Ethics Reporting: What and Why

Ethics in public relations and communication management

Ethics is relevant to professionals in public relations and communication management in many facets of their client work. A particular area is that of ethics reports in organisations’ annual reports, where public relations professionals can make a meaningful contribution to the quality of ethics reporting.

Organisations generally have a number of reporting obligations, many of them in accordance with the law. Ethics was added to legal reporting requirements by the Companies Act (No. 71 of 2008): the Act mandates that all but small companies establish a social and ethics committee, which is required to monitor and report on ethics as part of its duties. This is also echoed in King III (2009 King Report on Corporate Governance in South Africa). Its focus on ethical leadership and the management of ethics includes the assessment, monitoring, reporting and disclosure of ethical performance.

As regards the effectiveness of reporting, the principles that apply to integrated reporting are equally applicable for ethics reporting, namely that reports should be comparable, consistent, verifiable, timely and understandable.

However, many organisations still adopt a minimalist approach that falls far short of meaningful disclosure. There is therefore an opportunity for public relations professionals to guide their clients beyond mere ‘compliance reporting’. There are three criteria that are pertinent to realise this:

1. Ethics reporting should be based on a quantitative assessment of the company’s ethics. This allows the results to be compared, for example, to assess if ethics objectives have been attained and if improvements have been realised, to surface differences (such as between branches) and to measure the success of initiatives undertaken to address ethical behaviour.
2. Since the credibility of the report rests on the credibility of the ethics assessment, it is vital that this is based on the perceptions and experiences of all (or at least the majority) of the organisation’s employees and management. It is not adequate to base this on the limited views of its directors and executives or even a random sample of employees.
3. The trustworthiness of the ethics report also relies on the employees providing honest feedback about ethics in the organisation. This warrants that the assessment tool used provides the highest assurance of confidentiality and anonymity (such as the Ethics Monitor, a web-based ethics survey).

In order to provide sound insight into the quality of the company’s ethics performance, an ethics report should reveal the company’s overall ethics rating and provide details about ethical behaviour, unethical behavior and ethical boundaries (which measures inclusiveness or exclusiveness relative to stakeholders and the triple bottom line). This should disclose, for example, how committed employees are to the company’s values; the extent to which leaders are seen to live those values; the factors that most effectively improve ethical conduct and those that most successfully reduce misconduct; the incidence of specific unethical behaviours; how valued employees feel; if the company’s values apply to external stakeholders; and the degree to which the organisation pursues a triple bottom line. Results such as these would also allow the organisation to report on its ethical risk profile and the actions taken to grow ethical strengths and remedy areas of concern.

The benefits of comprehensive ethics reporting are significant, not least that the assurance it offers external stakeholders can boost the organisation’s reputation. Achieving this warrants quality input from public relations professionals – rather than just avoiding the most vocal ethics reports being negative press reports.

By Cynthia Schoeman
Posted on PRISA Newsletter, April 2014