1. Philippa Foster Back CBE, Director Institute of Business Ethics
...doing business ethically...
...makes for better business
Standards in the Boardroom What is the NED’s role in establishing Culture iNED November 2016
Philippa Foster Back CBE, Director
Institute of Business Ethics
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2. Sir Anthony Salz on culture
“Culture exists regardless. If left to its own devices, it shapes itself, with the inherent risk that behaviours will not be those desired. Employees will work out for themselves what is valued by leaders to whom they report.”
The Salz Review of Barclays Business Practice
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3. Culture: some questions to ask
Our Culture:
Have we a common understanding about the way this organisation works? Do we know the dilemmas our staff face day to day?
What are the norms of how do we do our work?
Do our values drive us? Individually and collectively?
What is our leadership style?
What example do we set?
Do we believe individuals challenge the norm?
HOW DO WE KNOW?
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4. IBE Ethics at Work British Survey 2015
What was the level of awareness of misconduct?
20%
What proportion of employees did not raise their concerns about misconduct?
45%
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5. Reasons why concerns were not raised
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Source: IBE Ethics at Work 2015 British survey

6. Edelman 2016
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7. IBE contribution to the discussion.....

8. Creating an Open Culture
A practical solution
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9. Building a trusted organisation
Values
Behaviours
Ethics & Culture
Conduct
Trust
& Reputation
Operational performance
Application of ethical values to behaviour
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10. Values in organisations
All organisations operate on the basis of core values – implicit or explicit.
The best include business values and ethical values.
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11. Values in organisations
Customer focus
Business values
Forward thinking
Ethical values
Customer focus
Respect
Courage
Trust
Quality
Responsibility
Honesty
Efficiency
Openness
Transparency
Teamwork
Fairness
Integrity
Reliability
Innovation
Performance
Profitability
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12. Values and the Organisation Model: How do values have an impact?
Core ethical values
Basis of a Sustainable Organisation Model
Influences conduct & decision making
Reinforces a culture of trust & integrity
Expressed in an Ethics Policy and Code
&
The way we do things around here, i.e. our culture
individuals
Supported by an effective ethics programme
company/organisation
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13. © IBE

14. Testing whether it is working...
Ethical Assurance and staff surveys
To assess aspects of ethical culture,
such as:
Values
Internal policies
External relationships
Awareness
Experience
Sensitivity
Confidence
PDRs
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15. Employee satisfaction with the outcome of speaking up
Source: IBE Ethics at Work 2015 British survey

16. Monitoring non-retaliation
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Source IBE 2015 Listed European companies survey

17. What elements in a corporate culture lead to ethical lapses?
Lack of ethical leadership and example at the top
Bad behaviour unchecked
Paying lip service to positive ethical values (valuing performance at any price)
Favouritism
Fear of failure (targets, speaking up etc.)
Fear of raising concerns
Lack of accountability
Lack of support mechanisms such as speak-up lines
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18. Summary
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19. Operational Performance
Business Ethics
Values
Ethics Behaviours &
Culture
Conduct
Trust
& Reputation
Opportunity
Financial
&
Operational Performance
Risk
© IBE doing business ethically makes for better business….

20. Business Ethics matters...
Embedding purpose, values , ethics and culture....
Right thing to do
Sets tone and culture
Supports staff
Good place to work
Retain and recruit best quality staff
Gain and retain trust from your stakeholders and the public
Gain reputation
Self insurance, mitigate reputation risk
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21. Thank you
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22. About the IBE www.ibe.org.uk
The IBE was established in 1986 to encourage high standards of business behaviour based on ethical values.
Advice
Publications
Training
Forums
Research
Education
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