Running an ethical business is actually pretty simple. In fact, Frank C. Bucaro, author of Trust Me! Insights into Ethical Leadership and Taking the High Road: How to Succeed Ethically When Others Bend the Rules, boils it down to saying yes to just two questions:
Does the action meet company's objectives?
Is it the right thing for the customer?
And when you look at any number of performance indexes—customer loyalty, stock performance, employee retention, and more—ethical behavior turns out to be very good for the companies that embrace it.
It makes total sense that socially responsible investments do better. Consider these factors:
Clean-hands companies don't have to pay expensive lawsuit settlements around pollution, safety violations, or discrimination.
When customers fall in love with the way a company does business, they start recruiting other customers. They actually become that firm's unpaid sales force, and that leads to greater profits through reduced marketing expenditures. (We'll talk more about this later.)
Ethical and eco-friendly companies are much more likely to build a lasting business, and build it more easily.
When customers believe that you have their best interests at heart, they come back again and again.
Joint ventures are much easier to organize, because the other partners expect that they'll be treated ethically and respected for what they bring to the table.
The high value of ...