The importance of retaining a positive reputation and trust among stakeholders is a key challenge for any successful company.
Ethical behaviour and corporate social responsibility can bring significant benefits to a business. They can attract customers to the firm’s products, thereby boosting sales and profits. They can inspire employees to want to stay with the business, thereby reducing labour turnover, increasing productivity and attracting the best job-seeking talent to want to work for the business. They can also attract investors and boost the company’s share price, thereby protecting shareholder value.
Conversely, unethical behaviour or a lack of corporate social responsibility may damage a firm’s reputation and make it less appealing to all stakeholders.
Ethics ultimately concerns an individual’s moral judgements about right and wrong. To ensure that integrity is woven into the very fabric of a company, every one of its employees must adhere to the same strong values. Employees must decide what they think is the right overall course of action, which may at times involve rejecting the path that may lead to the biggest short-term profit. Decisions taken within an organisation may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company.
Culture and values are almost always instilled at a young age, and therefore it is crucial to appreciate that we must teach our future business leaders the importance of acting with integrity by ensuring that as they emerge from colleges, schools and universities, our graduates have full knowledge of what accountability and transparency in business means in practice.
To do this, we need to further engage and inspire business students in understanding real-life application of integrity, ethics, responsibility, governance, transparency and accountability in a local, as well as a global, business context.
In many cases, this is already being done. For example, there are a number of faculties across the Arabian Gulf that use the Pearl Initiative’s GCC Good Practices Report as in-class teaching material, in areas such as ethics, compliance and reporting, since its content is regionally relevant.
Indeed, in compiling this report, we saw an opportunity to engage students by enabling them to learn from established corporate entities for their own educational purposes, and in turn give the companies they interact with insights into what business students care about.
As such, last year we launched a competition in Saudi Arabia open to all business students asking them to submit case studies of regional businesses on governance, transparency and accountability. The student case study competition was designed in line with our objectives to grow a knowledge base on regional responsible business practices and to enhance the capabilities of the next generation in corporate leadership. At the same time, these case studies are to be used as important teaching materials at business schools internationally to ensure we are providing greater global awareness of practices and activities of our regional businesses.
After three months of hard work from the thousands of participating student teams from 11 universities across the kingdom, the winners, a team of young women from Dar Al Hekma College in Jeddah University, were announced at an awards ceremony hosted by the King Khalid Foundation and in partnership with the labour ministry. This competition attracted a huge level of interest from students and companies in Saudi Arabia last year, and this year the programme will be rolled out to students in the UAE and Oman, with a view to having a GCC-wide student competition on case studies in best business practices by next year.
Programmes such as these have gone a long way towards enabling a much greater level of engagement between students and the business community. The youth of today care about the reputation of the organisation in which they have chosen to work, and therefore they seek businesses that have a strong set of values that closely match their own. I have seen first-hand the energy and enthusiasm from students towards accountable leadership, ethical business and environmental responsibility. And as a result, ethics are becoming as important in the recruitment of our job-seekers as salary or other benefits.
Companies should be founded on a platform of open communication, empowerment, integrity and respect. These values should remain at the forefront of the way they do business every day so that customers, partners and stakeholders around the world continue to value the products and services provided. The best businesses are now a force for good and bear an important responsibility to the communities they serve.
To create a truly sustainable economy here in the UAE and the wider GCC, we must ensure that our business leaders of tomorrow understand how vital integrity is to an organisation’s health and how they can play an important role in upholding these values for the wider benefit of our societies.
Badr Jafar is the chief executive of the Crescent Group and founder of the Pearl Initiative, a not-for-profit working across the Gulf region to influence better corporate governance
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