More focus needed on corporation ethical decision-making

by Liwen Tang

 

Nowadays, concerns about sustainability issues increase rapidly and the Governance Institute of Australia intend to measure that how the public think about the national corporation ethical decision-making process. Surprisingly, the final results reveal a neutral view held by Australians, with the trend that financial institutions and private sectors continue to release the guidelines of ethical decision-making, such as the ethical decision-making frameworks in practice, published on February 1^st, 2024.

 

There are multiple reasons why the public is indifference about the ethical decision-making in companies. The first one to be consider is the collision between stakeholders benefits and the ethical issues. The primary goal of many corporations is profit maximization, which sometimes conflicts with ethical considerations. In pursuit of financial gains, companies may prioritize short-term profits over long-term sustainability or ethical practices.

 

Moreover, profitable corporations are more capable in dealing with ethical and other sustainability-related issues since they have more resources and have less pressure on making profit. If we consider big companies such as Woodside Energy who has a complete system about ESG issues and their stakeholders concern more about their strategies on ethical decisions. Therefore, stakeholders consider more about the profitability and then they will care about the ethical decisions.

 

Other reasons could be lack of advertising on those ethical frameworks and unquantifiable results. If few people know the frameworks, there must also be few attentions. Meanwhile, the measurement of ethical decision-making is a long-term and unquantifiable process and short-term investors wouldn’t put energy on this issues.

 

Addressing these challenges requires a multifaceted approach. Companies need to not only adopt ethical frameworks but also undergo a cultural shift towards prioritizing ethical values. They should cultivate a culture of transparency, accountability, and stakeholder engagement to bridge the gap between ethical rhetoric and practice.