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MGK & Associates

The cost of ethics

by | May 7, 2018 | Business Ethics, Uncategorized

A few years ago I organised and co-hosted a dinner in Johannesburg at which the Vice-Chancellor of Oxford University spoke. In attendance were the vice-chancellors of a number of South African universities, and some of the academics published by my (then) employer.

Among them was a young-looking professor and decent bloke from the University of Pretoria, Steve Cornelius. An NRF-rated scholar, now head of the Department of Private Law and a sports law fundi, he’d just co-authored a book on the law of commerce. I remember that, at the dinner, he said to me he wondered what he’d done to be included on the guest list among persons he esteemed.

I think that in this last week, he demonstrated exactly why.

He resigned as a member of the International Association of Athletics Federations (IAAF) Disciplinary Tribunal over the IAAF’s introduction of new rules governing the testosterone levels of female athletes in a move widely seen to rein in world 800m and 1500m record holder Caster Semenya.

On Twitter, Prof Cornelius’s letter to IAAF president Sebastian Coe was widely circulated by a colleague, Greg Ioannides, and then picked up by other media. I include a link to it below.

In summary Prof Cornelius says: “I cannot in good conscience continue to associate myself with an organisation which insists on ostracising certain individuals, all of them female, for no reason other than being what they were born to be.

“On deep moral grounds I cannot see myself being part of a system in which I may well be called upon to apply regulations which I deem to be fundamentally flawed . . . “

Upholding ethical standards can be costly to individuals and to businesses.

Look at Steve Cornelius as an example of the first. The appointment to the IAAF Tribunal in 2017 was no doubt one of the highlights in his career so far. He’s stepped away from that because he sees the intent of the IAAF to coerce persons to be other than they are as a contravention of human rights and counter to his personal ethics.

I’m not writing about his actions to put him on a pedestal. Rather, I want to demonstrate that he acted according to his personal system of integrity (informed, of course, by the law). He used his position to draw attention to an ethical issue.

Thuli Madonsela highlighted this concept in a recent talk. I’ll return to that in a minute.

Regarding cost to business, when I conduct risk assessments for an organisation (to show where there are gaps in its governance), I often ask when last the business walked away from a deal because they had information (or even, ‘a bad feeling’) about the business partner.

The answers can be quite telling. An organisation can ‘lose out’ financially when saying ‘no’ to a deal because said deal does not fit with its ethical code or is just plain poor governance. Of course, in the long run, the decision may produce other dividends, such as the enhanced reputation of the business, but this is not guaranteed. There may well continue to be a monetary loss associated with the ethical stance.

Which brings me to back to what Prof Madonsela said.

Speaking at a University of Stellenbosch Graduate School of Business event in March, the former Public Protector urged business people to act in the interest of social justice even when this did not produce obvious financial reward.

I want to expand on three ways (which were mentioned) of doing this.

First, we business people can do a quick ethical check re the impact of our decisions on customers, suppliers, and community.

One way is to ask the question: “If I take X decision, what will the impact on my customers be?” (Think about Tiger Brands’ health process omissions at its SA plants which led to deaths from listeriosis. Someone in the Tiger Brands management chain took the decision to allow slack hygiene, a decision which has had legal, and ethical, dimensions.)

A second way is for those of us who are privileged (and I count myself in that group) to decide not to deny privilege but to use it. We can decide to support social enterprise. We can leverage our own resources to help someone else make their enterprise work.

Thirdly, as Prof Madonsela showed during her tenure as Public Protector by enabling whistleblowers to have their say, we can demonstrate social accountability. She referred to the fact that the Gupta leaks which led to her State capture report were due to ordinary people being witnesses to what was going on – and doing something about it.

 

References

Ioannides, G. (2018). ‘My colleague Steve Cornelius shows why integrity and fairness cannot serve anachronistic and prejudicial ideas in self-regulation.’ 29 April, viewed 1 May 2018 https://twitter.com/LawTop20/status/990519066577252352/photo/1

Madonsela, T. (2018). ‘Human rights in a fractured world – what can business do?’. 9 March, University of Stellenbosch Graduate School of Business

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