Size doesn’t matter in fraud prevention
While most business people can talk with ease about fraud and corruption, they have more difficulty talking about the ethical conduct that they would like to see in business. Very simply, business ethics revolve around actions that balance self-interests with the interests of others, and with the greater good. Taking or assigning responsibility for ensuring that business ethics is being practiced is however not as simple.
For larger companies, it has become common practice to appoint an ethics officer. This incline in the appointment of ethics officers is mostly due to the various corporate governance developments and regulations. Smaller companies or organisations aren’t as strictly governed and regulated, and might therefore be unaware of the value of appointing an ethics officer.
“There are many sound business reasons supporting the rationale for creating a position for an ethics officer, no matter the size of the organisation,” says Professor Deon Rossouw, CEO of the Ethics Institute of South Africa (EthicsSA).
“At a broader level, widespread adoption of King III and similar codes, and the integration of many of its principles into law (such as the Companies Act) is testimony to the fact that good governance makes for good business. In the public sector, the Integrity Management Framework, which was adopted by Cabinet in 2013, requires that all national and provincial departments have an ethics officer.”
According to Professor Rossouw, these codes and regulations came into existence because there is a business need for them, but businesses don’t necessarily understand what value an ethics officer can offer to the company. It is however easy to determine whether a business requires an ethics officer, with the following signs being the most obvious.
Double standards for unethical conduct
An ethics officer is more than a signal or a guarantee of a company’s bona fides. He or she can help to prevent fraud, corruption and other malpractices from occurring by actively managing corporate ethics and building an ethical culture. Ethics tends to be an all-or-nothing game, and companies that tolerate unethical behaviour in certain areas quickly become rotten. Poor employee morale, high staff turnover, constant litigation: all of these cost money and time, ultimately acting as a brake on growth.
Employees are unsure of how to deal with unethical conduct
The business environment is much more complex than it used to be, and its complexity is increasing. Navigating tricky ethical issues is increasingly something that requires professional expertise—common sense on its own (always in short supply anyway) is no longer a reliable guide. Ethics officers become the de facto helpline for company employees on all ethical issues.
Stakeholders are concerned about fraud in the business
Investors, business partners and customers all are asking harder questions to ensure that companies with which they do business are ethical. As the 2013/2014 Global Fraud Report shows, global fraud is on the increase. An ethics officer acts as a signal that the company is serious about maintaining a high ethical standard.
Whistle-blowing data not analysed
Ethical officers act as a clearing house for all ethical issues. Noteworthy added value they bring is the analysis of a company’s whistle-blowing data to look for trends.
“Ethics officers are often appointed from amongst a company’s own staff in addition to other duties, and that is certainly a good option for smaller companies,” Professor Rossouw concludes. “However, training and certification are absolutely essential to ensure that the ethics officer is empowered and can deliver the maximum business value.”
Picture courtesy of www.fatima-group.com
On Sunday, the whole of South Africa cheered...
DebtSafe advises consumers to save on monthly expenses. The company, specialising in Debt Review, recently released its results of a survey about spending and saving habits of consumers in South Africa.
Male sexual enhancement pills are considered to be one of the most counterfeited drugs in the world and according to the latest statistics, South Africans are among the biggest consumers of black market aphrodisiacs.
The hospitality industry has often suffered criticism for being slow on the technology uptake...
Democratic Alliance (DA) Shadow Minister of Environmental Affairs, Thomas Hadebe, has said that party will launch an investigation with the Green Scorpions into the flowing of raw sewage water into the Swartkops River, which has amounted to “192 mega litres” since a pipe burst 15 weeks ago.
An application by various media houses to have Parliament show uninterrupted proceedings of events taking place in the Chamber, has been rejected by the Western Cape High Court.
Parliament has released a document showing the six questions that will be answered by President Jacob Zuma during his questions and answers session in the National Assembly on Wednesday.
Power utility, Eskom, has announced a medium to high probability of it implementing load-shedding for Monday...
Agang SA Deputy President, Andries Tlouamma, is reportedly facing a motion of confidence from his own party, after withdrawing a similar claim against President Jacob Zuma last week.
The Acting Chairperson of the SABC Board, Professor Mbulaheni Obert Maghuve, has rejected the Democratic Alliance’s (DA) call for the broadcaster’s former Chairperson, Ellen Tshabalala, to pay back the R1.3-million in salaries she received during her 22 month tenure.
- 'Classes' suspended at NMMU on Monday to allow for mediation process
- Port Elizabeth man arrested in connection with mystery murder at Pine Lodge Resort
- Nelson Mandela Bay Business Chamber throws weight behind NMMU
- Port Elizabeth man slapped with 10-year jail term for attempted murder
- TRUMPED! A home owner can be evicted as an unlawful occupier