The Only Way is Ethics

Ethics are the ultimate grey area for boards, with one person’s ethical behaviour potentially considered unethical by another. Given that companies are subject to intense scrutiny by the public, media and investors – all of whom expect companies to behave in an ethical manner – boards cannot afford to be lackadaisical in their approach to ethics.

Ethical decision making was, therefore, the subject of a Next Generation NED Network event at which Ben Hardy, Clinical Professor of Organisational Behaviour at London Business School led a discussion of several case studies which posed ethical dilemmas for Non-Executive Directors (NEDs).

Hosted by Eversheds, the event also saw Charles Mayo, General Counsel, Secure Trust Bank and Chair of the Next Generation NED Network consider if directors generally, not just NEDs, have a legal duty to act ethically. Given that all directors have a duty to act in good faith in the way they consider would be most likely to promote the success of the company, and that unethical conduct can itself be a breach of the duty to promote success, Charles made the case that effectively there is a legal duty for all directors to ethically.

In an overview of the dilemma facing directors, Ben outlined the fact that shifting paradigms around what does and doesn’t constitute ethical behaviour complicates matters for directors. He believes that there are three ways boards can improve their ethical decision making, however: through diversity, disagreement and decision. It is these 3Ds of board decision making that Ben outlines in an article for Forbes, which offers insight into the best ways for directors to make ethical decisions.