Industry and company codes of practice will only work if they are promoted at the highest levels of organisations, according to a leading ethicist.

Philippa Foster Back, the Director of the UK-based Institute of Business Ethics, says individual British companies are more likely to have codes of practice than whole sectors or industries.

Addressing the Insurance Brokers Association of NZ conference in Auckland, she said all businesses need to foster ethical attitudes to build trust with their customers. Codes of practice are seen as a good way of building that trust, and many companies now recognise their importance.

“In the early 1990s only 18% of large UK companies had a code, but today it is about 95%,” she told insuranceNEWS.com.au.

“In conjunction with this we have seen the number of companies training their staff [in ethical behaviour] rise from 46% in 2004 to 71% in 2007.”

Having spent most of her career in senior management roles in the British financial services sector – she also chaired the UK Ministry of Defence audit committee for several years – Ms Foster Back isn’t surprised that some insurance companies have sought the institute’s advice.

She says they mainly want to discover ways to build mutual trust while guarding against fraudulent claims, and to establish customer care as a key service differentiator.

“If a company has a problem or sees another company in its sector/industry [in difficulties], then we see a tightening-up and greater emphasis put on training and disseminating codes,” she said. 

“Sometimes it just takes a new CEO to give a code a new push and make sure it is embedded.”