Introduction

The unexamined life is not worth living
Baruch Spinoza (1634-1677)

Ethics is no longer a purely personal concern. Nor is it something that organisational leaders can take for granted. The waves of corporate and political scandals that have characterised the emergence of the global marketplace highlight how institutionalised greed has made ethics everyone's concern. While business is widely recognised as the most powerful force in raising living standards and promoting democratically elected governments, its shadow side is equally influential. The corporation's potential for causing physical, mental and financial injury to employees, customers, community, the national economy and the natural environment has also been highlighted by celebrity cases drawn from corporate case histories. Today, a well-tuned sense of the ethical has become a 'must have' for those in business wishing to create and belong to sustainable enterprises, as well as for the average person in the street who is concerned about who they work for, who they buy from and who they invest in. Therefore we have written this primer.

Business ethics is set to become a locus of discontent in the 21st Century as the world of commerce - predominantly without national boundaries or electorates - becomes the major shaper of the global commons. Business will determine the quality of the air we breathe, the fuel we burn, the food we eat and the water we drink. So too, it is business which will shape the emergence of a global society by determining who is included, who is informed, who gets what and which human rights are enshrined in the global workplace. Business then is now seen to have the potential to enhance or destabilise social progress in equal measure. This ethics primer will help business leaders create a mission, vision and values program for their organisation which addresses these issues through including stakeholder interests and in doing so sustains improved performance.

We can no longer look to the past to define the ethical dimension. The goal posts for business ethics have changed dramatically, and will go on changing - so we need to become much more comfortable with this debate. What is deemed to be 'ethical' or 'unethical' will define tomorrow's social acceptability and, in a wider sense, what comes to be regarded as our social reality. While global values may be lived out differently in different countries, increasingly there is universal agreement on the unacceptability of certain business practices as well as what good practices in corporate social responsibility look like. This is already producing a proliferation of voluntary and regulatory behaviour codes designed to weave an ethical safety net below the global marketplace. It articulates a new vision of capitalism that accentuates mutually beneficial accountabilities as the basis of a healthy relationship between business and society's interests. This primer helps businesses to build that relationship.

Here in the West, the notional divide between the short-term, narrow interests of shareholders and accountability to a wider group of stakeholders continues to be hotly debated even as a global era in stakeholder capitalism is being forged. The polarisation of the world into East and West no longer holds. European and Asian countries subscribe to a much more communitarian model of capitalism while America and Australia cling to the individualist model. Changing social values will encourage major institutional investors and pension managers increasingly to put a brake on the short-term focus of the market place. This will encourage greater accountability from boards of directors and business leaders to better balance the interests of different stakeholders - to ensure that what is good for business is also what is good for society. Employees, who cannot swap their employers as easily as investors can swap their investments, will increase their demands to be recognised as critical organisational stakeholders. Employees have personal needs which they seek to have satisfied from their work experiences and who, like shareholders, also carry significant risks that justify greater inclusion in the decisions which affect them.

In 'Three Dimensional Ethics: Implementing Workplace Values' three 'personalities' of ethics - individual, organisational and social - converge into a connected whole. Their application demonstrates consistent and predictable behaviour, aligned to stated personal, workplace and democratic values, which are increasingly sought by employees, business and society for sustainable business.

No longer is business permitted to sit outside society merely co-existing with it uncomfortably. Businesses' licenses to operate exist both within the law and the community. Individuals are no longer prepared to separate the identity of the person they are at work from the person they are outside work. Ethics happens in three dimensions (personal, workplace and social) and these dimensions play together as parts of a family whole. We coined the phrase '3D Ethics' to helpreaders better understand the ever-changing relationship between the dimensions of your personal values, workplace requirements and social expectations.

Recently, a retiring partner in an accounting firm, in looking back over a long and distinguished career, lamented that ethics is no longer something that is within individuals. It is something that now needs to be taught as part of a university curriculum or on an executive retreat. Similarly, a high school principal explained how her school had recently introduced ethics as a senior subject as teachers were concerned at the decline in values such as honesty. As an example she pointed to the fact that today, a mobile phone found in the school corridor is now assumed to be the property of the finder, while the value of respect could no longer be assumed and had to be earned daily.

