Member Article

Milton Keynes accountants combat pressure to act unethically

Local management accountants met in Milton Keynes this week at the National Badminton Centre, with the aim of stamping out unethical business practices. Although four out of five businesses worldwide have committed to ethical performance, the pressure to act unethically has increased, according to the ‘Managing Responsible Business’ report*, a global survey of almost 2,000 Chartered Global Management Accountants (CGMA).

At the event, hosted by the Chartered Institute of Management Accountants (CIMA), which published the research with the American Institute of CPAs (AICPA), attendees heard about the findings of the report, which was published last year, from Tanya Barman, CIMA’s Head of Ethics. They also had a discussion about the issues of ethical management and culture – an area that is increasingly recognised as having an impact on long-term business success.

Sue Stapleford, BSc FCMA CGMA, CIMA Area Chair said, “Management Accountants in Milton Keynes know so much of their organisation’s activities that they can champion the difficult balance between ethical transparency and business confidence. They are in an excellent position to be part of the ethical conscience of their organisation.”

Managing Responsible Business found that in nearly 80 countries bribery was identified one of the top ethical issues for their organisation and a fifth (20 per cent) of respondents also felt under more pressure to compromise their personal or professional standards of ethical conduct in time of economic slowdown. 86 per cent of respondents felt upholding their own professional code of ethics was the main way they contributed to management of ethical performance.

The vast majority (80 per cent) of organisations were found to provide a code of ethics to guide employees about ethical standards in their work, up from 72 per cent in 2008. However, only 36 per cent collect ethics information, such as the number of employees attending ethics training and actions taken on hotline reports. Since ethical performance can only be managed with the right information, the report’s findings suggest ethical practice falls short of stated policy.

According to the survey, neither senior management nor boards of directors seem to be reviewing, analyzing and monitoring ethics information at the level recorded four years ago. In 2008, 86 per cent of senior management and 68 per cent of boards reviewed ethics data, according to the report. In 2012, it was just over three quarters (78 per cent) and just over half (56 per cent), respectively. This “weakened tone from the top” comes as more than a third of those surveyed (35 per cent) said they sometimes or always feel pressured to compromise their organization’s standards of ethical conduct. This compares to just over a quarter (28 per cent) of respondents in 2008. The pressure is most pronounced in developing economies such as Malaysia, 54 per cent, and India, 51 per cent, and lowest in the U.K. and U.S., where 18 per cent of those surveyed feel pressure.

The report is a follow up to one conducted by CIMA in 2008. Geography and company size are key factors in the findings, with larger companies from more developed economies generally having more advanced ethics programs.

Other key findings from the report include:

Ethical Performance: More than half of companies (57 per cent) now provide training on ethical standards, 49 per cent provide a hotline for reporting conduct that violates the organization’s standards of ethics and 25 per cent provide incentives for staff to uphold the organization’s standards of ethical conduct, according to the report.
CGMAs and Ethical Performance: The main ways CGMAs say they contribute to management of ethical performance are by upholding their professional code of ethics, 86 per cent; ensuring the integrity of management information, 83 per cent; leading by example, 80 per cent.

Pressures to Act Unethically: Asked how likely various situations were to result in pressure to compromise standards of ethical business conduct, those surveyed identified the top situations as: working with colleagues from different functional areas within the organization; meeting reporting deadlines; compiling management accounts; and dealing with customers.

Business Issues: When asked how relevant various ethical issues were to their organizations, the top issues cited by respondents were security of information , 91 per cent, safety and security, 88 per cent, bribery, 78 per cent, discrimination, 75 per cent, conflicts of interest, 74 per cent, environmental, 73 per cent and supply chain, 72 per cent.

This was posted in Bdaily's Members' News section by CIMA UK Regional News .

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