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How to be a business owner of good standing

Article written by Jannie Rossouw, Head: Sanlam Business Market

The world and South Africa are plagued by scandals of corruption and alleged wrongdoing in politics and business alike. We all have a recollection of the ENRON scandal in the nineties and, more recently and closer to home, the Gupta saga and the overnight challenges faced by Steinhoff. The latter two examples have not even being put to trial, but the collateral damage is done by tainted reputations and a share price demise.

These examples are known because they are exposed in the public domain. There are also many SME businesses and their owners who face the same wrath of the consumers and markets in which they operate that we never hear about.

The reality is that one wrongdoing can ruin it all.

What is ethical behaviour?

This is acting in ways consistent with what society and individuals typically think are good values.

Ethical behaviour tends to be good for business and involves demonstrating respect for key moral principles that include:

  • Honesty – to speak and live according to the truth.
  • Fairness – to treat all people reasonably and justly.
  • Equality – to show no prejudice when dealing with people; for example, no stereotyping.
  • Dignity – to treat people the same way you we would like to be treated – with respect.
  • Diversity – to embrace the diversity of and in people.
  • Individual rights – to acknowledge that every person has constitutional rights and that a business act, product, service or decision should not infringe on that.
  • Trustworthiness – let your “yes” be your “yes”.
  • Excellence – to excel and always try to add more value than what is expected.
  • Loyalty – to be faithful to your business partners/associates/employees and clients.
  • Law abiding – to operate according to and within the parameters of the applicable rules, guideline and laws.

Source: Adjusted from Businessdirectory.com

The reality is that “ethical behaviour is doing what is morally right – when nobody is looking”.

Ethics applied in business

Firstly, it is important to understand that personal ethics and business ethics are one and the same thing. Unethical behaviour of an individual will surely lead into unethical business outcomes.

Here are some of the benefits if ethical behaviour is part of the people and business fabric:

  • Good reputation
  • Clear conscience
  • Retaining good employees
  • Positive work environment
  • Avoidance of legal challenges
  • Competitive edge
  • A moral compass in difficult times

Ethical practices come to the front in things like:

  • Negotiations – are we looking for a win-win outcome where all parties benefit?
  • Taxes – do we comply with all the requirements of the taxman?
  • Invoicing – do we bill for actual expenses and a reasonable mark-up or do we charge some clients more than others?
  • Creditor payments – are we paying our creditors on time, or are we using them as a bank?
  • Government regulations – are we operating within the ambit of all local authority regulations?
  • Software piracy – do we have official licencing agreements in place to use proprietary software?
  • Staff – are we paying our staff a market-related salary for their services and do we have formal employment contracts and job descriptions in place, with associated written and agreed-upon key performance measures?
  • Business partners and associates – do we choose them to meet our ethical standards? If not, you might be setting yourself up for future challenges.

In his book, Ethics 101, John Maxwell (American author and leadership specialist) coins the “Golden Question” which I think is very relevant in applying ethics in our lives and business.

He asks, “How would I like to be treated in this situation?”

To support business owners with the important task of business planning, Sanlam gives you free access to the book Your Annual Business Game Plan for Success, which provides an easy and straight forward framework needed to draft a well-crafted game plan that will create the positive change and growth necessary for business success

Go to www.sanlamgameplan.co.za to download your free copy.

Sanlam is a proud Partner of the NSBC.