On the positive side, the compartmentalisation of life that was customary in the 60's and 70's is no longer acceptable to generations of young people brought up in a networked world where transparency and accountability have converged as a new priority value. The 'include me' world of electronic messaging, email, internet and intranet relationships no longer facilitates notions of 'private vice/public virtue'. 'Walk the talk' has become a mantra for an increasingly educated and informed populace that demands integrity from the public institutions that dominate their lives.

In a world where 51 of the top economies are corporations; where the turnover of the top 200 companies is equal to one quarter of the world's economic activity; where the GDP of General Motors is greater than that of Denmark; where many global corporations employ more people than nation states; where an estimated 40,000 corporations transcend national boundaries and where 40% of all the world's media is controlled by five transnational corporations (TNCs), it is no wonder that people have become increasingly demanding about the accountabilities of big business.

In successive surveys of public opinion, the World Economic Forum (WEF) has found that multinational corporations sit second top of the list of least trusted institutions. It is perhaps of greater concern that democratically elected governments came top of the least trusted. The remediation of business has become a pressing concern for all leaders of multinational corporations - which explains the emergence of corporate governance and corporate social responsibility (CSR) as two critical areas of management strategy and operations in leading global companies, and why the debate on business ethics is here to stay.

In this layman's introduction to business ethics, we have used metaphors and models to illustrate the important elements of the ethical dimension of 21st Century life. In searching for a concept that would best capture the complexity of themodern business ethics debate, the metaphor that came to mind was that of a prism. A dictionary definition of a 'prism' is a transparent body used for separating white light passed through it into a spectrum for reflecting beams of light, or a medium that represents whatever is seen through it. For us, this perfectly symbolises the life of an organisation. The white light in this instance represents the traditional self image of the corporation, inherently serving society as it brings economic prosperity and employment to a grateful society, a closed system not subject to scrutiny by a trusting world. In the 70s and 80s, a mirror would have been an appropriate metaphor for business, deflecting any internal scrutiny and acting as a shield from the glare of social inspection. But times have changed. Today, society does indeed expect that light to be transparent and the corporation to be much more transparent in its dealings with all of its stakeholders - the market, employees and society at large. But for this to happen, the organisation has to recognise that it cannot be all things to all people. Business organisations, in particular, cannot display multiple personalities depending on which way they are facing. Integrity is about displaying behaviours which are consistent with your values no matter which 'audience' you are speaking to. Shareholders must see the same face as employees, as must governments as represented by regulators, as must the wider stakeholder community.

A prism, then, is a useful metaphor for describing how we see business today, too often prepared to be whatever people choose to see it as; what the shareholders need to see versus what the regulators need to see; what primary stakeholders such as investors need to see versus what secondary stakeholders such as the media or lobby groups should know; what it's like to work there versus how the wider society sees the organisation as manifested in its advertising.

What business needs to do is turn a prism into a lens, through which its various elements and constituents can seen focused into a single 'personality'. In this way the organisation, made up of many parts, becomes the same thing to all people.

We hope this image may help to illustrate how the perspective we take on events shapes our understanding of those events - and how other stakeholders might take quite different perspectives to us. The prism, lens and mirror (magnifying glass and microscope) are used as educational icons in this primer's panel features to reinforce these metaphors. We hope to bring a deeper understanding of the interdependent role of business, individuals and society in shaping who we are; how we choose to act in the world; and the sort of world we bring forth for the next generation.

Today, business is subject to a myriad of influences that require managers and leaders to equip themselves with new knowledge and skills - to manage complexity and address the emotional as well as the financial aspects of corporate life. Study after study has pointed to the sense of inadequacy felt by those chargedwith running our major corporations. The corporation is now a complex web of relationships operating principally as a social organism. This has left many responsible for managing it poorly matched to, or equipped for, the task at hand. Added to this is the growing expectation that corporations understand the need to behave ethically in managing the social assets with which they are entrusted: employees' superannuation and pension funds; the interests of the communities in which they are embedded; the safety of employees and customers; the safety and welfare of consumers who use their products and services; the financial interests of 'mom and pop' investors; the natural environment with which they interact and for which they are responsible; the social welfare of citizens of other countries from which they buy materials and inventory; and the integrity of the marketplace itself in promoting social interests. How the organisation interprets and responds to these multiple inputs and turns them into complex spectra of light in the form of positive outputs will ultimately shape the ethical landscape of business and determine its future and its fate.

