With the prevalence of social media and the ease of accessing information through technology, training your employees on ethics is more important than ever. Every single decision has the chance to drastically affect how the public perceives a company.
Companies that have invested in ethical compliance education for their entire staff have achieved praise from critics and fervent support from consumers. Conversely, companies that have shirked this responsibility have been met with exorbitant legal battles, vocally dissatisfied customers, and critical condemnation.
Although many aspects of business ethics seem obvious, every decision made has an ethical component. Without a clearly defined and understood corporate code of ethics, seemingly insignificant decisions can lead to enormously expensive legal gray areas.
You can never take it back
In an attempt to solidify his core demographic, Mike Jeffries, the CEO of clothing retailer Abercrombie & Fitch, publicly belittled the people he felt did not fit the company’s image. During an interview, he casually condemned those who did not meet the brand’s image as being unworthy of wearing their clothes. Consumers found this statement to be offensive and unethical, resulting in a 15% drop in sales and a 10% drop in share price[i]. However, the remarkable part of this incident is that the backlash came six years after the comments were made.
In 2013, social media websites brought the CEO’s comments to a much larger audience than imagined at the time of the interview. The permanent and public nature of social media and electronic record keeping changed a forgotten comment into an irreversible and hugely expensive PR nightmare. Almost every major news outlet picked up the story and these articles still appear prominently with a simple Google search of Abercrombie & Fitch.
The CEO’s unethical comment, along with ethical issues of racial discrimination in hiring practices, have resulted in millions of dollars in legal fees, a diminished clientele, and highly expensive restructuring of ethical training and policies for A&F. However, offhand remarks or discriminatory hiring practices are by no means the only unethical actions with drastic tolls on businesses.
Who owns the information?
Poorly drafted IT policies regarding the ownership of information created on company computers can also place a business at risk of being perceived as unethical. The lack of clear policies and workforce training regarding the content of e-mails, accessing social media, and personal communications on company computers create easy opportunities for issues of harassment. Only proper training in ethical use can help shield a company from liability.
Ethical decision-making has a direct and profound impact on a company’s brand and can result in substantial expenses if not handled properly. Taking ethical compliance education seriously, drafting and implementing clear policies and guidelines are of vital importance in today’s business.
Interested in safeguarding your business from ethical issues? Click here to learn more about Merit Career Development’s business ethics training courses and consulting services.
© 2014 Merit Career Development. All rights reserved. For more information, please contact Jim Wynne at jwynne@MeritCD.com.