Every year, the Institute of Business Ethics or IBE asks the British public their opinion about business behavior. The latest survey shows that the public’s general opinion about ethical business behavior has improved.
Over half (52%) now say they consider that business behaves ethically, a slight recovery from the dramatic dive to 48% last year, but not yet back up to 2015 levels (59%).
Although this recovery is encouraging, it may be that business is positively benefiting from the scandals which have hit other sectors, such as American politics, Hollywood, Westminster and soccer. By contrast, business may be appearing more responsible in the eyes of the public. Although some of these scandals broke after the survey took place, the groundswell of public opinion had already begun.
This #metoo effect ties in with another annual survey — the Ipsos MORI Veracity index, which examines whether the public trust different professions to tell the truth. This year, business leaders are not among the 5 least trusted professions for once, with 36% trusting them to tell the truth (as opposed to 33% last year). In fact, trust in business leaders has improved by +11 percentage points since the survey began in 1983.
People seem happy enough with their own employers and the local businesses they interact with, but it is “faceless institutions,” and “big business” who are seen as the culprits. The IBE’s survey shows that corporate tax avoidance and executive pay remain the top public concerns. Evidently, business is still not doing enough to address these issues in the public’s eyes.
Tax avoidance has been one of the top two issues since it was first introduced in the survey in 2012, with 38% considering this an issue that needs to be addressed. Tax is a difficult and complex issue, but it isn’t going away and the Paradise and Panama Papers have thrown it even more into the spotlight. Companies need to do more to address public concern and communicate the circumstances behind the tax positions they decide to take.
Although there has been some movement on executive pay, such as giving shareholders a binding vote on proposed pay packages, it will still take time to move the dial. Naturally the public perception is that the changes are not quick enough, with 30% of the public thinking this still needs to be addressed (up from 28% last year). Publication of gender pay gaps will do little to improve public opinion until they start to see improvements.
“Employees being able to speak up about wrong doing” also enters the top 5. Although we are seeing a rise in the number of companies providing channels for employees to raise concerns, companies still need to listen to what they are saying. Interestingly, this issue scores lower for UK Graduates, who are known to be vocal around this agenda, and more willing to challenge on ethics matters. They demonstrate greater confidence in speaking up and therefore the perception may be that existing corporate speak up arrangements may be improving.
While the public may be seeing business in a more positive light, due, in part by the glare of negative publicity in other sectors, this may be short lived if business doesn’t start to openly address these fundamental issues which have been troubling the British public for too long.
Daniel Johnson, pictured above, is the Head of Project Services at the Institute of Business Ethics. He’s responsible for delivery of the IBE’s products; including: training, tools and links with education. He previously served as Business Conduct Manager at BAE Systems (on secondment from the IBE) and also spent some time as part of the Corporate Responsibility team at Pentland Brands, responsible for risk mapping Human Rights and Modern Slavery in the supply chain.