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Ethical trading depends on more than internal business practices and
culture: a company’s materials, suppliers, and business partners must also
be ethically sound. To aid transparency, some companies and organizations
publish data on aspects of their business, such as production locations,
energy mix, recycling levels, and diversity among employees.teamwork and communication
between the board and the CEO. A
board that has a defined structure
and a healthy culture of debate will
be more likely to recognize emerging
problems and take timely,
appropriate action.
This was not the case at Enron, a
company that has become one of the
most infamous examples of
unethical leadership. The Enron
Corporation started as a small gas-
pipeline business in the US and
grew to become the nation’s
seventh-largest publicly held
corporation. CEO Jeffery Skilling
actively cultivated a culture that
would push limits; his mantra was
“do it right, do it now, and do it
better.” But despite a clear set of
values for employees to espouse,
executives manipulated accounting
rules and disguised enormous losses
and liabilities. Enron collapsed in
2001; Skilling and chairman Ken Lay
were tried together on 46 counts,
including money laundering, bank
fraud, insider trading, and conspiracy.
Doing the right thing
British fashion brand Ted Baker
began life as a shirt specialist in
Glasgow, Scotland, in 1988, and
now has stores in the Americas,
Europe, Asia, and the Middle East.
The company is known for its
irreverent designs, but in contrast
to its styling, it strives to be an
exemplar in the way it runs its
business. To make this a reality
rather than just a statement on
its website, Ted Baker strives to
ensure that environmental, social,
and ethical matters are integral
to its business operations, so that
employees are always in tune
with its high standards.
Ted Baker has set targets to
continuously improve the overall
sustainability of its collections, so
employees know what they have to
achieve. It is also committed to
measuring and publishing its
progress against sustainability
targets and has a full-time “green
guardian” to focus on improvement.
The company also has a “Conscience
Team,” made up of people from
across the organization, which is
responsible for addressing social,
environmental, and ethical issues.
Ethical companies often
demonstrate ethical commitment by
partnering with organizations that
can help them to improve their
standards. Ted Baker is a member of
Made-by, a European not-for-profit
organization that strives to improve
social and environmental conditions
in the fashion industry and to makeWORKING WITH A VISION
sustainable fashion common
practice. Any company partnering
with Made-by must analyze the
ethics of every aspect of operations,
from the fibers used in products to
factory conditions for workers.
Companies can also inspire
customers to act in a socially
conscious way: some garments
carry a symbol of a crossed-out
trash can, encouraging consumers
to recycle them.
Ethical business is also good
business. Customers are attracted to
companies they can feel good about,
more talented staff is attracted and
stays longer, and shareholders are
shielded from the type of share-price
falls that overtook Enron. ■Energy mix Disposal of waste Employee diversity