In today’s business environment, ethical conduct is not an option for brands — it is a strategic imperative. Stakeholders are increasingly calling on organisations to embrace ethical responsibility, uphold their commitments, and proactively hold themselves accountable. In an era where trust is fragile, these actions are essential for safeguarding and enhancing brand reputation.
Modern brands constantly grapple with ethical dilemma, especially when they find themselves navigating complex reputational landscapes.
Decisions that may seem operational or internal can swiftly escalate into public controversies, with consumers, advocacy groups and even political actors demanding transparency and accountability.
Whether it is responding to sensitive allegations involving employees, addressing concerns around products, customer experiences, sourcing practices, or confronting governance failures, the expectation is clear: brands must "do the right thing."
This growing pressure reflects a broader evolution in Environmental, Social, and Governance (ESG) expectations.
Ethical conduct lies at the heart of good governance, serving as the moral compass that guides corporate behaviour. Yet, in their pursuit of ESG goals, many organisations tend to prioritise the environmental and social pillars while underestimating the critical importance of governance.
According to a 2022 KPMG Survey on Sustainability Reporting: Big Shifts, Small Steps, only 41 percent of organisations globally, and a mere 28 percent in Africa, reported on governance-related risks — despite their profound impact on business integrity and compliance. To build and sustain ethical cultures, brands must strengthen governance structures.
Leadership plays a critical role in shaping and upholding ethical conduct within an organisation. Holistic ethical transformation begins at the top, with leaders who model integrity and inspire employees to consistently choose ethical actions, even when it is inconvenient or unpopular.
Ultimately, prioritising ethical conduct is not just about mitigating risks — it is about building enduring trust and securing long-term success. In a world where reputations can rise or fall in moments, ethical conduct is the foundation for sustained brand resilience.
This involves robust internal controls, such as board oversight and executive accountability, alongside vigilant monitoring of external factors like evolving regulations and shareholder expectations.
Governance should not be reactive; it must be proactive and anticipatory, continuously scanning the horizon for ethical risks and opportunities.
When leadership champions ethics not as a regulatory checkbox but as a deeply-held value, it creates an environment where doing the right thing becomes second nature — a collective and individual responsibility.
As highlighted in Cambridge University’s ESG Transformation Curriculum, organisations typically respond to ethical dilemmas at one of three levels of maturity.
At the "minimum" level, they aim simply to avoid harm. At the "common" level, they meet industry standards and engage stakeholders as required.
And at the "next level," they integrate ethical considerations deeply into their strategy and operations. Forward-thinking brands aspire to this highest level, embedding ethics into their DNA to future-proof their reputation and operations.
At the core of ethical conduct lies the brand promise — an unwritten contract between the organisation and its stakeholders. The brand promise defines what stakeholders—including employees, customers, investors, and the broader public can reliably expect from the organisation. It embodies the value the organisation is committed to delivering and serves as a guiding principle for its actions.
When consistently upheld, the brand promise strengthens trust, enhances credibility, and fosters lasting stakeholder loyalty. This promise must go beyond marketing slogans and manifest in daily actions.
When there is a disconnect between what a brand claims and how it behaves, stakeholders and customers take notice. Increasingly, they are inclined to seek out competitors that consistently uphold higher standards of ethical conduct.
The writer is the Marketing, Branding and Communication Manager with KPMG Advisory Services Limited.
