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The Need for Consulting Ethics

20th April 2017 | David Yardley

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Consulting is an exciting and rewarding sector within the global economy. It attracts some of the finest minds and can offer unparalleled career development rarely seen in other employment sectors.  The high-value professional services provided by consultancy firms however are reflected in the fees that consultancies charge for their services. Clients rightly therefore, have high expectations of what they will get for their investment. Those who commission the services of consultancy firms do so with the expectation that their needs will be met, hopefully exceeded, and that the consultants they engage will perform their duties in a professional and ethical manner. Whilst this is a laudable set of behaviours for the consulting profession, the stark realities of consulting engagements will mean that consultants are likely to be placed in situations that expose them to a type of risk for which they are totally unprepared – ethical risk.

The problem with business ethics

Since the concept of business ethics was introduced into business parlance in the 1970s,  it has struggled to gain traction with many business professionals.  According to a report published at a time when the initial hype surrounding business ethics was probably at its highest,  90 per cent of US business schools were providing training in business ethics and at least 16 business ethics research centres were operating in the country. Despite this,  the report went on to suggest that,  for most managers,  the field of business ethics was largely irrelevant. Blogs  on  the  subject  of business  ethics  also  suggest  there  are  still  many challenges to be overcome if the average business professional is going to benefit from it.

All business professionals,  including of course,  consultants,  should have  an understanding of  ethics; many  already have,  but,  arguably,  the scope of their education and training often seems to focus on the more popular topics of accepting hospitality,  bribery and anti-competitive behaviour.  Those who are less fortunate will find the scope of their business ethics training covers little more than a discussion on the relative merits of Kantian ethics or  Aristotle’s Golden Mean.  Useful,  yes,  but in terms of real-life ethical dilemmas these will do little to promote a subject that many observers comment on in the following ways:

  • Ethical concepts are too vague and cannot be related to business;
  • Ethical concepts are understood but the course of action is not clear;
  • Ethical concepts are not communicated in a language people understand.

Many of the critics of business ethics suggest that the subject often occupies a  rather  elevated  moral  position  that  bears  little  resemblance  to  the  real problems facing the vast majority of business professionals.  There is also a growing belief that too much emphasis is placed on theorizing around concepts of ethics rather than providing the guidance and tools to help business professionals apply ethical concepts.

The need for practical consultancy ethics

The risks associated with unethical behaviour are out there for everyone to see. Frequent media coverage of ethics scandals is often disturbing, dramatic and sensational. So sensational in fact, that otherwise respectable organizations are remembered for the one, but costly mistake they made - punitive fines and lengthy prison sentences seem to be common outcomes for the most serious cases.  In reality, for many consultants, this is not going be the case.  That said,  the consequences for unethical behaviour could still be severe.  For consultancy firms,  litigation is always a possibility,  as is the loss  or  reduction  of revenue.  Probably  the  most  damaging  consequence  for consultants and their employers,  however,  is the damage that such behaviour can do to their respective reputations.

Consultancy firms and consultants rely  on  their  reputation  to  trade  in  a  professional  and  competitive  global market.  Fees can always be negotiated,  but reputations cannot.  For the individual consultant,  their professional reputation is the most important attribute they can possess.  It represents their professional capital, their personal brand, but most of all, their professional reputation represents their licence to practise.

Reputations in business are a fragile and fickle concept: they take years to develop and yet can be lost overnight. The reputation of a consultant is no different.  Once lost,  it will be very hard to recover. There are,  of course,  many other consequences of unethical behaviour, many of which are far reaching,  creating outcomes that can have significant and damaging effects not only for the consultant,  but also for their employer and their clients.  For an independent consultant,  where the consultant and the employer are likely to be one and the same,  the potential consequences are considerable.

Consultants do not wake up one day and decide to be unethical; if they did they would not last very long in a profession that is able to select recruits of only the highest calibre. It is more likely that, in the absence of proper ethical training, consultants do not recognize their actions as being unethical, or being perceived as unethical, by others.

Consider the implications of this for a moment. Consultants, in the course of their engagements, make a decision or choose a course of action that, at the time, seemed like the right thing to do. Maybe it was out of loyalty to their client or out of duty to their employer, but they end up in a situation that causes questions to be raised about their professional integrity – hardly the outcome they were expecting.

The future of consultancy ethics

The consulting profession is different to other professions such as medicine and law in the sense that it is not regulated. If it is to remain that way, the organizations and individuals within it will need to demonstrate that they are capable of proving they can act ethically themselves.

Ethics and the professional behaviours that are associated with it are now becoming key differentiators within business. Many customers now expect their suppliers to demonstrate ethical behaviour and in a growing number of cases, state precisely how they maintain an ethical culture within their organisations. Ethics must no longer be thought of as just a marketing tool that has no real influence on the culture of the organization, but instead, represent a fundamental set of repeatable behaviours that should be met by all consultants regardless of role or grade. How well consultancy firms respond to that challenge will reflect on the consulting profession as a whole. If there was ever a need for consulting ethics, it must surely be now.

Buy a copy of Practical Consultancy Ethics, by David Yardley, with 20% off using the discount code: SBL20

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Business, Finance, Risk, Information Management

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