Bosses put profit before ethics, says survey

Britain’s bosses are prioritising profits over principles, according to a report that fuels the controversy sparked by Ed Miliband’s division of the business world into “producers” and “predators”.

Half of all workers believe their employer puts financial goals above ethical considerations, said the survey of 2,500 workers by the Institute of Leadership & Management and Management Today magazine.

It found that less than a third of chief executives of large companies were seen by their staff to put ethics at the heart of business decisions.

The findings come at a sensitive time for the corporate world after business groups lambasted the Labour leader for proposing tax and regulatory policies that would favour “good” companies over “bad ones”, which many complained was a false and impractical distinction.

George Osborne, the chancellor, described Mr Miliband’s policy on Monday as “frankly ridiculous”.

Perhaps surprisingly, the group that has seen the biggest improvement in ethical standards is banking and finance, where 46 per cent said the industry had changed for the better in the past three years.

But almost a fifth of public sector employees and one in 10 staff in private companies said their organisation operated less ethically than it did three years ago.

Least impressed were workers in national and local government where 21 per cent felt their employers’ activities had become less ethical since 2008, closely followed by the utilities, post and telecoms sector at 20 per cent.

Half of respondents said their employer put financial goals before principles, while 48 per cent and 44 per cent said the same respectively of their chief executive and line manager.

Only 30 per cent of chief executives of organisations with more than 1,000 employees were seen by their employees to put ethics at the centre of corporate decisions, while just 36 per cent believed them to have high ethical standards.

Peter Cheese, the institute’s chairman, said: “With the banking crisis, the phone-hacking scandal and the outcry over MPs’ expenses, the ethical behaviour of leaders and their organisations is under strong scrutiny.

“It is an increasingly critical issue that impacts brand image, trust and business performance. Employees, customers and shareholders expect ethical values to be at the heart of business decisions. The fact that so many leaders and organisations are perceived not to have that is a cause for serious concern and attention.”

He said it was heartening to see some employees report that their organisations had become more ethical in recent years, especially those within financial services, banking and insurance.

Public sector bosses remain the least trusted, scoring just 67 points out of a possible 100, compared with 72 points for bosses from both the private and voluntary sectors, suggesting that public sector leaders are failing to tackle effectively the problems their organisations are facing.

Overall trust in chief executives has increased, up four points to 66 from 2010 and up six points from 56 in 2009.