#EthicsMatter - Ethics as the cornerstone of the Global PR & Communication Model
There is a direct relationship between ethics, reputation, and trust, and between these concepts and business excellence. In recent years, we have seen how ethics has emerged as a key factor in generating trust & reputation, accounting for more than 75% of reputational and trust capital, according to the Edelman Trust Barometer's annual results. According to the data collected, companies are considered ethical and competent, surpassing governments in terms of competition and approaching near NGOs in terms of ethics. Therefore, we observe how ethics is a key element to promote the leadership role of companies, which for the first time in decades business organisations emerge as the institution that inspire the highest trust (61% of respondents), followed by NGOs (57%), governments (53%) and the media (51%).
Ethics as a key driver to generate Trust & Reputation
Source: Edelman Trust Barometer, 2021
The word "ethics" comes from the Greek word ethos, and it means character or corporate purpose. Ethics has come to life in the day-to-day activities of organizations thanks to purpose, corporate values, and principles of the organisation. It is an abstract concept that is implemented by defining and activating corporate purpose, and it is the first building block of the 2021 Global PR & Communication Model developed by Global Alliance in partnership with Corporate Excellence – Centre for Reputation Leadership.
Ethics, which is known as a basic component of corporate purpose, should be understood as a fundamental pillar of strategy and a framework for guiding the decision-making process and aligning employee´s attitudes and behaviours that guarantees consistency, coherence, and integrity. We make decisions based on our purpose and values, and those decisions develop positive or negative actions and initiatives. Thus, an organisation’s main role is defining its purpose and promoting business excellence through its decisions and actions. Defining our ethos is the most important challenge businesses face today. This is the reason why purpose is the Building Block 1 of The 2021 Global PR & Communication Model and how ethics should be understood as the Model's core.
According to PR & Communications professionals, promoting ethical practices, strengthening reputation, and generating trust and social legitimacy are of the key priorities for the future of organisations.
Ethics, Trust, and Reputation as top priorities for PR & Communication professionals
Source: Global Alliance & Corporate Excellence (2021). The Global PR & Communication Model.
There is a significant consensus (97,4%) about the importance of corporate purpose as defining an organisation’s identity (DNA) and reason for being –what makes it unique– and it is expressed through beliefs and values. One of the main findings of The Global PR & Communication Model is related to the significant impact of purpose on all building blocks of the Model –corporate brand and culture, reputation, and communication–. We discovered that when purpose is defined, activated and implemented, better performance is achieved in the impact of all intangible assets both in terms of efficiency and effectiveness.
Purpose and Ethics as a powerful tool for managing all the Building Blocks of the Global PR & Communication Model
Source: Global Alliance & Corporate Excellence (2021). The Global PR & Communication Model.
Purpose and culture determine how an organisation behaves, and the way it behaves expresses how it thinks. Hence, the need to promote a culture of ethics within the organisation establishes the reference framework that guides all employees' attitudes, decisions and behaviours. To achieve corporate excellence, a company must succeed in developing its purpose and values. This is the only way to create integrity, aligned behaviours, cohesion, and a sense of unity. It is not that employees need to know the purpose, principles, and values of the organisation, but they need to believe and share them. Thus, the importance of involving them in the process of defining and building the corporate purpose and values.
In this sense, and according to The 2021 Global PR & Communication Model the method selected for defining the corporate purpose plays an important role in the effective management of corporate brand and culture, reputation, and communication. When the method incorporates a 360-degree participatory process that considers the expectations and demands of all stakeholders, the impact on performance of intangibles is much greater than when traditional top-down approach is adopted. This means that we have to define and active purpose with our stakeholders and not for them.
However, it should be noted that the development of purpose has an internal and an external aspect. Internal refers to the connection between the organisation's purpose and the personal purpose of its members. For its part, the outer aspect of the purpose relates to the organisation's purpose with its external groups. Creating a purpose that connects with the organisation's internal and external elements requires a holistic perspective that integrates what is outside and what is inside.
Embracing a culture of ethics requires knowing very well what is morally acceptable in society. The PR & Communication professionals' role is decisive as the connecting leader between the company and its stakeholders´ values and moral attitudes. It is a key function capable of identifying society's dynamic ethical requirements thanks to the continuous monitoring and social listening of the expectations, values and moral requirements of the different stakeholders. This is why the fifth Building Block of the Global PR & Communication Model refers to creating an intelligence system that provides powerful contextual intelligence capabilities to the PR and Communications role and to the whole organisation. The establishment of a solid and sophisticated performance measurement system for non-financial metrics and the analysis of present and future social trends is crucial for the early identification and anticipation of relevant trends that concern stakeholders and will become ethical requirements, the continuous tracking of changing social expectations, and the inclusion of value insights for intelligent, and informed decision-making models.
