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Ethics in Public Life

Sir Nigel Wicks, Chair, Committee on Standards in Public Life, to the Institute of Business Ethics, 19 September 2002

Introduction

Perhaps unusually, I am going to begin tonight by saying what I am not going to talk about.

No sermons, no lectures

I do not come here from the Committee on Standards in Public Life to ascend a pulpit and to give you a sermon. Indeed, as part of my life nowadays, I am in business, as a chairman of a company which plays an important role in keeping the financial markets going.

So I am one of you, facing ethical decisions in the stewardship of a company.

The current work of the Committee on Standards in Public Life

Nor do I come here to give a taster of the conclusions which my Committee is likely to reach on the two major inquiries which it now has in hand – on ‘Standards of Conduct in the House of Commons’ and on ‘Defining the Boundaries within the Executive: Ministers, Special Advisers and the Permanent Civil Service’.

We finished taking evidence yesterday and our deliberations on that evidence have already begun. The Committee intends to stay silent on the content of our reports until they are published – the report on the House of Commons probably early in the new session of Parliament and on the Executive around the end of the year.

To talk about philosophy

Instead I want to talk about philosophy – the philosophy which underlines the work of the Institute of Business Ethics and of my Committee.

Public office holders in the United Kingdom uphold high standards

But first I want to state my belief that the overwhelming majority of holders of public office in this country, Members of Parliament, Ministers, civil servants, people in local authorities and in public boards, uphold high standards of conduct. Lord Nolan was keen to make this point in the First Report of my Committee and it has been backed up by some weighty academic and economic studies.

But I rather like the way one of our senior political journalists, Andrew Rawnsley, put the point in the Observer earlier this year:

‘Relatively speaking British politics is pretty clean. In the European Sleaze Championship, the Brits do not get near the final... I doubt that the gentlemen amateurs of Britain would even get an invite to the games... So everything is just fine, then? No, of course it is not. The greater corruption elsewhere in the world should not serve as reason to be complacent. It is a caution about where our politics will slither if we leave sleaze unchecked.’

It is an interesting question whether this belief in high standards is widely shared by my fellow citizens. And it is a question which the Committee are anxious to have answered, as I shall explain later.

I state my belief in high public standards not in any sense of complacency. It is the task of my Committee to help public office holders maintain these high standards. That is our remit.

The Institute of Business Ethics has an ambitious remit

Turning to the remit of the Institute of Business Ethics, I admire the founders of the Institute for their ambition. I admire them too for their willingness to nail their colours firmly to the mast – by making clear that the Institute is in the ethics business. Brave and ambitious because to many, the word ‘ethics’ summons you to a higher, more challenging and in some ways a daunting ideal way of life.

The terms of reference of the Committee on Standards in Public Life appear more cautious

The founders of my Committee, in contrast, were more cautious, less entrepreneurial perhaps. Because they chose for the title of their instrument the rather low key ‘Committee on Standards in Public Life’.

If you look at the Committee’s precise terms of reference you will see that we are enjoined:

‘...to make recommendations as to any changes in present arrangements which might be required to ensure the highest standards of propriety in public life’.

So no mention of ethics there.

The Institute and the Committee are in the same business

But make no mistake about it. Though our labels are different, your Institute and my Committee are in the same business. One of this country’s Professors of Philosophy, Simon Blackburn, defined the ethical environment nicely when he made the link between ethics and standards in the following terms:

‘This [the moral or ethical environment] is the surrounding climate of ideas about how to live. It determines what we find acceptable or unacceptable, admirable or contemptible. It determines our conception of when things are going well and when they are going badly. It determines our conception of what is due to us, and what is due from us, as we relate to others. It shapes our emotional responses, determining what is a cause of pride or shame, or anger or gratitude, or what can be forgiven and what cannot. It gives us or standards – our standards of behaviour’.

So the journey from ethics to standards is, at least in Professor Blackburn’s terms, a short one.

In fact, the remit of your Institute:

‘to encourage high standards of corporate and business behaviour through raising awareness of the issues and the sharing of best practice’;

and of my Committee covers, in relation to ethics and standards issues, two out of the three major sectors of our national life – government and business, with the third sector, the voluntary sector, not falling to either of us.

