© Source: No Hiding Place, www.ethical-leadership.co.uk

This post has been contributed by Andrew Leigh writes at www.ethical-leadership.co.uk. If you’d like to be a contributor, please contact us.                                                         

HR and the New Ethical Agenda by @HRTMExec

“It’s  official,” screamed the UK newspaper headline in 2013. The sacked head of the British Broadcasting Corporation (BBC) was provocatively branded as having “killed off the HR profession once and for all.” [1]

The ex-HR director was accused of presiding over “corporate fraud and cronyism” with huge pay-offs to former executives. Wearing their best cynical hats, some journalists  wondered whether women “really want to work in HR anymore?” Others suggested she was “the ‘wicked witch’ who had changed the face of HR forever.”

Certainly the affair sent tremors through the HR community. For once HR was headlining and not staying discreetly under the radar. A timely white paper from www.ethical-leadership.co.uk suggested indeed a new role was emerging for HR in ethics and there was “No Hiding Place” for the professionals. [2]

Things have never been quite the same. Now the dust has settled, it’s at least possible to begin surveying the new landscape. While previously HR always had an “ethical stewardship role” this has exploded to create a range of responsibilities previously undreamed of by many HR directors.

What does this new landscape look like?  There are broadly six roles in which HR professionals need to develop ethical skills, know-how, and collaborative contacts:

© Source: No Hiding Place, www.ethical-leadership.co.uk

© Source: No Hiding Place, www.ethical-leadership.co.uk

These roles deal with strategic focus, guardian, expertise, reputations, performance, and business practice. Yet this is only one way of picturing the new agenda.  An equally valid approach concerns the role of assessing risk and reputation.

This increasingly-used alternative can be summed up as “ESG,” that is, concerned with Environmental, Social, and Governance issues.

Both approaches imply an extremely wide area of practical concerns such as: leadership, employee responsibility, remuneration, performance appraisal, privacy issues, race and disability, safety and health, employment issues, and restructuring, layoffs and mergers.

Crisis in Business Ethics

Meanwhile, across much of the developed world there is also something of a crisis in business ethics. From coffee shops to banking, from pharmaceuticals to newspapers, from car makers to supermarkets, dubious and illegal ethical behaviour has never had such a high profile.  No wonder confidence and trust in business is at an all time low.

For HR, the agenda has therefore changed forever. The critical question is whether the profession has any influence over corporate behaviour and ethics in particular, and if so how?

A decade ago, an HR professional would have been hard-pressed to find anyone particularly senior to meet with and discuss issues about ethics and compliance.

Five years later a 2009 study of 214 global companies found most (77%) ethics, compliance, and human resource professionals would “like to see a more collaborative approach between the two functions than their company is currently taking.”

Another study reported a sizeable number of HR professionals felt they were not “truly part of the ethics infrastructure in their organisations, yet they are often called upon to remedy or assist with the situations caused by ethics violations.” [3]

Today, within an organisation such as HSBC, for example, it’s reckoned as much as one in 10 staff has a specific compliance responsibility. In such an environment, an HR professional had better gain a close grasp of ethical issues or risk being entirely side-lined.

Of the many ethical areas that might test HR professionals to the limit, is the domain of risk and reputation.  HR professionals’ knowledge of legal and management issues, as well as routine interaction with employees, puts them in a strong position for pointing out risks which other executives may not realise. In particular, HR must help build safeguards into board and executive management processes.

Yet another crucial aspect of the agenda demanding renewed HR attention concerns corporate culture. This is widely regarded as a major cause of the failures in banks and other sectors  where bad behaviour has been exposed.  But as a past chief executive of the CIPD has put it: “We also need to acknowledge that where there is persistent unacceptable behaviour, it is legitimate for people to ask: “How did HR allow that to happen.”

That question still reverberates, yet perhaps not entirely in a negative way. By taking hold of the new agenda, HR has a tremendous opportunity to increase its influence within the organisation at all levels.

As the white paper pointed out, “this is territory where HR professionals can enjoy a sense of pride and inspiration. The ethical agenda is so clearly important to the health of their organisations, and through it, HR can also make a real difference to actual employees.”

Andrew Leigh writes at www.ethical-leadership.co.uk, is a Chartered Fellow of the  CIPD and author of over 20 books on leadership and management. He can be contacted on info@maynardleigh.co.uk

Sources:

1 L. Peacock, Daily Telegraph, 11 Sep 2013

2 No Hiding Place, HR and the New Ethical Agenda, www.ethical-leadership.co.uk, 2013

3 The Ethics Landscape in American Business, Ethics Resource Center (ERC) and Society for Human Resource Management (SHRM), 2008

© Andrew Leigh, 2014

 

Related posts:

Leave a Reply