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Business Culture & Ethical Behaviour

14 Sep 2022 14:00 | Malta Institute of Accountants (Administrator)

Humanity is continuously faced with the dilemma of the correlation between behaving ethically and being successful. We seem to be living in a society where success depends on freedom to do as you like and ignoring ethical principles. We are living through a culture which promotes liberalism while shifting away from conformism. Yet many others are subject to stiff regulation with penalisation continuously hanging on their heads. Is this a two-speed society with different classes or will the ethical and conformist prevail in the long run?

Corporations pride themselves on their brand of culture. Companies build their own culture which plays an important part in business, employee retention, customer relations, shareholder relations, competition, and society at large.

The ethical stance of executive management and leaders of a corporation define the culture of a corporation. On the other hand, the culture influences the moral values practiced within the company. Presumably Corporate Culture and Ethical Behaviour are intertwined, and one shapes the other.

Corporate Culture is known to change over time. Many companies which started purely as a service to society and human needs have turned into profiteering behemoths dominating markets, minds, and economic well-being of consumers. Companies which humbly emerged from an invention have over years muscled out other entrants and killing choice in the process. Success of companies or individuals is known to have rendered companies and people insensitive to other people’s needs and changed the culture of their environment clearly creating a divide between providers or producers and consumers. An uncontrolled corporate culture which sidelines society is harmful and many such situations have led to the much wrongdoing prevailing over doing the right thing.

One also observes the phenomenon that in times of apparent affluence cultures and ethics may take the sidelines, while during a recession, when more and more people are suffering, societies resort to the comfort of ethical practice. One would therefore wonder whether ethical behaviour and corporate culture are cyclical concepts. Do these concepts change with phases or do phases depend on how these concepts are observed?

These issues are very pertinent to us accountants. Corporate culture should be one of the cardinal elements to consider as early as the onboarding stage. With regards to client continuation, evolving corporate culture of the client remains of significant importance.

Whether we are Practicing Accountants in Business or auditors the subject remains extremely relevant. In the former role we purport to influence the culture, while in the latter role it becomes a matter of risk management to our practice as well as somewhat exerting influence. As practitioners we may have less freedom to adopt the culture that we want because we are regulated and therefore subject to rules as prescribed for example in the Code of Ethics and other pronouncements.

The subject of ethical behaviour is not a matter of choice to anyone let alone to accountants in any activity that they engage in. It follows that whilst, in line with the argument above, ethical behaviour influences corporate culture, in the case of accountants in practice the culture in the firm is rather defined by regulation and not so much by the ethical stance of the partners or management of the firm albeit that the latter’s’ ethical standards determine the ease with which compliance is attained.

These aspects will be the addressed in detail during this three-hour session, putting forward considerations which are increasingly relevant in the corporate world of today.

If you are interested in learning more on this topic, there is a session to take place on 4th October 2022. Register here.


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