By Raef Lawson, Ph.D., CMA, CSCA, CPA, CFA
IMA Vice President of Research and Policy and Professor-in-Residence

October 21, 2020 marks the Carnegie Council’s seventh annual Global Ethics Day, a time for organizations to both educate on and recognize the role of ethics within their business and among employees. In continuing our commitment to maintaining the highest standards in ethical business practices, IMA recently surveyed its Committee on Ethics – a group dedicated to encouraging IMA members, their organizations, and other professionals to uphold these practices – to reflect on lessons learned from the ongoing coronavirus pandemic.

The survey delved into four topics relating to ethical business practices:

  • Lessons learned throughout the pandemic
  • Creating an ethical culture in a remote workforce
  • How businesses could see a rise in ethical issues due to performance pressure
  • The influence of IMA’s commitment to ethics

With ethics at the core of IMA’s mission, members discussed the value and impact of these standards throughout the accounting and finance functions over the course of the year.

Lessons Learned in the Pandemic

In times of uncertainty, accounting and finance professionals have been entrusted with the responsibility of steering their organizations along the path of financial viability. However, according to Dr. Babu Razack, CMA, ACMA, general manager, finance at Ali Alghanim & Sons in Kuwait, organizations must also provide a support system for employees. 

“Social responsibility is equally important as organizational profitability,” he shared. He also suggests keeping “reserves to support the families or individuals who lost their jobs.”

Despite a clear need for increased employee support, the Committee suggested that professionals should still be aligned with the same moral compass that would guide them in a normal setting. Dave Eichelberger, CPA, longtime accounting professor and formerly Lecturer at the University of Virginia's McIntire School of Commerce says, “The environment of being in a pandemic should have no effect on one’s ethics. Ethics are ethics. A person either has them or doesn’t have them.” Likewise, he added, “To paraphrase a favorite saying of many, ‘If you have ethics, nothing else is needed. If you don’t, nothing else will help.’”

Above all is a commitment to honesty and establishing trust. Prakash Rajan, CMA, CPA, director, internal audit at Kraton Corporation, shared that in times of crisis, organizations should “be transparent in all communication.”

Creating an Ethical Culture in a Remote Workforce

While the sudden yet long-term shift to remote work has forced organizations to reevaluate many internal processes and guidelines, Committee members shared that working remotely should not impact one’s ethical practices. Eichelberger points out, “As we all know, cameras are everywhere watching, just as people, somewhere, are watching our every action – in good times or bad. And actions always speak so much louder than words. Remember that ethics should not be dependent on whether or not they can be observed; ethics should be the same regardless if ‘on or off camera’ so to speak.” 

Likewise, making the shift called for careful planning and preparation, despite a tight turnaround time. Stacey Stephens, CMA, CPA, corporate accounting manager at Teespring added, “Ethics, which should be part of the company’s code of conduct, should have been properly planned and addressed prior to going remote. As a manager, I have discussions about current events and see how my employees are coping with internal and external issues.” An issue she took note of during the pandemic included well-off companies and companies with access to other types of capital taking advantage of Paycheck Protection Program [PPP] loans. While they did qualify for the loans under the letter of the law, it does raise a question of whether pursuing or accepting those loans was ethically sound.

Tapping into ongoing trends and events in the industry can also be included in virtual training sessions, a now integral part of continuing education for professionals. Razack says we can further “develop ethical behavior by providing more virtual courses on ethics.”

Ethical Issues and the Pressure to Perform

Unforeseen negative impacts of the pandemic have sparked an economic downturn, with both businesses and their accounting and finance teams struggling to reach their goals. The pressure to hit aggressive targets in a pandemic-stricken economy has ultimately led to ethical lapses. As with other aspects of company culture, members of the Committee believe an ethical climate is created through the exemplary behavior of company leadership and by establishing fair expectations.

When asked about ethical lapses due to pressure, Stephens shared, “Unfortunately, this is something which happens from the tone at the top. ‘Doing the right thing’ in the wake of a crisis is the backbone of a corporation. As far as limiting or preventing in times where it may be likely to have errors in judgement, accountants can use this time to evaluate internal controls and look at areas where a mitigating control may need to be developed and implemented. In times like these, it is imperative for management to address examples of types of ethical lapses along with each employee knowing the process for anonymously reporting concerning behavior.”

Setting a positive tone at the top can be accomplished by using ethics to inform strategy. Gerald Ratigan, CMA, CSCA, CPA, CPIM, senior director of accounting and financial reporting at Entertainment Benefits Group added that, “Executive management should include in its corporate level strategy plans to increase resources to create a more collaborative internal environment between new digital age roles and the existing workforce. Ultimately, the C-Suite strategic partnership between the CIO, CTO, and CFO will impact digital strategy and the company’s tone at the top.”

IMA’s Commitment to Ethics

In support of its commitment to ethics, IMA strives to influence members' everyday practices by providing tools such as the IMA Ethics Helpline. “By hearing members grievances and giving ethical support when they are in ethical dilemmas,” says Razack, the Helpline adds value.

Likewise, IMA’s Statement of Professional Practice establishes four overarching ethical principles – Honesty, Fairness, Objectivity, and Responsibility – in addition to four standards, including Competence, Confidentiality, Integrity and Credibility.

Information on IMA’s Ethics Helpline, the Statement of Ethical Professional Practice, and other resources can be found in the IMA Ethics Center.

“I’m proud to have been involved in the last two rewrites of IMA’s SEPP, all of the colleagues involved with me in that endeavor, and thankful for my longtime friendship with an IMA Ethical Legend, Curt Verschoor,” says Eichelberger.

IMA’s ethical guidelines are based on fundamental best practices for the accounting and finance function. Recalling her previous experiences, Stephens shared, “I utilize IMA for guidance. Since being ethical in business is where I am extremely unbending, I am also aware that I need guidance at times to see if my utilitarian approach is the ultimate right or if there is room for different ethical theories.”

Global Ethics Day is not only a time for accounting and finance professionals to reflect on or advocate for ethical values, but also to use foresight in advancing their organizations towards the best practices, especially in times of crisis. Having these guidelines in place impacts all levels of an organization, and ultimately, its financial success.