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Why be ethical in business?
If we’re discussing ethics, it’s important to remember that ethical business operations can and often do lead to more profitable businesses. JUST Capital, an organization that conducts research to look for this correlation, came out with a series of studies that show that the most ethical companies consistently outperform industry competitors. JUST Capital is a non-profit that tracks “just behavior” within America’s largest public companies. Good corporate behavior was determined by JUST Capital through polls to more than 50,000 Americans. Metrics and responsibilities that the public cares about end up measuring corporate justness for the largest 897 U.S. public companies.
The most recent study showed that the stock market index based on the 2016 JUST Capital rankings outperformed the Russell 1000 index. Many of these companies also generated a 3.5% higher 5-year ROI, paid 20% more workers living wages, had more gender diversity within board membership, created 1.8x more jobs in America, and much more. To read all of the additional impressive feats that top-performing public companies accomplished regarding social justice, read this article.
How to be ethical in business?
Now that we know being ethical is not only good for society also may be an indicator of business success, let’s get into defining and explaining ethics in business. Business ethics are usually moral guidelines for a company to follow when decisions are made for deciding on how to conduct operations, treat stakeholders, and more. Often, these ethics are dependent on the personal ethics of a company’s executive leadership. That’s why it’s crucial as a business student to learn about ethics and prioritize certain values in your daily life. Ethical behavior is based on the below positive traits, among many others!
Important traits for ethics:
- Transparency
- Honesty
- Respect
- Empathy
- Accountability
- Responsibility
- Many other ones as well
To learn more about these and other values necessary for strong ethics, read this article. Ethical company behavior is always in the news for any and every industry, so it’s a hugely important topic to be aware of and educated on.
