Introduction
The bottom line for any business enterprise is profit maximization at the lowest possible operating expenses and risks. In normal day-to-day business operations, the companies often interact and impact a variety of individuals collectively referred to as stakeholders. Sometimes the company’s interests as an entity may conflict with those of its stakeholders. In such a context, what is the moral and professional right thing for the company to do? Such a question introduces the concept of business ethics.
Business ethics are increasingly becoming a strategic pillar in business operations in a capitalist environment. Companies are going to great lengths to demonstrate that they operate with integrity. In this context, companies in the modern world have designed policies such as Treating Customers Fairly (TCF) and green initiative policies. Such policies are meant to demonstrate that the companies are morally and professionally doing the right thing with respect to customers and the environment respectively. Indeed in the modern business world, ‘conscious capitalism’ and ‘enlightened business’ are some of the buzz words used to denote business operations in an ethical environment.
Positive changes
There are several notable positive changes in the UAE in the context of business ethics. One of the notable positive changes includes the establishment and the strengthening of institutional frameworks in regard to business ethics, integrity, and corporate governance. Such institutional frameworks include the establishment of the Center for Responsible Business (CRB). The Dubai Chamber of Commerce and Integrity established the center in 2004. The CRB was established to promote and enhance corporate integrity and governance. In this context, the CRB is charged with creating publicity for Corporate Social Responsibility (CSR) activities and other best practices around business ethics.
The CRB has also partnered with local institutions of learning to formulate workshops and programs that sensitize business leaders on issues around business ethics. Such programs include the partnership of the future leader program. Such a program will instil business ethics among emerging business leaders.
Room for improvement
There is a generally high awareness of corporate governance and socially conscious citizenship concepts among various companies in the UAE. Most company executives do hold a consensus that CSR activities are generally a good thing to uphold. However, there is a great misfit between understanding the CSR concepts and the implementation of such initiatives.
The United Arab Emirates companies often don’t view CSR activities as strategic business initiatives. Most companies in UAE do view CSR activities as peripheral activities that don’t warrant CSR budgets and policies. The companies often don’t see the need for formal CSR policies and Monitoring & Evaluation (M&E) mechanisms for their activities. The UAE’s companies also practice CSR in its basic form that involves the issuance of handouts as opposed to long-term sustainable events. These are some of the aspects that create room for improvement in the context of business ethics development in the UAE.
The way forward
The way forward for businesses in UAE includes mental reorientation in relation to the perception of business ethics and corporate governance. Business executives need to be educated on the value of business ethics in relation to overall business profitability. This education can be instituted through workshops and practical case studies from the developed world. The concept of CSR activities through handouts meant to solve immediate needs to be replaced with more long-term initiatives.