Ethical standards are not set by business but by society as a whole. It is this interface with society's expectations and the way business gets done that is shaping the public debate in which the nature of business ethics is being defined. The new social contract currently being fashioned between business and society, which arises from the environmental and corporate social responsibility movements, will ensure that the ethical debate that surrounds the extent of business accountabilities will continue to gather momentum. Business leaders will continue to be pressed to move out from behind - as well as to move beyond - legal compliance. They must step up to the challenge of explicitly managing stakeholder accountabilities arising from the impact of their products and services as the ethical dimension of their enterprises.

21st Century corporate governance requires an ethical strategy for core business activities that takes account of the potential negative impacts of the corporation and its products and services. An ethical strategy also seeks to balance the positive benefits and attributes of the output of the business with a clear acknowledgment of the potential harmful effects so that stakeholders can make informed choices about buying from or working with the business. On the big social issues it's time for business leaders to find their voice and become comfortable with both speaking out and speaking up. It is no longer enough to manage in isolation and feel satisfied that 'I'm doing my bit' because today, organisational reputations rise and fall by industry and not by individual organisation. If one bank is seen to be greedy and callous, all banks are tarred with the same brush. One energy company promotes dodgy practices, and the whole energy industry comes under public scrutiny. If business leaders, as society's most powerful leaders, are to raise the ethical baseline then they must join with other social leaders and advocate progressive social accountabilities. Already there are many corporate leaders who have stepped up to this task and have not sacrificed business success by so doing. The need for ethical sophistication will gather momentum in the coming years as genetic technological breakthroughs, industrial research and geoscience advances catapult us into a turbulent era where the traditional boundaries between humans and nature dissolve and taken-for-granted certainties fall away. Already our global ecosystem is severely stressed with half of all life on earth threatened with extinction as a result of the actions of humankind. The very survival of the planet depends on the decisions made in the next 20 years. Developing a heightened awareness of our interconnectedness and the ethical accountabilities this brings has never before been more necessary.

This book, then, is an attempt to define business ethics today - how we can bring to the surface the ethical dimensions of everyday life. We show how the three dimensions of ethics - personal, organisational and social - can be aligned to nurture a coherent and healthy personal identity while working co-operatively to build a better future for all. We look at the relationship between ethics and profit, between the personal and the professional and between the professional and wider social expectations. We explore evolving public expectations of accountability and how personal and corporate personalities are shaped and hewn by the changing winds of global change. And, we provide practical advice and information on how to make ethics work at each of these levels.

Finally, we believe that it is the individual inside the corporation that is emerging as the greatest influencer of ethical fitness - and we explore the symbols of this emerging phenomenon. We advance the theory that we are potentially seeing the emergence of a new ethical framework - one that is replacing the traditional priority given to notions of 'duty', 'property rights' and 'what's legal'. In its place, modern day ethics rests on notions of 'duty of care' to others, 'individual virtue', and visions of personal identity, character and concern for the sort of person we become and the societies we bring forth.

We hope to persuade the reader that ethics is not just about morality; it can become a challenging dimension of personal and corporate life that will lead to higher performance. As Spinoza once said, 'The unexamined life is not worth living.' It is only by examining the big issues in our lives, by stepping back from the process of human creation that we begin to see things in their true perspective. Whether we like it or not, organisations dominate - some say consume - our daily lives. For many they have become the only stable influence in life. It is better, then, to understand the dynamics of human existence inside this complex world than to live in frustration at the toll it takes on our emotional well-being. Better even still, is to harness its tremendous power for social gain. The Age of Organisations is upon us. It is time that we sought to realise its potential for each dimension of human capacity.