What having integrity as a corporate value means

Joaquín Garralda. Professor. IE Business School

25 January 2017

In our corporate environment it is impossible to achieve objectives without participating and cooperating with others, and that is why it is vital to inspire trust. Integrity plays a key role in this process.

One of the key findings of a report drawn up by UK consulting firm Maitlan[1] about the values of leading UK companies in 2015 was that with the exception of 17 companies in the FT100, all listed their respective values on their homepages, and within these lists the word “integrity” was the value referred to most frequently in their communications (35% of companies included it), followed by “respect” (29%) and “innovation” (24%). “Integrity was also confirmed as the valued most used by companies in the finance sector, with 9 out of 17 companies (53%) making an explicit reference to it as one of their values.

In light of these figures, we can ask ourselves why integrity is cited so often as a key corporate value, and if this has any kind of impact on the behavior of employees and directors.

The definition of integrity supplied by the Spanish Royal Academy is not particularly inspiring, given that it describes it as “the quality of an integral part,” with a secondary meaning which is:

With integrity - referring to a person - upright, decent, irreproachable

Although most people, when asked the same question would give a similar answer, there are different shades of grey when we apply it in practice, given that some types of behavior can be considered as upright by some people but not by others. In order to define the concept in a little more detail, let’s use a generalized vision of a person with integrity that can be summarized by: a person who “says what they think,” and compare with another view such as “does not hide anything.” The difference between these two descriptions lies in the silent question: “Is it absolutely necessary to say what you think in all circumstances? People who believe that to be the case in order to for it to be said that they had integrity would probably be considered rude on some occasions, and would therefore lose the positive connotation of “integrity.”  So when should a person say what they think?”

Let’s apply these deliberations to a business environment.

Is acting with integrity a rational form of behavior on all occasions? If we consider rational the kind of behavior that seeks to maximize one’s own interests, we could also say that in theory it is not always rational to say exactly what you think, given that hiding an opinion or keep quiet a piece of information could work in favor of a person’s own interests. Bearing in mind that the market system is based on the rational behavior of the individual, we could deduce that if it is not rational, that type of behavior would not happen in business relations. Nevertheless, if we introduce the time factor when considering “in one’s own interest” and we consider it from a broader time perspective, the term “rational” could be closer in meaning to the term “reasonable.”  That is to say, that one’s own interests could include the need to cooperate without gaining any short-term advantage, but with a view to achieving some kind of benefit in the future. Hence integrity can be considered to be feasible behavior.

Now let’s apply these comments to a very usual situation in a business organization: when several people have to coordinate among themselves to achieve a company objective.

In this case a director could think twice in a board meeting when it came to revealing something he or she knows about which could affect a decision being taken but which would not necessarily be a good thing for him or her. If it was a decision that would have implications for the future, nobody could be sure how things could work out anyway, given that the result could hinge on another aspect that didn’t even enter into the discussion.  If integrity is a corporate value, someone who knows something that might affect the future of the organization should speak out. Is such a supposition too fanciful?

If integrity is a value within a corporate culture that influences the behavior of the people who work in the company in question, keeping quiet could be a risk that would be hard to calculate if the issue later proved to play a key role in bringing about a negative impact on bottom-line results. If it is quite obvious that it is due to something that the person who kept quiet should have known due to the nature of their position in the company, then the result should presumably be that the person responsible is named, shamed and fired. Whatever happens, the person’s professional reputation will have been affected, and in the medium term they will find themselves treated with caution when it comes to future collaborations by people who realized what happened.  Worse still, their personal brand image will be one of untrustworthiness, which will make future promotions less likely, while people who found out about it in an indirect fashion will also feel mistrustful about requests for help from said person, or their professional opinion.  

In short, in situations that are a shade of grey, values are not something that have a hard and fast effect, but they do condition personal relations with other people in the company who value integrity and have firm ideas about what is the right way to about things.

In a business landscape like the current situation, where it is simply not possible to achieve objectives without the participation and cooperation of other departments, being considered a person of integrity is a great advantage when it comes to achieving personal objectives, even if it sometimes involves the odd drawback when you do something that is against your short-term interests, because it builds trust with regard to your intentions when you make observations on a management board.

[1] Fuente: [1] Fuente: The values most valued by UK plc ; http://maitlan.assets.d3r.com/pdfs/original/599-20151001-maitland-values-report.pdf

 

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