Ethics in business is not something that just happens.
Ethical behaviour flows from a true desire to practise the Golden Rule, a seeking out of what is right in a given situation, and an innate moral compass that governs a business leader’s actions when he or she thinks no one is looking.
Given the rollcall of corporate fraud in North America and overseas – Enron, Parmalat, Bre-X, to name some – one might conclude that we’ve entered some sort of ethical Dark Age.
But such dishonesty has long been with us.
The only difference today from a generation ago is that it’s occurring on a scale approaching that of France’s Mississippi Scheme and England’s South Sea Bubble that whipped 18th-century societies into investment frenzies.
By the first decade of the 20th century, law-abiding North American society was fertile ground for any movement that would engender truth and honesty in the marketplace.
Local advertising clubs, fed up with false advertising, began organizing “vigilance committees” through which volunteers encouraged advertisers to back up their questionable claims, always with the view to promoting public confidence in advertising.
The Minneapolis Advertising Club organized the first vigilance committee in 1912, and out of this grew North America’s Better Business Bureau system that now consists of more than 135 bureaus, including 14 across Canada.
Better Business Bureaus are not-for-profit organizations run by local executives and guided by boards of directors that represent cross-sections of their business communities. Virtually all their funding comes from local businesses.
BBBs help businesses and their customers resolve disputes while maintaining a neutral stance, and they create public “reliability reports” that show the company’s complaint history – documents intended for the use of consumers and other businesses.
They also investigate patterns of business misconduct in the marketplace – itinerant “contractors,” for instance, who bilk senior citizens through bogus work – and issue “alerts” to the public.
Most of a Better Business Bureau’s support comes from small businesses whose owners believe in fair dealings and are willing to put their money where their beliefs are.
BBBs serve as beacons of ethical conduct, and the BBB name and logo have universal public recognition. Businesses phone for advice, and many join (after undergoing screening) to show their market what they stand for.
The BBB imprimatur can be crucial for a startup in a sector known to generate complaints. (The business must be at least six months old before it qualifies for membership).
At the BBB of Southern Alberta where I work, I never cease to marvel over how dozens of directors and employees – each with his or her own personal code – are able to achieve consensus in the running of an organization whose stock in trade is ethics.
Nettlesome issues arise on a daily basis – how to close a complaint file, for instance, or what constitutes unethical behaviour, or whether a junk-fax company should be granted membership.
Most BBBs react with stunned disbelief when they hear news reports about prominent executives who manage their shareholders’ money with wild abandon or use corporate expense accounts to maintain lavish lifestyles.
BBB managers account for each nickel of their members’ money as if it were entrusted to them by their maiden aunt. Give a bureau official two nickels to rub together and chances are, he or she could get them to sing Yankee Doodle Dandy.
BBBs are attuned to their marketplaces through their local boards of directors and executives. They often reflect the characters and personalities of their CEOs, the extent of which depends on the relationship the chief executive has with his or her board.
All bureaus are audited once every three years by the Council of Better Business Bureaus (CBBB) in Arlington, Va. to ensure compliance with uniform standards and procedures.
By joining a BBB, a small business puts itself on an equal footing with large corporations with their own customer service and legal departments.
The BBB gives anyone in the private sector the means to address complaints in a calm, professional manner. Business owners can continue going about their business and making money while allowing a trusted third party to take charge of complaints.
Business takes care of its own problems through its collective resources rather than relying on government to do this for it – an observation that ought to go a long way in Western Canada’s bastions of conservativism.
But altruism isn’t the only motivating factor.
Bureaus work hard to create benefits of membership, some of which include BBBOnLine – which allows qualified members to display the BBB Reliability Seal on their websites – discounted credit- card rates, networking luncheons and seminars.
In Canada, the BBB system has its strongest presence in B.C. and Alberta, where each province has two bureaus.
The BBB of Mainland B.C. has long been the country’s largest – based on membership numbers – with the BBB of Southern Alberta, Calgary and BBB of Central and Northern Alberta, Edmonton, see-sawing back and forth for second place.
Ontario has the highest number of BBBs, five in all from Windsor to Ottawa.
BBBs play a valuable role because law enforcement alone won’t eliminate misconduct. According to CBBB research, two million Americans were behind bars by 2000. Yet white-collar crime continues to spread rapidly, with identity theft increasing by about 40 per cent per year.
Better Business Bureaus know they must do more to shine the torch on shady practices and lead the way to an ethical marketplace. They continue to work hard to increase memberships and broaden their programs.
Through the BBB, small business has the collective power to foster an ethical marketplace and make it a global showpiece for an ideal economy – where profit can be made while the public remains happy with what it has received.
Web watch:
www.bbb.org
(Brock Ketcham is the director of trade practices of the BBB of Southern Alberta. He can be reached at brock@businessedge.ca)
