Ethics and Your Business: How Do You Define Ethics?

So, what are ethics? According to the Oxford Dictionary, ethics is described as “moral principles that govern a person or group’s behavior.” This, however, is a little vague. We want to provide some structure in a business context to ethics and ethical behavior. Following are some of the subjects that can have ethical connotations for steel-related companies:

· Insider Trading

· Conflicts of Interest

· Misrepresentation of Products

· Fair Dealing

· Lack of Clear Description of Needs

· Protection of Company Assets

· Confidentiality

· Protection of Proprietary Information

· Invoicing and Payment Issues

We are quite certain, as you look around your office and reflect on your dealings with other organizations, that you could add many items to the list. However, what is considered ethical behavior can vary depending on each company’s culture.

Following is a wise quote from billionaire investor Warren Buffet: “I want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper – to be read by their spouses, children and friends – with the reporting done by an informed and critical reporter.”

Mr. Buffet’s simple advice is just a guideline, yet we believe this philosophical approach to ethical behavior is more effective than attempting to define each and every situation that could arise between a buyer and a seller.  

We make decisions every day regarding how fair and honest we are going to be with one another. It’s easy to forget that these choices can affect more than just you. Unethical decisions can have long-lasting implications on the reputation of the individual, as well as the company. Unethical decisions can do professional harm to employees, result in financial losses, and even destroy companies.

A few examples come immediately to mind:

· Contracts between a supplier and end-user – when is it ethical to void or adjust the terms of an existing contract?

· Billing methods – is it ethical to assume or make the decision to alter the preferred billing method of a company?

· Insider trading – is it ethical for those negotiating pricing contracts to trade stock in each other’s companies?

· Short paying of invoices – is it ethical to short pay invoices without the express approval of the counter party?

· Price negotiations – is it ethical to misrepresent either the prices your company is receiving from a competitor or prices being collected in the marketplace in order to influence the final price outcome?

Let us know what you think.

Editor’s note: Steel Market Update wants to do all it can to promote and support ethical business practices and social responsibility in the steel industry. For that reason, we have launched “Ethics and Your Business,” a new segment in our newsletter and on our website. Periodically, we will provide commentary and interviews with industry thought-leaders on the subject of ethics from various points of view–corporate, educational, governmental and others. We welcome your comments, as well; just send an email to Tim@SteelMarketUpdate.com. We hope you find it interesting and inspiring.