Moral courage must be at heart of business – report
Senior accountancy professionals believe boardrooms must drive ethical culture, according to a report from Chartered Accountants Worldwide.
Businesses must embrace a culture of moral courage and this should have its roots in the boardroom, according to the latest report from Chartered Accountants Worldwide (CAW).
The international body's report - Critical Success Factors for Tomorrow's Business Leaders - said that businesses must be aware of the links between the 24-hour scrutiny now possible in the digital age through social media, and value creation.
The report follows an international summit held in London where senior CEOs, CFOs and executives, together with the heads of global Chartered Accountancy bodies, gathered to discuss key issues facing future finance professionals.
The report also covered issues ranging from geopolitical tensions to tax avoidance, and drew on research surveying chartered accountants leading UK businesses.
Ethics emerged as one of the main factors that will shape the future of business. The report found that the moral values of organisations were becoming more important to millennials, who want to do business with brands they trust.
Pat Costello, Chairman of CAW, said: "The digital age means that everyone is under scrutiny, all of the time, and issues can escalate through social media like wildfire. The right decisions need to be taken in real time - it's no longer enough to rely on the traditional hierarchies.
"This means we need to foster a culture where people are trained to know what the right thing to do is when a challenge presents itself. A culture of ethics certainly starts in the boardroom, but it can't stop there."
ICAS CEO, Anton Colella, said: "Business Leaders cannot just manage what is in front of them; they need to be able to see through the complexity to what will be important in the future as well.
"This means understanding the strategic implications of global issues, whether that is the recent fall in oil prices, conflict in the Middle East, or what is trending on Twitter. Chartered accountants are trained to be strategic business leaders, which is why they are well-placed to see the knock-on effects that social change can have on the bottom line.
"It takes a lot of courage to drive change, but it is the only way to stay ahead."
The report also noted that tax has become a reputational issue, with aggressive tax avoidance having the potential to do real reputational harm. While there were concerns surrounding the difference between legitimate tax planning and aggressive avoidance, the report said "a new kind of economics - reputational economics - is now part of boardroom agendas. And it is here to stay".