HR has a vital role to play in promoting business ethics, according to former Charter International and Cable & Wireless HR director Ian Muir.
Mr Muir has recently authored a report, Tone from the top, published by Kuldeep Associates, which was founded by Muir and sponsored by Ashridge Business School. The report investigates the role played by boards in providing ethical leadership. Its findings suggest that good business practice begins from the top, with a good chairman.
Speaking to HR Magazine, Mr Muir said the study looks at various failures of business ethics which have occurred over recent years, including the Libor and PPI misselling scandals.
It finds there are few sectors which remain irreproachable. There have been ethical failures in the public and private sectors: Staffordshire NHS Trust, the BBC, Amazon and Google were recently involved in cases of bad practice.
As businesses now operate in a more transparent world, Mr Muir says they should carefully consider the ethical tone they set from the top.
HR can play a vital role in delivering the message about good business ethics and HR directors should rise to the challenge.
Mr Muir said: "It's a golden opportunity for HR because it's about culture, it's about leadership, values, the principles and the way in which companies do things … I think a number of HR directors need to get closer to the chairman of the company and build a stronger relationship with the non-executive directors and help them the board get closer with line managers."
Although ethical risk cannot be eliminated, it can be minimised, the report finds. HR can identify the sources of bad practice and help to build 'moral backbone' through training, recruitment and assessment processes.
Three sources of bad practice are identified: bad apples, who have inappropriate morals; foolish apples, who unwittingly do the wrong thing; and pressured apples, who behave inappropriately when a situation encourages them to do so.
The report also encourages employees to speak out against bad practice. Management has a crucial role to play in ensuring that the right environment of openness and honesty is created to give employees the confidence to voice their concerns.