Posted 3rd January 2019
Our Chairman Ian Baxter takes a look at the corporate scandals which hit the headlines in 2018 and what businesses can learn from them.
At a time when Brexit uncertainty puts greater pressure on business owners, now is the ideal time for business leaders to review their corporate culture to avoid pitfalls and promote profitably during 2019.
2018 wasn’t short of corporate scandals. Hefty fines, criminal investigations, consumer backlash and job losses hit the business headlines with the impact of some major corporate scandals leaving shockwaves across several sectors.
Construction giant Carillion went into liquidation, costing taxpayers £148m, Patisserie Valerie’s shares were suspended as fraud investigations continue into accountancy irregularities and thousands are boycotting Facebook after millions of users had their personal data harvested by Cambridge Analytica without authorisation.
But who is responsible for these failings and how were they allowed to happen?
I believe it is ultimately those at the very top who are responsible. Poor corporate culture and a lack of strong leadership can breed toxic workplaces which pave the way for such scandals to take place.
Here are five New Year’s resolutions for business leaders:
1. Declare war on your ego
Congratulations on your success in becoming a business leader. But don’t let it go to your head. Ego and self-importance frequently get in the way of good decision making. As the leader, your job is to discern the best possible decision taking into account input from all sides. It’s not necessary for all the best ideas to come from you. The best leaders give away credit ‘over generously’ choosing to make those around them look good. Such a posture helps build up and empower your team, ensuring YOU benefit from broad based and sus-tainable support.
2. Tear down the walls
Many leaders describe their people as their biggest asset, although they don’t always treat them as such. I believe every business, big or small, should have an open and transparent culture where the communication gap between senior management and their team is kept to an absolute minimum. Leaders simply have to know what is going on, the problems and the opportunities. Swap your ivory tower for a ring side seat in the rough and tumble of your business, once you’ve done it, you will never want to turn back.
3. A fair day’s pay for a fair day’s work
It should be one of the first rules of capitalism that people are paid wages they can realistical-ly live on. Whilst I am all in favour of free markets and competitive packages for successful people, when it would take the average worker 160 years to earn what the average FTSE100 CEO earns in one, more consideration needs to be given to striking a fair and sensible bal-ance. Whilst leaders of successful businesses should ultimately be rewarded the most, they should look after themselves last, when all of their team have been fairly treated.
4. From zero to hero
In this age of zero hours contracts, there has been much debate about what actually consti-tutes self-employment. Although the flexibility of operating in a “gig economy” might suit some, many companies use it as an excuse not to give workers full-time employment con-tracts and access to basic workers’ rights. Where practicable, it’s much fairer to offer staff permanent work, or at least provide set minimum hours so workers know exactly when they’re supposed to come in. Zero hours contracts have their place but that should not open the door to abuse.
5. Inspire loyalty through flexibility
Modern life can be stressful. We all have our ups and downs, so recognising when staff are under pressure and need extra support is often much appreciated. Flexible, understanding employers who treat their staff as people, not just as a resource, are much more likely to in-spire loyalty. We’d all rather work for someone who cares about us and takes a genuine in-terest in our well-being. So, let your employees know that you do care and want the best for them.