The role of ethics in business is twofold, according to Jozef D. Zalot, Ph.D., an assistant professor in the Department of Religious and Pastoral Studies at College of Mount St. Joseph.
“First there are the legal issues. We’re seeing developments such as the Sarbanes-Oxley Act of 2002 which attempt to codify in some way the legal repercussions for corporations when employees break the law,” says Dr. Zalot.
“Second are the moral issues,” he adds. “Many people are realizing that the actions of corporations can and do harm people. As a result they’re demanding both change and accountability.”
Smart Business spoke with Dr. Zalot about business ethics from the theological perspective and the benefits of having a formal code of ethics in place.
What are the benefits of having a strong ethical code firmly established and upheld in a company?
A code of ethics gives employees, shareholders and stakeholders guidance for what will and will not be tolerated. It also gives managers criteria for disciplining, firing or even promoting employees. In some cases it may even help shield a company from liability.
A code of ethics can also help corporations avoid unfavorable media coverage, a tarnished reputation, lost profits and other negative consequences that can result from unethical behaviors.
How does a CEO go about establishing a code of ethics?
A code of ethics needs to be clearly defined, supported, practiced and applied from the top down. It needs to be developed with the input of as many people as possible, at all levels of the company.
Additionally, it has to be an adaptable, living document. The company has to examine it at least once a year to make sure it still applies. They need to ask questions such as, What’s right? What’s not? What do we need to add? Remove?
Communication and feedback are key.
What is the role of religious beliefs or faith in the business world?
Faith is a very important and influential piece of many peoples’ lives and should be a part of how they do business. Many Christian churches hold that through our work we are cooperating with God’s creative activity. The whole attitude of it’s just business just doesn’t cut it anymore.
We spend so much time at work that our work lives define who we are as people. Pope John Paul II addressed this when he discussed the subjective nature of work.
Vatican II and U.S. Conference of Catholic Bishops documents indicate that this attempt at separation this idea that we can separate our private lives from our business lives is one of the biggest errors of our time.
How can corporations apply specific theological principles to their business activities to hopefully make them more ethical?
We can’t tell corporations what to do, but we can give them a framework moral principles on which they can evaluate themselves while doing business.
The first principle of Catholic Social Teaching is human dignity. While profit is important, people have to come first. Under this principle, the business needs to ask: What is our purpose? Profit? Power? Something else? What are we doing? What are we producing? Are we upholding human dignity in what we do?
In looking at other principles such as community, common good and solidarity, the corporation must consider the common good of all stakeholders. If, for example, the company does business globally, is it acting ethically so as not to exploit workers in foreign countries?
In regard to the principle of stewardship, the corporation must ask, How are we acting as stewards of the created order? Are we using resources wisely? Overconsuming? Hurting the environment?
As for the preferential option for the poor, the corporation must explore whether it is providing opportunities for the less advantaged: Do we provide employment opportunities? Locate in areas where people need jobs? Help people by giving them the means to succeed through their own work?
How can businesspeople live their faith in daily business dealings?
They can act in such a way at work that they would at home, with friends, family members, at church. They can respect and treat people as they want to be respected and treated.
When you look at it from these perspectives, it just doesn’t make sense to lie, cheat or steal in the workplace.
Jozef D. Zalot, Ph.D., is an assistant professor in the Department of Religious and Pastoral Studies at College of Mount St. Joseph. Reach him at (513) 244-4212 or firstname.lastname@example.org.