Asked what interest he took in the ethical constraints of his newspapers, Daily Express owner Richard Desmond snorted at the 2012 Leveson enquiry: “Well ethical, I don’t quite know what that means.” What he probably meant but didn’t quite say is: “ethics is for wimps!“

When the Arthur Andersen global consultancy collapsed in a matter of weeks for failing to act ethically, nobody suggested then it was for wimps. Since then businesses around the world businesses have been busily designing and implementing business ethics programmes. Possibly it makes them wimps, but the evidence suggests they are in fact making logical and sound business choices — they are after the ethical advantage.

The belief amongst some business leaders that ethics is hardly useful and for some is just for wimps remains all too prevalent. It is taking time for the “ethical advantage” to penetrate the higher echelons of many businesses. Yet as City editor of the London Evening Standard James Ashton explains: “Maybe it’s the banks' tarnished images, BP's life after the Gulf of Mexico spill, G4S' Olympic high jumps, tax avoiding Amazon, or rip off gas companies, but corporations seem more concerned than ever at getting it right in the eyes of shareholders, customers and governments. (1)

The ethical advantage consists of both pull and push factors. The pull factors are all the tangible attractions: why acting as a responsible business pays handsomely, and why it’s an entirely sensible and logical business strategy. Based on well-documented research these include:

• Enhanced reputation and good will

• Reduced risks and costs

• Protection of employees and agents

• Stronger competitive positions

• Expanded access to capital, credit and foreign investment

• Increased profits

• Sustained long term growth

• International respect

• Improved recruitment: lower retention costs


Of the many pull factors, perhaps the most immediately compelling is companies aiming to act responsibly in their business performance tend to do better financially than ones that don’t.

Quite simply, responsible companies tend to be more profitable, certainly in the longer term. For example, figures from the World’s Most Ethical Companies show dramatically how in the S&P top 500 companies the most responsible companies out-perform those regarded as less responsible.