What is moral courage?

Chartered Accountants need to lead and champion the ICAS ethical values. However, in many situations, “doing the right thing” will not be easy and you will need “moral courage” to ensure the highest standards of behaviour are upheld. 

Since 1 November 2017, the need for CAs to have “courage to act morally” has been highlighted in the ICAS Code of Ethics.  

Following a consultation process, ICAS adopted “moral courage” as an “enabler”’ – a key characteristic required of a professional accountant. 

All of us need to resist influences or agendas that favour unethical acts, such as pressure to report better financial, or non-financial, results than the company has achieved. It may not be as easy when you are not in a senior role, with the powers to enact and influence direct change, but every CA has their part to play.  

All CAs could face pressure in their lives to cut corners or turn a blind eye to unethical or inappropriate behaviour, but there is a need to demonstrate moral courage to ensure the ethical principles of our profession are not compromised. 

Our Code is largely based on the International Ethics Standards Board for Accountants (IESBA) Code of Ethics. 

With effect from January 2022 (following an IESBA project to promote the role and mindset expected of professional accountants) material was added to the “Integrity” principle within the Code. This contains the substance of the concept of “moral courage”. 

This emphasises that integrity includes having the strength of character to act appropriately when faced with challenging circumstances. 

ICAS views this as reinforcing the message of moral courage. ICAS retained moral courage as an enabler and this works together with the IESBA enhancements to the fundamental principle of integrity. 

What is moral courage in practice? 

CAs have to comply with the five fundamental ethics principles in the ICAS Code of Ethics. We define moral courage in the Code as follows: 

“In order to ensure compliance with the fundamental principles, an underpinning qualitative characteristic required of the professional accountant is the ‘courage’ to act morally. ‘Courage’ for the professional accountant is the need to act in accordance with the fundamental principles, especially in situations where there is a risk of suffering adverse personal consequences.  

“There is a need for the professional accountant to confront ethical dilemmas with courage. When facing an ethical dilemma, the professional accountant needs to have the courage to acknowledge the dilemma, to make a reasoned judgement as to the ethical action required to resolve the dilemma, and then to act accordingly." 

Courage needs strength 

Let’s look at what moral courage is, and what it needs from an individual. Michael Woodford, the former CEO of Olympus, spoke on the issue at an ICAS event: “If you know something is wrong and you choose to do nothing, you become complicit. People think that rather than confront the issue, you can walk away, but that’s not the case if you are a senior officer of a corporation.” 

Bravery in the face of adversity 

Michael Woodford is known for his role in exposing £1bn of fraudulent activity at Olympus after taking over as CEO. Soon after taking up his position, Michael discovered the scandal after a friend emailed him an article about Olympus business deals detailed in a local magazine. 

It made several claims about the company, but no-one at Olympus was willing to talk about why the company had bought three “Mickey Mouse” companies and paid £687m in mergers and acquisitions advice. The huge sum of money was traced by forensic accountants to the Cayman Islands, where it disappeared. Further press claims insinuated the fraud had links to the Japanese mafia. 

In the face of extreme circumstances, it took a considerable amount of moral courage to even raise the issue with the Olympus bosses, never mind facing up the fact that it could have ties with the criminal underworld. The Olympus board summoned Michael to a meeting where he was instantly dismissed. He had blown the whistle on a huge fraud and lost his job because of it, but that did not deter him from taking vital evidence to the press and police. 

The more that you endeavour to breathe life into the individual values expected of a Chartered Accountant, the better the profession will be for it. 

In the end, the courts found in his favour and awarded him £10m in settlement fees. Since then, Michael has been awarded titles such as Businessperson of the Year and helped to kick-off corporate governance reform in Japan, a culture that, up until then, had remained somewhat secretive about salacious business activities. 

What would you do? 

Even if you are not a senior officer, how willing would you be to confront a tricky situation? If you see illegal accounting practices, who would you report these to, if at all? How willing are you to be tarred by the same brush as those committing less than savoury practices in your workplace? 

This is not to say that the task would not be difficult. It’s important to make small inroads towards ethical practices and become an influencer. It could be a case of refusing to adopt a practice that you know to be suspect, and showing to the rest of your colleagues that you will push forward with the principles of the profession. 

Moral courage could even be pointing out gender, sexuality or race issues that have become a common accepted practice within the workplace, and taking the stand to say this is not ethical behaviour.  

Your strength could be the start of something new and the abolition of outdated and potentially dangerous practices. 

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