From Boardroom Saints to Corporate Sinners, the Ethics Balancing Act
In today’s world, businesses are not just about making money. They have a responsibility to their employees, customers, investors, and society as a whole. Good corporate governance and strong ethical values help businesses build trust, avoid scandals, and ensure long-term success. But what do these terms really mean, and why are they so important?
What is Corporate Governance?
Corporate governance is the system that guides how a business is run. It includes the rules, policies, and practices that help companies make good decisions, stay accountable, and protect their stakeholders. Think of it as the steering wheel of a car, it ensures the company moves in the right direction, even when faced with challenges.
A well-governed company is like a football team with a great coach. The coach (management) must ensure that players (employees) follow the rules, play fairly, and work together towards a common goal. If the coach allows players to cheat or make reckless moves, the team will eventually lose, and fans (stakeholders) will stop supporting them.
Key Principles of Good Corporate Governance
Accountability – Leaders must take responsibility for their decisions and actions.
Transparency – Businesses should share accurate and clear information with stakeholders.
Fairness – Treating all employees, investors, and customers with respect and equality.
Responsibility – Making decisions that are ethical and beneficial for the long term.
In South Africa, businesses follow the King IV Report on Corporate Governance, which promotes ethical leadership, sustainability, and good decision-making. The Companies Act also sets legal rules that businesses must follow to ensure fairness and accountability.
The Role of Ethics in Business
Business ethics is about doing the right thing, even when no one is watching. It involves honesty, fairness, and respect for people and the environment. Unethical behaviour may bring short-term profits, but it often leads to long-term damage.
Imagine you own a bakery. You realise that using cheaper ingredients will increase profits, but the quality of your bread will suffer. Customers may not notice immediately, but over time, they will taste the difference and lose trust in your brand. Ethical decisions may not always be the easiest, but they help build a strong and lasting reputation.
Common Ethical Issues in Business
Conflicts of Interest – A CEO hires a family member who is not qualified for the job.
Bribery and Corruption – A company pays a government official to win a contract.
Misleading Advertising – A brand claims its product is eco-friendly when it is not.
Unfair Labour Practices – Employees are overworked and underpaid.
When businesses ignore ethics, they face serious consequences. Think of the major corporate scandals like Enron, Steinhoff, and Volkswagen’s emissions fraud. These companies lost billions because they prioritised profits over honesty and good governance.
The Link Between Corporate Governance and Ethics
Good corporate governance is built on strong ethical foundations. Rules and policies mean nothing if leaders are not committed to doing what is right. A company can have the best governance structures, but if its executives are dishonest, it will eventually collapse.
Take the example of a well-run hospital. If the management ensures that doctors and nurses follow ethical practices—such as treating all patients equally and being honest about medical conditions, the hospital will gain a good reputation. But if the leadership allows shortcuts, like using expired medicines or overcharging patients, trust will be broken, and the hospital will fail.
Why This Matters for Every Business
Corporate governance and ethics are not just for big companies. Even small businesses and startups must follow ethical principles and good governance. A local shop that cheats customers with incorrect pricing or a family business that avoids paying taxes will eventually lose its credibility.
A great example of ethical leadership is Patagonia, a clothing brand that puts sustainability before profits. The company donates a large portion of its earnings to environmental causes and ensures fair wages for workers. Customers trust Patagonia because they see its commitment to ethics, proving that doing good can also be good for business.
Final Thoughts
A business without strong ethics and good governance is like a house built on sand—it may stand for a while, but eventually, it will collapse. Companies that prioritise transparency, accountability, and ethical decision-making create long-term value, avoid scandals, and gain the trust of stakeholders.
As consumers, employees, and investors, we should all demand higher ethical standards from businesses. The world doesn’t need more companies chasing short-term profits at the cost of integrity—it needs businesses that operate with honesty, fairness, and responsibility.
At the end of the day, success is not just about making money. It’s about making a difference while doing what’s right.
Join CIBA for our Corporate Governance and Ethics in Business CPD here.
Strengthen Your Governance Expertise & Ethical Decision-Making
🚀 Corporate Governance and Ethics in Business – A Live CPD Event
📅 Date: 17 March 2025
⏰ Time: 09:00 (2-hour session)
🎓 CPD Units: 3 (Ethics & Catalyst)
📍 Format: Live Event
Corporate governance and ethics are not just compliance checkboxes—they are the foundation of sustainable business success. Join us for an insightful, practical session on ethical leadership, governance best practices, and real-life case studies from corporate scandals to success stories.
🔍 What You’ll Gain:
✅ Practical insights from real-world governance challenges
✅ Tools for ethical decision-making in complex business environments
✅ A deeper understanding of stakeholder expectations and ethical leadership
✅ Key takeaways from the King IV Report on Corporate Governance
🎤 Presenter: Ané Church
A respected ethics educator at the University of the Free State, Ané brings expertise in auditing, governance, and professional integrity to guide you through this crucial topic.
👉 Secure Your Spot Now! Don’t miss this opportunity to strengthen your governance expertise.
