In this series of conversations about ethical leadership, we speak with high profile ICAS members who have reflected on what it means to do the right, or ethical thing throughout their careers. It is hoped that the conversations provide practical guidance to help anyone in a challenging professional situation where they are required to seek the truth and then act.
As well as interviewing these ICAS members individually, under Chatham House rules, we also surveyed our members in a quantitative survey during 2024, conducted by Dodds & Law Research Associates. We received 710 responses from a survey of 10,000 members and we have taken some of the results and findings and used them in this report to highlight the wider views of members.
Insight three
Doing the right thing can often feel uncomfortable, but this is not a reason not to act. In the third instalment of our ethical insights series, we explore ethical challenges faced by CAs and the actions they took. One of the defining characteristics of ethical leadership is that you are willing to call out the behaviour of others, even if doing so is likely to give rise to conflict or challenge:
“Working for an audit firm earlier in my career we had a lot of clients in the North Sea which at the time was a bit like the Wild West. Where I was based, there was no professional accountancy body as far as I can remember and some of the people that we dealt with who described themselves as accountants – well I would describe them as free spirits. I was just an apprentice at the time, but I remember people pumping stuff through the books that they should not have been doing. When I challenged this at an audit meeting a huge Norwegian guy threatened to throw me down the stairs.”
“I remember being in a meeting with my CEO where suddenly, out of the blue, there was a very brief discussion with a competitor about what prices were being put in for a tender. The conversation was extremely quick and moved on before I fully registered, but I made a point of meeting with the CEO afterwards and telling him I was extremely uncomfortable about what had been exchanged – which was not just illegal but unethical. And that I did not want to be part of an organisation that behaved in that way.”
The need for consistency of approach in the face of sectoral differences of expectation is also vital:
“One of the things that struck me when I moved into industry from the profession, which came as a bit of a culture shock, was how people perceived variances. When I was in practice, if we saw a set of projections and a variance to the actual results we would explain that variance. In industry I learned quite early on that people do not want there to be a variance in the first place – good or bad.
“I remember on one occasion, starting a new role and looking at a set of projections prepared by my predecessor. When the actual results came in, there was an enormous discrepancy in one particular line item. Ethically, it was a shock to me that the people I was working with seemed to want to brush this under the carpet, which I did not allow them to do. What I did do was ensure that the variance was explained fully and that new and better methodologies were introduced to improve the rigour of the projections in the future. It’s important to ensure that your team and the people that you work with are not afraid to say the right thing or do the right thing.”
At the end of the spectrum, ethical leadership can be a brutal experience, but also cathartic:
“I was sitting at a board meeting of a large multi-national as a Non-Executive Director and someone mentioned something about bribery. I queried this only to be told by a majority of the board that this was how business got transacted in this part of the world. I said ‘sorry – this is just not on’. I and another board member went to the lawyers, raised the matter and appeared in court. I think the company were fined just over £1m at the time. We gave them all the evidence and were actually complimented by the judge for having done what we did.”
There are also situations where doing the right thing can cause drag on the business. But this is not a reason not to act.
“I remember working with a company operating in a number of overseas jurisdictions in difficult parts of the world. There were times when goods would be held up in customs because we would not pay backhanders. We took the view that it was better in the long run for the business not to do that sort of thing. There were so many occasions where you would be waiting for approvals where time was money and it might have been tempting to say – ‘ok, who do we need to get on side?’. But you know, it just was not worth it. At the end of the day, doing so puts an unquantifiable amount of risk on the business.”
When you find yourself in ethically challenging circumstances, knowing you have the support of those around you – that you are properly backed – is really important:
“In our firm if an audit partner gets significant push back from a client, they will escalate it, knowing they will be helped by a more senior partner. Ultimately if we do not like the direction of travel this gives us the ability to go in and say, ‘this is not an individual partner view this is our firm’s position, and we have a responsibility to make sure you are doing the right thing’.”
“A really important part of being able to take ethical decisions is the psychological safety around you. Knowing that, if you’re going to make a tough ethical decision, that you have the support of the firm or your partner or senior manager, whoever you’re working with – it really matters.”
