Nurturing a good culture can actively reduce business risk
Businesses should actively promote ethical decision-making if they truly want to reduce the risk of a Volkswagen-scale scandal. Writing in Ethical Corporation, Michael Pollitt argues that businesses need to ensure that the behaviours they promote are not just in line with company values, but that they actively promote ethical decision-making and good conduct.
As countless headlines have shown, it is often the ethical aspects of a company’s culture that lead to reputation-damaging scandals that devastate shareholder value and, with it, the company’s chances of long-term success. Indeed, in its consultation on the Corporate Governance Code, the FRC states that poor culture is a significant business risk in itself.
Posted June 2018