Identifying ethical dilemmas in the workplace (2024)

Ethical dilemmas surround everyday life. Whilst most people do not have to deal with big moral dilemmas day-to-day, they are still likely to face an ethical dilemma at some point in their career. In a 2018 survey in eight European countries, the Institute of Business Ethics found that nearly one in three employees has witnessed or been aware of misconduct at work, and 16% of respondents felt that they had been pressured to compromise their organisation’s ethical standards.

“Ethical” will vary from company to company and sector to sector, though there are common themes.

“An ethical business is one which lives, breathes, and conducts its business in straightforward, transparent, honest, and truthful manner,” said Melanie Kanaka, FCMA, CGMA, chair of CIMA’s Professional Standards Committee, a CIMA Council member, and board director of the Association of International Certified Professional Accountants.

If you find yourself facing an ethical dilemma, the best course of action may be unclear, and it can be hard to know how best to respond.

The following steps can help you to identify and begin to address an ethical challenge at work.

Trust your instincts

“Trust your instincts” is a useful motto when it comes to spotting ethical issues. A gut feeling that something is wrong is enough to warrant further consideration.

This does not mean you should immediately jump into action and report your concerns without further thought. When you feel something might be wrong, check your facts, and run through the steps below.

Check the law (but legal does not necessarily mean ethical)

A useful question to ask is: Is it within the law? If the action is illegal, this can make things simpler, as there is now a duty to act. There can be consequences for being aware of a legal issue and failing to report it.

Just because something is legal, however, does not mean it is ethical. Juliet Oliver, general counsel of the UK’s Solicitors Regulation Authority and a member of CIMA’s Professional Standards Committee, said that an ethical business is “one which is trying to do the right thing. It goes beyond a tick-box approach to compliance and doesn’t look for legal loopholes.”

Consider reputation

It is a good idea to examine the issue and potential chain of events and ask: How would this look published in the media?

This will help see the bigger picture beyond your personal moral beliefs and consider the possible ramifications of ignoring the issue.

For example, recent company failures in the UK have placed the spotlight on large firms which, it has been argued, should have spotted the issues earlier. The reputational damage of failing to spot or report issues early has been massive for the firms involved.

Check your company guidance

It might be that a situation or an action directly contravenes the company’s ethical standards.

Most organisations will have a code of ethics or conduct. You can also look through policies to see if anything can support your thoughts.

For example, a company is likely to have a policy on bullying that would back up a feeling that a manager gossiping about one of their direct reports is wrong.

Check your professional guidance

In some cases, someone else in the organisation might see something as OK, but you still feel uncomfortable. This could be because of a specific position you hold or knowledge you have.

CIMA members and students have to follow the CIMA Code of Ethics. This gives specific guidance around issues relevant to management accountants, such as on confidentiality or producing misleading reports.

Talk it through

Ethics isn’t always clear-cut. Sometimes the gut instinct might remain even when there is nothing in a code of ethics or the law that backs up this feeling of it being wrong.

Talking it through with other people can be helpful to get further perspectives on the situation. This could be with a colleague, manager, ethics ambassador, or someone external to the organisation. Often this input from another person can help make it clear to you what your next steps should be.

You should also consider external guidance, for example, from CIMA or a legal advice service.

Sometimes there simply isn’t a right answer, but being able to explain the rationale behind choosing a course of action will stand you in good stead if questioned on the decisions you made.

Resources:

Bryony Clear Hill is the associate manager–Ethics Awareness for CIMA and is based in the UK. To comment on this article or to suggest an idea for another article, contact Drew Adamek, an FM magazine senior editor, at Andrew.Adamek@aicpa-cima.com.

Identifying ethical dilemmas in the workplace (2024)
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