Deloitte SA Consulting Head Thiru Pillay outlined that ethics and principles should always come before profit when he addressed a group of 800 consulting employees last month.
This is in line with a move by many corporates, including banking group HSBC, to re-emphasise the importance of ethics and principles in the wake of wide-spread scandals that have been harmful to many companies’ reputations.
Thiru commented on how HSBC included ethics and principles as higher order Key Performance Indicators (KPIs) than financial performance and, where individuals were not acting according to the company’s ethics and principles, their financial performance was regarded as irrelevant, and even a dismissable offence, in their assessments.
The mining sector continues to be beset with charges that some firms do not act in an ethical way. Charges that have been levied against some mining firms, and those contravening global norms of ethical and principled behaviour, include:
The use of child labour
The promotion and support of corrupt regimes, warlords or rebel forces
The underpayment of workers
The use of unsafe or dangerous mining methods
The employment of corrupt practices in securing mineral tenure
The use of environmentally-damaging mining methods
Numerous local laws have been put in place by governments to prevent unethical, unprincipled and dangerous activities. The US’s Dodd Frank Act is notable in its influence on Securities Exchange Commission (SEC) registered companies, which are required to disclose payments to foreign governments, while the Publish What You Pay initiative tries to achieve the same aims on a voluntary basis.
In addition, the Extractive Industry Transparency Initiative (EITI) requires countries to have companies commit to report on their local revenue in their areas of operation.
However, while some may be influenced by these global initiatives, it has become apparent that companies are also feeling the need to introduce their own ethics-governing principles and to prioritise behaviour and values.