Incorporating ethics into the heart of business activities requires the adoption of new policies for management remuneration that reward internal alignment with purpose, culture and values of the organisation.
Business ethics is key for PR & Communications professionals on a daily basis, as we can see in the chart below: honesty/truth based communication, ethical codes, transparency, and internal training in these matters are essential for strengthening the integrity and ethical commitment of the profession as well as the organisation’s systems of governance, compliance, and decision-making.
Most important ethical behaviours according to PR & Communication Professionals: Translating Business Ethics into practice
Source: Global Alliance & Corporate Excellence (2021). The Global PR & Communication Model.
According to experts of PR & Communication, corporate purpose and ethics play a relevant role in mitigating reputational risks. It’s because purpose and ethics serves as a filter or frame of reference that guides the decisions, actions and behaviours of employees, and the organisation as a whole in the face of ethical and moral dilemmas and strategic decision-making processes.
Hence, we can demonstrate that business ethics, through the activation of a strong sense of purpose values and of the organisation, is seen not only as a tool for generating value but also as a tool for value protection, by identifying and mitigating reputational risks.
Purpose and Ethics mitigate reputational risks
Source: Global Alliance & Corporate Excellence (2021). The Global PR & Communication Model.
While a lot of companies have developed new standards and self-regulation initiatives to ensure differentiation and improve reputation among stakeholders, this is not yet a general policy among companies. Not taking firm ethical perspectives into the business model with concrete policies is not only a wasted opportunity in differentiation, but a high reputational risk in the short term: according to experts, behaviours that start as self-regulated policies in companies, end up setting the baseline for regulators to adjust legislative framework.
Therefore, companies that are not ethically strong on their own will have to catch up fast to meet the regulation, which is barely the baseline of what stakeholders expect from companies. As a result, the possibility of obtaining differentiation through cutting-edge ethical behaviour is equal to zero.
Ethics was very relevant in the Melbourne Mandate, also in the Global Capabilities Framework. The Global PR & Communication Model builds on this heritage and strengthens it´s fundamental role.
The Global PR & Communication Model understands ethics as a management and leadership mindset that must be present in organisations' day-to-day business, as key component of their culture and values guiding behaviours. Being a fair, committed and responsible company is no longer an option but a sine qua non to operate in the 21st century marketplace. Citizens demand organisations that use their leadership to transform the world and only those who understand that the aim is to be profitable, serving the interests of stakeholders, generating ethical, economic, social, and building economic environmental long-term value.
About The role of Ethics in the Global PR & Comms Model
Webinar link: https://www.youtube.com/watch?v=8qiBBX2xwPI&feature=youtu.be
About The role of Ethics in the Global PR & Comms Model
A new roadmap developed for Public Relations and Communication Management and Corporate Excellence – Centre for Reputation Leadership to guide the job of PR and Communication professionals all over the world.
The Model is structured around five strategic Building Blocks that generate and protect value in today’s world: corporate purpose, brand and corporate culture, reputation and reputational risks, communications and connected intelligence and intangible asset metrics. These Building Blocks enable organisations to achieve long-lasting differentiation, trust and social legitimacy to maintain their license to operate and as a consequence generate advocacy at large scale and engagement with key stakeholders (social and relational intangible capital1).
With the collaborative and participatory efforts of a network of 1,400 professionals from 47 countries on five different regions, this has been a global consensus-based research on the present and future of the role and value of public relations and communications management.
The full report and executive summary of the Global PR and Communication Model can be found here: www.prcomssmodel.com
Source: Global Alliance & Corporate Excellence (2021). The Global PR & Communication Model.
1 Integrated Reporting Initiative: 6 capitals. 4 of them are intangible and are the ones which are growing in value on a permanent basis.
Ángel Alloza, CEO Corporate Excellence – Centre for Reputation Leadership
Clara Fontán, Director of Intelligence & Knowledge Corporate Excellence – Centre for Reputation Leadership
Any thoughts or opinions expressed are that of the author and not of Global Alliance.