Ethical Performance
inside intelligence for responsible business


Pay was 2009’s major lapse

April 2010

Executive pay and the treatment of staff were among the UK’s most common ‘ethical lapses’ in 2009 – and the finance sector was the most prone to problems.

Research by the Institute of Business Ethics (IBE) shows executive remuneration, expenses fiddling and bonuses were the main public bugbears last year, particularly in companies that have declared substantial redundancies or received taxpayer support or both.

IBE therefore named banks as receiving by far the worst coverage, accounting for a fifth of the total. Drawing on IBE’s weekly media monitoring analysis, which summarises relevant items in the UK quality news media and includes incidences where legal action resulted, the research placed the extractive industry as the second most reported on, particularly over human rights abuses in the third world and on executive pay.

The most improved sector was pharmaceuticals, which received less attention for unethical practice than companies in the telecommunications, energy, manufacturing and supermarket sectors.

The treatment of customers, unethical marketing and product safety are all among the most common ‘lapses’, behind executive pay and staff treatment. Tax has also become a visible problem for a number of companies.

The environment, which accounted for the largest amount of negative media coverage in the IBE’s last briefing in 2007, dropped to third.

The majority of media coverage was accounted for by FTSE100 companies, and all of those who appeared have a dedicated code of ethics. Large multinationals were also prominent.

Institute of Business Ethics | UK & NI Ireland | Business ethics

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