Tips to Build an Ethical Company

Ethics exploring the concept of “enlightened self-interest” can create a framework for better decision-making without requiring a commitment to pure and unrealistic altruism, which is a strategic imperative for 21st-century businesses. Building an ethical business is just as important as creating a positive work environment, raising funds, developing an effective business strategy, motivating employees, and putting in place the necessary resources. As a result, Nicole Diaz, the Global Head of Integrity & Compliance Legal for Snap Inc., discusses some ways to build an ethical company in this episode from the Entrepreneurial Thought Leaders podcast published on Stanford eCorner.

Nicole starts the conversation by explaining what an ethical company is. While ethics refers to the moral principles that guide our decision-making, it is also important to think about which moral principles should be chosen and why businesses should be ethical. Nicole discusses three frameworks that can be used to answer these questions in an appropriate and efficient manner. Profit maximization is the first framework, which she discusses further in the discussion. The business of business, according to her, is to make money for its shareholders. While it should concentrate solely on that, ethics is simply a constraint on its ability to make money. As a result, according to this first framework, businesses should adhere to very few ethical standards. However, this framework has a number of flaws, not only in terms of interpersonal relationships but also in terms of workplace tensions. As a result, she moves on to the second framework. She talks about it and discovers that most people want to be thought of as good people. This turned out to be a contentious framework with a high chance of failure. She then moves on to her final framework. She recommends investing in the long term in order to build an ethical company using this framework. This, she claims, is an excellent framework because it aligns your self-interest with ethical action and directs your attention to your impact on others. As a result, she believes that in order to build an ethical company, it is critical to consider all of these factors while also making a profit for the stakeholders, putting aside the desire to always portray yourself as a better person, and instead of acting in your own self-interest, considering everyone’s benefit and interest legally, ethically, and firmly.

Understanding what an ethical company is and how to build one begins with a basic understanding of what an ethical company is. While there is not much guidance, Nicole Diaz, Snap Inc.’s Global Head of Integrity and Compliance Legal, will undoubtedly guide you through the process in this podcast episode.