I will examine in a moment what precisely we mean by ethics and by standards of propriety in public life; and from where we can draw those ethics and standards. I will also go on to make the claim that government – and of course I do not speak for government, nor for over two years have I been working for government – has a legitimate interest in business ethics. Indeed, to use the modern jargon government is a stakeholder in the success of your Institute.

The Committee and the Institute are essentially creatures of the same time and culture

Before I come to that, it is worth making the point that this Institute, in its present form, outranks my Committee in seniority by some nine years. But we are both essentially creatures of the same time and culture.

Of course, there were pioneers in the field before that. One was Simon Webley, the Institute’s Research Director who has made such a positive contribution to the debate over the course of three decades. But it was not really until the 1990s that the issue of corporate good governance – which is the foundation stone for business ethics – came on to the agenda with a string of reports:

Indeed, Sir Adrian Cadbury produced the first significant report in December 1992, some 30 months before my Committee under its first Chairman, Lord Nolan, produced its First Report, ‘Standards in Public Life’, in May 1995.

I will leave it to the historians to decide whether the same tectonic forces at work in our society stimulated the emergence of your Institute and my Committee.

Some tectonic forces at work

But whatever the cause and effect, there were clearly some common forces at work in our society which helped shape the environment in which our two institutions began to work.

A moment’s reflection on the nature of post-war society will show how far we have come in fifty years. Fifty years ago, in the pre-Robin Day/ ‘That was the week that was’ era, the behavioural standards, the ethics of the ruling cadres were seldom challenged in the media. The 1960s saw an increase in the pace of erosion of the foundations of the deferential society. The first products of the 1944 Education Act began to think for themselves. And I guess I am one of those products.

These new generations challenged the assumptions about ‘the establishment’, ‘the powers that be’ which their parents, or most of them, took for granted. An increasingly competitive media was keen to satisfy the public’s demand for more and more information. Investigative journalism became the fashion – with a massive expansion of media outlets, satellite and digital broadcasting, wire services and a proliferation of community radio stations and freesheets.

I make no complaint about this new world. It is a facet of our modern, vibrant democracy. Peter Preston, a former Editor of the Guardian, put the point well to the Committee in 1995:

‘we are an imperfect lot in a very imperfect world... but the press has the duty to monitor the workings of government and the workings of the legislature on behalf of the people... that is what we are there for.’

These forces have yet to run their full course

I doubt whether these forces have yet run their full course in the world of politics. But those forces are also shaping the world in which business has to operate. And I believe that for both public and business life the message is clear.

Reputation for integrity – a key asset

Reputation for integrity will increasingly become a key asset. And of course, Integrity is one of the Seven Principles of Public Life, which my Committee promulgated in its First Report in 1995.

Richard Lambert, the former Editor of the Financial Times, put the point well as it concerns financial services,my business interest, in his lecture last February to the Securities Institute. He said:

‘once a financial bubble comes to an end, it becomes clear that ethical behaviour is just not an optional extra. It’s the glue that holds businesses together... lots of firms are going to discover that this sense of trust – carefully nurtured and built on a set of shared values and ethical practices – will turn out to be a real competitive advantage.’

In referring to Richard Lambert’s lecture, I cannot resist reusing his quotation from Groucho Marx, who famously advised:

‘the secrets of success in business are honesty and fair dealing. If you can fake those, you’ve got it made’.

The best firms are already heeding Richard Lambert’s wise advice.

In his evidence to one of our recent public hearings, Simon Webley told us of a survey that showed that nearly 50% of companies he had surveyed gave their staff training in their Code and corporate values, and over 50 per cent build their Code into staff contracts.

Government has a legitimate interest in Business Ethics

And as I said a moment or so ago, government has a legitimate interest in the progress which business makes in creating that sense of trust, the carefully nurtured and built on set of shared values and ethical practice to which Richard Lambert so eloquently referred.

After all, incorporation and the privilege of limited liability are granted by government in the interest of the wider public good. So government has a legitimate right in ensuring that those who benefit from those privileges exercise them responsibly. And that is at the heart of the work of this Institute. Again to quote Simon Webley:

‘I think the general public continues to question the licence to operate a business... the way in which business is done and the way different stakeholders are treated is very important... Business is now realising that this is a fact and that they will have to earn that licence to operate for this generation, as they did for the last generation.’

