Responsible Capitalism

Transcription

1 DUBLIN CITY UNIVERSITY - INSTITUTE OF ETHICS Responsible Capitalism 2 nd Annual Lecture Dublin, 21 June 2012 Simone de Colle, DCU Institute of Ethics simone.decolle@dcu.ie

2 Today s Lecture - Outline Responsible Capitalism and Corporate Governance: A Stakeholder Approach (Ed Freeman) Responsible Capitalism 2 nd Annual Lecture Why does Ethics matter in Business? Five perspectives (Simone de Colle) How can we integrate ethics/csr in management systems? A Strategic Programme for CSR (Michael Hopkins) Panel Discussion 2

3 Institute of Ethics Why does Ethics matter in Business? Five perspectives: Stakeholders-Corporate Governance-Risk Management-Value creation- Organisation Identity Simone de Colle DCU Institute of Ethics

4 About the DCU Institute of Ethics DEMENTIA CARE (EU) NAMDIATREAM STUDIOLAB Project GOLDEN (Bocconi/EABIS) Dublin City University TEACHING: BA: Applied Ethics MA in Ethics MBA EXECUTIVE PROGRAMMES: CPD Ethics Module for financial advisors One-day Workshop: Implementing an effective Ethics Programme Code of Ethics Design CSR & Sustainability Strategic advice Social and Ethical Accounting, Auditing & Reporting Ethics Training ad-hoc programmes

5 Responsible Capitalism Preamble: What is Business Ethics? An academic Definition: Business Ethics is philosophical analysis applied to economic institutions at various levels: macro (the market), meso (the company) and micro (the individual).typically: managerial decision-making In other words, Business Ethics is a tool to reach agreement about the moral justification of market rules, corporate strategies and individual behaviour 5

6 Business ethics is based on a theoretical perspective according to which the organisation s stakeholders (Freeman, 1984) are entitled with rights and legitimate claims towards the organisation What is business ethics? So Beyond the philosophical perspective of traditional Business Ethics, Freeman (1984) is there as well an economic & 2010 (practical) rationale for Responsible Capitalism? (=> Stakeholder Theory approach) 6

7 Is ethics relevant in Ireland? 7

8 Why does ethics matter? (1) Increasing demands towards By adopting business from stakeholders Issues New Regulations and Government interventions (eg Sarbanes-Oxley act, 2002) Minimum Competency Customers Code 2011 concerns 1.7 CONTINUING (eg GMOs) PROFESSIONAL DEVELOPMENT (CPD) CPD requirement f) A person must Supply complete Chain at least pressures one hour of CPD each calendar year which (eg ETI) relates to ethics. To explain the ethical issues arising in relation to the conduct of business and the most appropriate means of ensuring ethical behaviour. Risks or opportunities? Liabilities and costs Access to capital Customer satisfaction Licence to operate Employee morale, Staff recruitment and retention Reputation, Trust and Brand Value ISO26000, Irish companies can demonstrate to their stakeholders and their consumers the commitment to making real Issues differences in their business practices, thus increasing their competitiveness and building their reputation. Maurice Socially Buckley, Responsible Investment CEO, NSAI criteria and ethical funds (eg DJSI; FTSE4Good) 72% Crisis of CEOs of Confidence think that (Financial strengthening crisis brand, trust Occupy and reputation Wall Street) is the strongest motivator for taking action on sustainability NGOs actions issues. (eg Boots Pollutes! ) (source: A New Era of Sustainability: UN Global Compact/ Accenture CEO Study 2010 Ethics and CSR Standards (eg SA800, ISO26000)

9 (2) Ethics as a support for good corporate governance Lessons to be learned from the Irish experience: Why does ethics matter? Peter Nyberg s Report: Misjudging Risk, March 2011 A main lesson is the need to make sure that there exist both fora and incentives for leadership and staff to openly discuss and challenge strategies and their implementation such [risk] analyses need to be shared with all relevant parties Corporate ethics programmes can be understood as a way to enhance corporate governance (enabling better understanding of stakeholder interests and expectations) 9

10 (3) The benefits of ethics from a Risk Management perspective " Strengthening corporate culture " Reducing need for (and cost of) control Why does ethics matter? " Defining corporate values and standards " Understanding stakeholder needs and expectations " Prevention of unethical and illegal conduct " Identification of social, environmental and ethical risks

11 (4) The benefits of ethics on value creation: Empirical evidence Why does ethics matter? The Co-operative Bank has estimated that 16 million of its 2000 profits can been directly attributed to the company s ethical stance. Source: ethicalperformance, volume 3, issue 2, June 2001

12 (5) The benefits of ethics: Strengthening corporate identity Management s commitment enhances ability to attract and retain employees and customers Why does ethics matter? 81% of employees who believe that management uphold ethical behaviour in their company would recommend it to potential recruits only 21% if they believe that the management tolerates unethical behaviour 80% of employees in good companies believe customers reward integrity- 40% otherwise KPMG US, 2000 Organizational Integrity Survey Cultural issues are among the key success factors in M&A If cultural issues (e.g. differences in management culture) between purchaser and target are properly addressed, M&A are 26% more likely than average to be successful KPMG UK, 1999 M&A Global Research Report

13 In conclusion By helping managers Why does ethics matter? Responding to stakeholders demands Supporting corporate governance Enhancing Risk Management Contributing to value-creation Strengthening the organization s identity Business Ethics is NOT a set of constraints that limit managerial decision-making, but rather an asset for better strategic management Responsible Capitalism is about creating value for stakeholders thereby generating shareholder value as well

14 Thank you! Responsible Capitalism 2 nd Annual Lecture Dublin, 21 June