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The Ethics Institute of South Africa says your company's board must stick to these two ethical responsibilities

by , 27 March 2014
Following the Public Protector's report into security upgrades done at President Jacob Zuma's Nkandla home, the issue of ethics in leadership has cropped up. In the Nkandla report, the Public Protector accused the President of unethical conduct. While the war of words goes on regarding the report, make sure the ethics of your company's board aren't in question. Here are the two ethical responsibilities of your company's boards...

Why are ethics important in a corporate environment?

Professor Deon Rossouw, the CEO of the Ethics Institute of South Africa (Ethics SA) says in a statement, that ethics has a key role to play in ensuring that corporate governance systems actually work.

'If ethics are hardwired into how the company operates, then it will naturally follow corporate governance best practices and the company will realise the benefits from that course.'

How does a company go about achieving this?

'Achieving this lofty goal starts with the board, and there are two ethical responsibilities that boards, collectively and individually, must discharge,' says Professor Rossouw.

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Your company's board must adhere to these two ethical responsibilities

#1: The individual board members have to accept that they have a set of broad ethical duties to the company over and above their specific board responsibilities. This begins with avoiding conflicts of interest and always acting in the best interests of the company.

'It's impossible to discharge your duties as a director if one doesn't behave ethically towards the company,' cautions Professor Rossouw.

#2: The second ethical responsibility is one to society. 'The board has to ensure that, at a minimum, the company has no negative impact on society and the environment and, if possible, a positive one.'

Professor Rossouw goes on to say that this responsibility is best discharged by investing in the future of the society through corporate social responsibility programmes.

He says these actions are born out of moral conviction, but also 'enlightened self-interest, businesses need to build relationships with fellow stakeholders in society and depend on society's health to be sustainable.'

Remember your company's board won't be able to carry out their duties properly if they don't have ethics. So make sure you enforce these two ethical responsibilities starting today.

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