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Ethical influences and societal expectations

Ethics versus the law

Legal means the business is allowed to do it. Ethical means it is the right thing to do.
The two are not the same, and the gap between them is where this part of the standard lives:
- Legal and ethical — paying staff correctly and on time
- Legal but widely seen as unethical — heavy marketing of an unhealthy product to children
- Illegal but common — deducting the cost of equipment from an employee's wages without agreement
Societal expectations are what the public believes a business should do, whether or not it is required to. They change over time, and they change faster than the law does.

Environmental care — reducing waste, plastic packaging, emissions and water use; not degrading waterways.
Fair treatment of workers — safe conditions, fair pay, no exploitation of migrant or seasonal workers, and no exploitation in overseas supply chains.
Honesty in marketing — claims that can be substantiated, especially environmental ones.
Fair dealing with suppliers — paying small suppliers promptly, not using buying power to squeeze them.
Respect for te ao Māori — consulting iwi and hapū where a business affects land, water or cultural sites, and not appropriating cultural imagery for marketing.
Transparency — publishing what the business does, and being straight when something goes wrong.

Consumers can act instantly. Social media turns a single incident into a national story in hours, and the reputational loss is immediate while the recovery takes years.
Staff choose employers. Skilled people avoid businesses they are not proud of, which raises recruitment costs and lowers quality.
Large customers impose their own standards. Supermarkets and export buyers audit suppliers on labour and environmental practice, so failing an expectation can cost a listing.
Investors and lenders assess these risks, and a business seen as reckless pays more for capital.
Expectations become law. Practices that society rejects are usually regulated eventually, so a business that adapts early avoids a forced, expensive change later.

Change the practice — remove the packaging, treat the discharge, fix the pay issue.
Verify and publish — measure, report and let the claim be checked, rather than asserting it.
Consult the affected community, including iwi and hapū, before deciding rather than after.
Audit the supply chain, so the business knows the conditions under which its inputs were made.
Train staff on the standard, so it survives contact with a busy Friday afternoon.
Accept the cost as an investment, and say so internally, so it is not cut in the first difficult quarter.

Meeting societal expectations costs money now and pays back in reputation, staff and reduced risk later.
A business that ignores them is more profitable in the short run and more fragile in the long run.
That is the same trade-off as corporate social responsibility, seen from the outside: CSR is the business's decision, and societal expectation is the external pressure that shapes it.

Legal means the business is allowed to do it. Ethical means it is the right thing to do.
The two are not the same, and the gap between them is where this part of the standard lives:
- Legal and ethical — paying staff correctly and on time
- Legal but widely seen as unethical — heavy marketing of an unhealthy product to children
- Illegal but common — deducting the cost of equipment from an employee's wages without agreement
Societal expectations are what the public believes a business should do, whether or not it is required to. They change over time, and they change faster than the law does.

Environmental care — reducing waste, plastic packaging, emissions and water use; not degrading waterways.
Fair treatment of workers — safe conditions, fair pay, no exploitation of migrant or seasonal workers, and no exploitation in overseas supply chains.
Honesty in marketing — claims that can be substantiated, especially environmental ones.
Fair dealing with suppliers — paying small suppliers promptly, not using buying power to squeeze them.
Respect for te ao Māori — consulting iwi and hapū where a business affects land, water or cultural sites, and not appropriating cultural imagery for marketing.
Transparency — publishing what the business does, and being straight when something goes wrong.

Consumers can act instantly. Social media turns a single incident into a national story in hours, and the reputational loss is immediate while the recovery takes years.
Staff choose employers. Skilled people avoid businesses they are not proud of, which raises recruitment costs and lowers quality.
Large customers impose their own standards. Supermarkets and export buyers audit suppliers on labour and environmental practice, so failing an expectation can cost a listing.
Investors and lenders assess these risks, and a business seen as reckless pays more for capital.
Expectations become law. Practices that society rejects are usually regulated eventually, so a business that adapts early avoids a forced, expensive change later.

Change the practice — remove the packaging, treat the discharge, fix the pay issue.
Verify and publish — measure, report and let the claim be checked, rather than asserting it.
Consult the affected community, including iwi and hapū, before deciding rather than after.
Audit the supply chain, so the business knows the conditions under which its inputs were made.
Train staff on the standard, so it survives contact with a busy Friday afternoon.
Accept the cost as an investment, and say so internally, so it is not cut in the first difficult quarter.

Meeting societal expectations costs money now and pays back in reputation, staff and reduced risk later.
A business that ignores them is more profitable in the short run and more fragile in the long run.
That is the same trade-off as corporate social responsibility, seen from the outside: CSR is the business's decision, and societal expectation is the external pressure that shapes it.