FTSE firms writing ‘ethical codes’ in droves – but few actually using them, report finds
More FTSE firms than ever before have codes of ethics in place but few are using them to guide day-to-day decision making, a new corporate non-profit report has warned.
Research by the Institute of Business Ethics (IBE) found 88 per cent of FTSE 100 companies have now adopted a code of ethics, City PM can exclusively reveal.
The IBE report found an increase of nearly 10 percentage points, from 81 per cent in 2021, in firms which have an ethical code in place.
But, of the 88 firms with a code, under a third (27 firms) provide guidance for daily decisions, the report found, prompting the IBE to warn staff need more help implementing ethical principles.
IBE director Dr Ian Peters said it was “disappointing” to see firms lacking key decision-making processes and urged companies to do more to “help staff to make ethical decisions”.
Dr Peters said ethics codes should be the “cornerstone” of firms, as it “supports a healthy culture and reassures customers the business will do the right thing for the right reasons”.
He said: “Within that code should be a process to support ethical decision-making, and it is disappointing to see so many businesses lacking this key tool.
“Our report shines a light on the increase in businesses with a code of ethics, but more must be done to provide decision-making tools to help staff to make ethical decisions.”
How do codes of ethics help firms?
Craig Beaumont, from the Federation of Small Businesses (FSB), urged big corporations to do more to support small firms, including by paying invoices promptly and sharing resources.
“Large corporations need formal codes and processes to make sure thousands of staff across multiple sites know how to operate to a high standard,” he said.
“It’s important this ethical agenda includes positive and ethical supplier management.
“This is the right ethical approach rather than simply sending risk down the supply chain to protect the corporate, which happens all too often.”
And Sarah Olney, Lib Dem treasury spokeswoman, said it should be a “no-brainer” for all firms to have an ethics code and urged the government to encourage private sector uptake.
“Operating within a strong code of ethics should benefit businesses of all shapes and sizes,” she said.
“These frameworks help create a positive working environment, foster sustainable growth and ensure both company and client get a fair deal.”