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Defining Ethical Business Practices: What Business Owners Need to Know

Ethics – the principles that regulate our behaviour, that help ensure we (at least) try to do the right thing. The ethics we hold and value often have effects that reach well beyond our daily lives.

Businesses are no different when it comes to maintaining ethical practices. The ethics that govern your business also have a ripple effect, which is why it’s vital those principles benefit more than just the faces who frequent your boardroom.

If you’re a business owner, where do you start with ethical business practices? Perhaps you’ve started looking into ISO consulting services to ensure your company’s operational procedures align with internationally recognised standards. Perhaps you’ve considered introducing a code of ethics for new and existing employees to follow.

Well, to keep the ball rolling, here are some key things that all modern business owners need to know when it comes to introducing and maintaining ethical business practices.

Fairness And Transparency: It All Starts with Your Employees

No matter what your business does, no matter what industry it exists within, giving fair and transparent treatment to the people who work for you is a fundamental step toward success. Everything from promoting equal opportunity employment to maintaining transparent communication to offering fair benefits and compensation.

It’s one of the basic building blocks of human relationships: treat someone with respect, and they will return the favour. In the relationship between employer and employee, this usually leads to deeper engagement, increased productivity, and lasting loyalty.

As a business owner, establishing practices and policies that promote inclusion, diversity, and equity help create a workplace culture that lets employees thrive, and where all employees have equal opportunities to grow and advance. Providing fair benefits and compensation demonstrates that you value the contributions of everyone that works for you and with you.

Ethical Sourcing: Positive Supply Chain Management

If your business sells manufactured products, then the sourcing of your raw materials or products directly from suppliers must be ethical and sustainable. Ethical manufacturing will often count for little if your supply chain is found to lack the same approach.

This means, as a business owner, you need to be vigilant about a material’s origins and monitor the supply chain for evidence of unethical labour practices. By exercising ethical sourcing, you help prevent labour exploitation in the supply chain and foster sustainable business relationships. Being able to do so is something that resonates with customers, and if you can do this well and communicate it well, you’ll build customer trust over time.

Treat Your Business Relationships Like You Treat Your Employees

It’s critical that you approach all your business relationships, internally and externally, with honesty and transparency. Being truthful in your advertising and marketing, being fair with your pricing, and being respectful to your customers help create a positive public image for your company. This approach should extend to your relationship with suppliers and stockists. Honouring contracts, keeping promises, the lot.

Again, implementing practices like these usually result in good business. Customers love a company that does right by them, and does it consistently. With ethical business practices, you’re able to take advantage of word-of-mouth, which is often far more effective than traditional advertising and marketing channels.

Invest In ‘Greenifying’ your Processes

Where once it was (perhaps) possible to feign ignorance towards the value of environmental sustainability, it no longer is now. Thanks to significant research over the past few decades, we’ve all been made privy to lasting effects of our companies on the earth. Nowadays, green business practices are essential, and there’s no getting around it.

Sustainability is the key here. Increasing energy efficiency, reducing waste, embracing environmentally friendly product development, the list is long and detailed. The silver lining is that these steps often lead to reduced resource consumption and cost saving.

Like the other ethical business practices in this list, the payoff with customers is almost always positive. The more we learn about our effect on the environment, the more we appreciate and support businesses that share these values. If your business is onboard with greener practices, it’s only going to be a good thing in the long run, for everyone.

Embrace Social Responsibility

So, you’ve implemented practices to help your employees, your suppliers, and the environment. The next step is to give back to the community your business exists and operates within. Even if that community has little direct contact with your company, showing that you’re willing to integrate and get to know your neighbours is a hugely positive move.

Your business can achieve this through Corporate Social Responsibility (CSR) programs, philanthropic efforts, and community engagement. If your company demonstrates a commitment to social causes, it benefits the wider community but enhances your company’s goodwill and reputation.

Ultimately, your business has nothing to lose and everything to gain from putting strong and ethical practices in place. From your suppliers to your staff to your customers and finally, the environment, everyone and everything stands to win in some way as a direct result of your ethical developments, no matter how big or small that win is. And when you hop into bed at night, we guarantee you’ll do so with a warm, fuzzy feeling inside, all alongside being able to enjoy higher staff and customer retention rates and reducing your carbon footprint to boot. Talk about a win-win!

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