Recent academic research suggests that the organizational and conceptual distance between ethics, CSR, and strategy weakens the efforts all three. If the Ethics department is seen as the home of “compliance cops” who are interested primarily in keeping the firm out of legal trouble, employees sense this and will be less likely to behave in ways that create an ethical culture. If CSR is perceived as a marketing gimmick without substantive changes in the way the company actually operates and reports the impacts of its operations, that will further weaken the company’s internal sense of itself as an ethical firm. “Greenwashing” ultimately backfires. And if strategic decisions, like the selections of markets, customers, and products, are divorced from the ethical values that the firm espouses in Ethics and CSR, that signals to both employees and external stakeholders that there is not a coherent, normative set of values for the entire company.
A section devoted to “guiding values” is common to Codes of Ethics, CSR reports, and strategic plans. To develop a company culture that is consistent and deeply embedded, the substance of these sections should be identical. A company’s guiding values should be explicitly stated and used in decision making at all levels of the company. An integrated system of values that ties together Ethics, CSR, and ultimately, all other disciplines within a company, will make it stronger, more competitive, and will reduce its risk profile.