, around three quarters of small and medium business owners polled said that success was dependent on high standards of business ethics. Yet more than half (55%) said they did not have a business ethics policy, also known as a code of ethics, in place.
More than two fifths of respondents said they didn’t feel they needed an ethics policy and over a third (37%) of SMEs said they felt their company was too small to need one. 10% of respondents said they didn’t even know if their firm had a formal code of ethics in place.
Some 56% of businesses did say that they had themselves been on the receiving end of what they deemed to be unethical behaviour. The way they were perceived outside of their own organisations also seemed to be increasing. More than half of smaller businesses said they had been asked about the ethical practices that existed in their own supply chains.
If a business is struggling or even heading towards insolvency the owners or decision-makers might consider a code of ethics to be a luxury the business cannot really afford. Business ethics can sometimes restrict a company’s abilities to maximise its profits but there are definite advantages too.
A company’s reputation is one of its greatest assets and treating suppliers and even rivals in an ethical manner can help engender trust when it comes to further dealings. Consumers are also increasingly concerned with ethical issues and often show more brand loyalty to businesses they consider to be ethical.
Research from the Institute of Business Ethics (IBE) found that codes of ethics could help improve staff morale and were often a precondition for landing contracts with large companies who were looking to maintain the ethical integrity of their own supply chains.
By Phil Smith
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