Bachelor of Commerce and Bachelor of Laws student Jonathan Zheng is a co-winner of the 2020 Natoli Student Ethics Competition.
23 September 2020
Businesses with strong ethical attitudes rewarded during COVID despite a period of increasing lack of trust and disconnect
Social barriers disrupting communication within organisations… significant corporate decisions
resulting in large scale redundancies witnessed at Qantas and the big four firms… the uncertainties
surrounding data protection policies… These elements have all plagued a wave of doubt amongst
people in the pandemic climate. Despite a great understanding of the financial pressure facing firms,
strong responses perceived as poor treatment of employees have casted a lasting negative image on
‘broken’ management, damaging reputations of many firms. EY’s recent survey concerning ethical
business conduct demonstrates an increasing disconnect between junior employees and senior
leadership, in which 55% of board members asserted their confidence in their management team,
contrasting to only 37% of junior staff sharing the same outlook. But do these indicators show that
business is broken?
Macquarie Group highlights a structural shift prevalent in the financial industry which has been
spurred by the pandemic. Investors and stakeholders have developed an expectation that businesses
prioritise ethical social responsibility such as employee health and safety and reasonable cost
management, over excess profits. Blackrock analysed that more than 90% of sustainable indices
have outperformed parent benchmarks during the period of heightened market volatility,
emphasising an investor appetite for companies with strong ESG backgrounds.
Internationally, a powerful example of external stakeholders showing support for businesses was
demonstrated during the outrage of Jimmy Lai’s arrest where Apple Daily’s stocks rose 1100%
where Hong Kong supporters of the newspaper attempted to express solidarity with the media tycoon, whilst circumventing pandemic restrictions. It portrays a message that stakeholders
appreciate firms that champion strong values and will reward those during periods of difficulty.
COVID-19 has to some degree exposed the true culture and faces of many corporations. Ultimately,
it reiterates a notion that businesses engaging in ethical practices will remain strong and be
rewarded in the long-run.
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