Why Ethics belongs in the Private Sector?

Ethics regimes, ethics reforms, codes of conduct, codes of ethics, and ethics rules were not originally developed with the private sector in mind.  As the economy has become increasingly “global,” many states have lost some level of control over their compliance with ethics standards, and, often, the ability to assess and even sanction violations of labor codes and environmental standards.  Globalization, nevertheless, has created new opportunities for companies, which now can shift their production to parts of the world where the cost of labor is cheaper, thereby increasing profit.  Opportunities notwithstanding, companies are also facing new restrictions. As people have become better informed, customer concern has become increasingly focused on the ethical, environmental, and labor standards of companies that become global by writing and calling companies to complain about human rights violations, demonstrating against the companies, supporting company anti-sweatshop organizations, filing shareholder resolutions, and in some cases, boycotting products and companies that are allegedly not respecting basic ethical. These ethical violations involve but are not limited to issues concerning child labor, employee harassment and abuse, and solutions consisting of nondiscrimination laws, freedom of association, collective bargaining agreements, health and safety standards, and adequate wages and hours of work.

Customers’ rising ethical concerns have rapidly and radically reshaped the environment in which companies operate.  Reputation has now become a precious asset-which not only dictates the economic success of a company, but its survival.  Not surprisingly, companies in the past fifteen years have made conscious efforts to protect their reputation and reassure their customers of their adherence to a certain level of ethical principles.

Private sector ethics standards are created to respond to that consumer-based need. To do this, the private sector develops a list of obligations to adhere to human rights standards, and the beginning of what would become the Corporate Responsibility (CR) or Corporate Social Responsibility (CSR) movement.  Corporate social responsibility is the commitment of businesses to behave ethically and to contribute to sustainable economic development by working with all relevant stakeholders to improve their lives in ways that are good for business, the sustainable development agenda, and society at large.