Stay or Stray from the Path of Ethics

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Dr. Anita Shantaram, (Head, The Compliance & Ethics Academy) and Ms. Nivedita Dalal

 
“ The true test of character is not how much we know how to do, but how we behave when we don't know what to do.” 
-    John Holt


Abstract:


This article delves into the behavior and manner in which organizations and their employees have responded to the ongoing pandemic, and reaffirms the popular sentiment that for organizations to act ethically and accountably whilst upholding their virtues is now more important than ever.

 

Introduction:


The Covid-19 pandemic has confronted us with unprecedented challenges. It has created an atmosphere of uncertainty and a shift from the usual ways of functioning.  It has exposed the fragility of our institutions, policies and forced us to rethink our ways of working, our goals and values. The paradigm shift has presented businesses with many challenges and ethical dilemmas. 


There are certain questions which have resurfaced such as, “Do our ethics evolve with the changing times?”, “What does prosperity mean?”, “How to generate profit and long term growth without compromising our values?”, “What is the role of businesses and corporates in shaping the culture during such uncertainty?” and “How are the companies treating their employees?”. Maintaining the balance of safety of employees and customers while meeting the demands with shortage of supply requires retailers to re-think their strategies. Innovative approaches for effective crowd management like giving colour coded coupons indicating time slots to customers by D-mart, a compassionate approach of keeping a separate line for frontline workers and seniors citizens by Nature’s Basket etc. increases confidence amongst consumers. Due to disruption in supply chains, retailers have partnered with multiple suppliers to ensure that there is no shortage. It becomes imperative for the businesses to ensure that the disruption in supply chains does not promote dilution of ethical conduct amongst employees as well as third parties. While the economic slowdown accelerated by the pandemic might force businesses, to take harsh decisions in terms of layoffs, alternatives such as pay-cuts should be considered. Practices such as showing an increase in salary while hiding the number of layoffs lead to distrust towards the organization, while instances like the Tata Group promising to pay all its temporary and daily wage workers full salary in the months of lockdown   lead to increase in the trust of the company.
The ‘new normal’ of working from home requires sensitization and a compassionate approach. In a global survey conducted by Monster, an online employment agency, it was observed that over 2/3rd or 69% of employees are experiencing burnout symptoms.  This is happening due to reduced work-life balance and long working hours. Availability at all times, no fixed lunch-dinner hours, anxiousness surrounding low- productivity leading to chances of getting fired, deeply affects the mental health and morale of employees. Efficiency and Productivity are important to meet targets, but there has to be a balance in approach. The managers, bosses should be empathetic towards the time and contribution that one needs to make towards household chores, taking care of kids and families. This would shape more compassionate policies within the organizations and lead to satisfied and motivated employees, thereby increase in long- term productivity.


One would assume that in working from home, as there is no physical presence, there would be no complaints under the Prevention of Sexual Harassment Act, 2013. However, since the lockdown there has been an increase in virtual harassment. Cohere Consultants, a pan-India practice working on sexual harassment and diversity and inclusion in the workplace, has seen a 20% rise in complaints in the past five months . The new subtle form of harassment such as calling at odd hours, insisting to keep videos on, taking screenshots during video calls without permission, inappropriate clothing, sexist remarks, cyberstalking etc. have increased. Gender based discrimination in the form of demanding women to change teams due to them devoting time to household chores, looking after kids is observed. It becomes difficult to complaint regarding these issues on a virtual platform as there is lack of privacy at home to raise a complaint, there is lack of confidence on the confidentiality since recording meetings is easier. Organizations in the middle of many challenges tend do not pay the required focus on this issue. While reporting might be difficult, the companies should review their internal policies and conduct sensitization and training to reduce these forms of harassment and build a safe environment. 
The Global Integrity Report 2020, by EY highlights the need to include personal conduct, third-party management and data integrity in the integrity agenda of corporate to navigate the ethical challenges faced during the pandemic.   It is evidenced in the report, that in times of crisis, the personal conduct of individuals can be the first to fall. Fraud risk factors increase at the time of crisis because companies and individuals face more financial pressures, the opportunity for fraud increases, if key internal control weakens and people find it easier to rationalize their actions. All frauds require three key elements to be present- opportunity, pressure and rationalization known as the fraud triangle.  Under the garb of business continuity, many controls are relaxed by companies. Fluctuating market conditions, pressure to deliver faster results may result in one succumbing to taking unethical routes or short-cuts. Adhering to regulatory compliances, paying all stakeholders should not be compromised. With working from home and reduced monitoring, chances of data breaches is increased.  Focus on improving the cyber security must be undertaken. Employees should be trained on the legal framework surrounding Data Protection and Privacy. The Global Integrity Report 2020, showed that the higher the position of the employee, the more are chances of him acting unethically. Senior employees are more likely to justify unethical behavior such as ignoring unethical conduct in their team, misleading external parties such as auditors or regulators or offering/accepting a bribe in order to boost their own career progression or remuneration.  

 Thus, as an organization, focus on building stronger check-routes, internal reporting mechanisms must be made applicable to employees at all levels. 


Value sets priorities and ethics sets boundaries. Personal values reflect what matters most to us, as an individual thus shapes the way we behave. When personal values are in alignment with those of the organization employees feel a sense of connection and are able to bring their full selves to work in commitment to its purpose. The Senior employees and the board , set a tone for the organization and define the standards of behaviour and code of conduct. An initiative from the top management voluntarily giving up on travel allowance/taking a pay cut due to reduced travel expenses may motivate the junior employees to do so. It is important for the Management to boost the morale of the employees and make decisions that further the values and goals of the organization. Thus, the onus is more on the leaders to adhere to the standards of integrity and nudge the junior employees in the right direction.


Conclusion:


The Barret Values Center conducted a research on the impact of the pandemic on the culture of organizations. It is observed that there has been a shift in values individually and as an organization. Well being as a value has shifted from #26 to #5 in importance to people personally during covid.  Results orientation as an organisation value has shifted from #2 to # 25. Achievement has shifted from #6 to #50. The focus is more towards innovation, employee well being, agility etc.   When the organization adopts the shift in values and makes changes in its systems, the employees would feel a sense of belonging and are motivated towards furthering the goals. These values act as a guiding light and act as a benchmark that businesses should strive to achieve.  The current pandemic is a defining moment for businesses that is going to test their foundation. Every organization would have areas where they uphold and practice ethics in the highest regard, but would also have certain areas where ethics is not adhered to completely. Growth takes place when there is improvement in those unethical areas. By building trust and confidence among all stakeholders, sharing information, maintain transparency, complying to norms, making fair decisions, an ethical culture would be created. Thus, by staying on the path of ethics, the organizations would be able to withstand these current challenges, generate new businesses and achieve long term growth.