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Like finance and marketing, ethics has become an essential business function. But why? In this

blog, we shall explore the main reasons why business ethics is important for companies as well as

budding business professionals.

What Is Business Ethics?

By definition, business ethics refers to the standards for morally right and wrong conduct in

business. Law partially defines the conduct, but “legal” and “ethical” aren’t necessarily the same.

Business ethics enhances the law by outlining acceptable behaviors beyond government control.

Corporations establish business ethics to promote integrity among their employees and gain trust

from key stakeholders, such as investors and consumers. While corporate ethics programs have

become common, the quality varies. According to the 2018 Global Business Ethics Survey

(GBES), less than one in four U.S. workers think their company has a “well-implemented” ethics

program.

Business ethics is an essential skill.

Almost every company now has a business ethics program. In part, that’s because technology and

digital communication have made it easier to identify and publicize ethical missteps. To avoid the

negative implications, companies are devoting more resources to business ethics. In one survey of

accountants, for example, 55 percent said they believe the importance of business ethics will

continue to grow in the next three years. In addition to establishing formal programs, companies

are creating ethical workplaces by hiring the right talent. “High integrity and honesty” is the
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second-most important skill for business leaders, according to a recent survey. Today’s business

professionals must understand the link between business ethics and business success.

Business ethics drives employee behavior.

According to the 2018 Global Business Ethics survey, employees are more likely to apply ethical

reasoning when their company clearly demonstrates why business ethics is important. Ninety-nine

percent of U.S. employees who experience a strong ethics culture said they’re prepared to handle

ethical issues. Companies that advocate for business ethics motivate their employees to perform

their roles with integrity.

The first step in building this kind of ethical culture is to create an ethics program. According to the

U.S. Department of Commerce, a complete ethics program should touch on all of the business

functions. That includes operations, human resources, and marketing, to name a few. The global

research company Gartner advises companies to integrate their ethics program with business

operations.