Wise words, if I may say.

Whose ethics? Whose standards?

Let me now turn to a question that I have so far begged in my remarks. I have talked about ethics and standards. But the question which can reasonably be asked, ‘whose ethics? Whose standards?’

To attempt to answer this question can lead you into the densest of philosophical thickets in which the cleverest minds through the ages have lost poor ignorant souls such as me. So I don’t propose to subject you to a disquisition this evening on the moral imperative from Plato through Hume, Kant and the modern day Rawls.

The Committee’s survey into public attitudes

No, my Committee took a much simpler approach. It based itself on the fundamental principle that people entering into public life have accepted special responsibilities. The people entrust public officials with powers to make law, or to advise on the making of law, which can change people’s lives. Public officials are entrusted with the use of public money that comes, ultimately, from the pockets of the people.

To use the words of another philosopher, Stuart Hampshire:

‘Although the dividing line between private life and public responsibilities can never be definite and clear, there is a moral threshold which is crossed both by those who assume power to change the lives of many men through public action and by those who undertake to represent in a public role the will and interests of many other men. A new responsibility, and even a new kind of responsibility, and new moral conflicts, present themselves.’

And it was from this sort of thinking that there emerged the Committee’s Seven Principles of Public Life: Accountability, Selflessness, Leadership, Integrity, Honesty, Objectivity and Openness. But my Committee is well aware that it is not enough to promulgate these principles, as it were, from the pulpit at Great Smith Street, where the Committee has its small office.

We need to be sure that they are indeed the principles to which the people to whom public officials – whether elected like Members of Parliament or appointed like civil servants – are all ultimately accountable. And so that we can be sure, the Committee has commissioned a survey into public attitudes on matters of standards of public officials.

This is quite unlike any of the other work my Committee has done in the past, but it will help us ensure that we are addressing genuine concerns of our fellow citizens.

The work is in its early stages, identifying the questions that need to be raised and defining a way of asking the questions. We will shortly be ready to commission the next phase of work, and I hope we will have final results for publication towards the end of next year.

My Committee will then be in a much better position to say with confidence what principles the public expects its public officials to uphold in public life. So to echo the quotation that I gave you early from Professor Blackburn, we will then have some measure of the moral or ethical environment in which public officials work.

Let me conclude with three practical points.

The importance of leadership...

First, to emphasise the importance of leadership. Ethics, Standards, call them what you will, have to come from the top. Top people, Company Directors – and I am one – Ministers, Members of the House of Commons, senior civil servants, senior people in the local authorities and on public boards, have to lead. They have to set a good example.

All these people have one characteristic in common. They act in a sort of trustee capacity. Public officials act in some ways as trustees for the people. Company directors are trustees for the shareholders’ interest, as well as having some responsibility for their staff and for the wider environment in which their companies operate.

There can be no double standards. Perception of conflicts of interest can destroy reputation overnight: as a Wall Street banker told his staff recently:

‘We must do everything we can to identify, eliminate or manage conflicts of interest – real or perceived – as they arise, and we need constantly to strengthen transparency through meaningful disclosure.’

That is a statement that is as applicable in the world of business as it is in public life.

Openness and transparency

And that statement conveniently leads to my second practical point, which concerns openness and transparency. We all know that famous saying of Franklin Delano Roosevelt:

‘Sunlight is said to be the best of disinfectants; electric light the most efficient policemen.’

Of course, openness, transparency, frankness – call it what you will – runs risks. It can provide the basis for press stories, sometimes distorted, for attack by competitors, in politics and in business. And I can speak from my own experience. The temptation is always there – not to disclose, or to disclose only the minimum, what you can get away with.

But again experience suggests that openness can help build up trust. So that when something does go wrong, there is a reservoir of trust on which to draw.

Culture

My third practical point concerns culture. The standards, the ethics, must become embedded into the organisations everyday behaviours, whether that organisation may be a public institution at the heart of government or one of our smaller companies.

That is what has to happen with standards. Even a Code and a charismatic leader do not guarantee the desired end result in either the private or the public sector – the business with high ethics, the public body with high standards.

A Code is useless unless the people it covers first, know it exists and what it says; second, understand how it should affect the way they carry out their duties; and third, actively want to be part of the culture it represents.

And it is with that thought that I want to conclude tonight.