Ethical Business in Action and the ROI on Integrity


Last month, we featured a blog post on the Conscious Consumer — a consumer who prefers businesses that contribute to the common good.

Perfect timing for our March mantra: Be ethical, professional, and considerate. But why? Why should a business be ethical, professional, and considerate? Is integrity just a nice quality, or does it actually pay off?

You Betcha! Integrity Does Have an ROI

Chris Hitch, a program director of executive development at UNC, argued in a recent study that ethical breaches are far more common in the workplace than you might suspect. For instance, a survey of 6,400 employees at various businesses concluded that 41% experienced misconduct on the job.

Hitch notes that lack of integrity has a number of qualitative side effects, including erosion of shareholder confidence, reputation damage, and decreased consumer support.

These all represent breaches of trust. And when we look at what lack of trust does to revenue growth, the quantitative findings are startling: Hitch reports that companies with high levels of trust are 2.5 times more likely to have better revenue growth than their less-than-trustworthy counterparts.

A similar study conducted by Fred Kiel, cofounder of KRW International Inc., took a different tack on the question of integrity in business. Rather than focusing on organizations as a whole, Kiel’s research looked at CEOs. Over a two-year period, 84 CEOs were ranked by their employees on four qualities: integrity, responsibility, forgiveness, and compassion. At the end of the study period, CEOs who scored high in these areas boasted an average 9.35% return on assets (ROA); the lower-scoring CEOs, on the other hand, averaged an ROA of just 1.93%.

Clearly, ethical business is more than just good business. It’s profitable, too.

Ethical Business, The U+W Way

When Gina and Cristol started Union+Webster, they knew that a strong business should be founded on the principle of being ethical, professional, and considerate.

“It’s actually simple,” says Gina. “When I work with people who demonstrate honesty, integrity, and professionalism, I want to keep working with them. They are trustworthy — there is a sense of reliability. In creating our own company culture, we just reversed this. When we put being ethical, professional, and considerate first, our clients continue to bring us work.”

When asked what CEOs and executives can do to nurture ethical workplaces, Gina and Cristol both affirm that it starts at the top.

“Leaders have to lead the way — in this case, that job falls to us,” says Cristol. “Culture begins with the people who lead, and then trickles down until everyone supports everyone else in living the values of the culture. And if you are a leader, your people depend on you practicing these values. They are crucial for good business!”

“Yeah, that — and it just makes work life more pleasant,” adds Gina.


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