The VW fall-out continues, with senior level resignations and inevitable sanctions to follow. ‘The Brand’ is in serious trouble, inside and out. Eight years on from the corporate governance scandals that brought about financial meltdown, have lessons really been learnt – and more importantly, are companies genuinely embracing principles-based decision-making and greater transparency to increase trust in their business?
Apparently not, according to a new report by the CIPD. This extensive research, based on a survey of 3,500 business leaders and 2,200 HR practitioners around the world, explores ethical decision-making in business and the values that influence corporate behaviour. And the findings are quite startling:
> Only 1 in 4 business leaders and HR practitioners said they are ‘always’ prepared to make short-term sacrifices for the long-term interests of people, organisations and society.
> Three-quarters of business leaders describe employees’ ability to influence decisions that affect them as either ‘nice to have but not imperative’ or as ‘applying but can be compromised’.
> 29% of business leaders and 34% of HR practitioners report they have to compromise their principles to meet current business needs.
> Only 48% of business leaders and HR practitioners in the survey believe that their core values cannot be compromised whatever the context.
> Perhaps most damagingly from an EVP perspective, 22% of business leaders and 21% of HR practitioners say they have to compromise on their principles because they affect their ability to succeed in their organisation.
> And there’s clearly a disconnect between legal obligations and moral responsibilities: with 37% of business leaders (and 43% of HR practitioners) saying decisions by their company are justified as long as they follow the laws of the country; compared to 63% (57% of HR practitioners) who believe their organisation should take account of the moral responsibility it has for employees.
The CIPD Chief Executive Peter Cheese says: “The VW scandal is a stark reminder that organisations – particularly large and complex ones – need to think carefully about how they create organisational culture and how they increase the chance that people at all levels of the organisation will make ethically sound decisions”.
But it would appear that this focus on short-term means that the next corporate scandal (and ruined EVP) is already in the pipeline.