Company certifications

Ethics has a quantifiable cost and produces value

Continuous collaboration between enforcement institutions, judicial bodies and local public institutions is needed to update scores

by Alessandro Arrighi

4' min read

4' min read

Ethics certification is now a key issue worldwide and being able to meet precise, measurable and documentable standards becomes indispensable for global competition.

Like all means of production, ethics also has a cost, which must be quantifiable ex ante and must be capable of producing value. If, in fact, the ethical quality of the entrepreneur, as Man, should be able to morally disregard the measurable and speculative aspects, from a corporate point of view this quality can only be interpreted as a distinctive competence of the corporate structure.

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In this sense, certainly, the concept of ethicality cannot be trivialised in mere compliance with the law. What we are talking about is, in fact, the basis of a strong corporate culture, which becomes a bonding instrument for the entire system of the company's social stakeholders.

The most obvious observation is that, since the law should represent the ethical sentiment of a nation, certainly, the ethical rating should, first of all, acknowledge a company's compliance with the law. There are, however, those who fail to see that mere compliance with regulatory provisions can certainly not be the sole pillar on which the definition of business ethics hinges, this being an aspect that, in a modern society, should be a prerequisite for general coexistence

Some figures already exist to certify, at least in some particular sectors, that an entrepreneur's behaviour complies with the rules, just think of the white lists, held at the prefectures, to which companies, operating in particular sectors, must register in order to be able to operate, or other instruments for certifying honourability and ongoing proceedings. The use of these instruments, necessary, with a view to a timely assessment, runs the risk of creating real distortions in the system, given the fact that, in a state of law, until a final judgement, strictly speaking, no one should ever be considered guilty, and above all never an entrepreneur, in order not to impose, without reason, a penalty, that of the loss of company value, which would risk damaging not only those who are subjected, but also all shareholders and stakeholders.

In order to overcome the complexity that is, of course, associated with the definition of ethicality, one must probably be prepared to accept a greater complexity of procedures and instruments used. In particular, a reward regulation would be necessary, whereby:

1. All the above elements should be taken into account, and therefore not only those related to the most serious offences, but, to a different and lesser extent, also those related to unpaid taxes or other civil offences which, although not criminal offences, can in fact demonstrate the difference between a more or less correct or corrupt entrepreneur.

2. The individual elements indicated above should be applied jointly, establishing different scores depending not only on the different hypotheses of the offence, but also on the status of the possible proceedings, since it is very different whether there is a judgement pending at first instance or a double conforming judgement pending cassation, and being in any case, even more different whether such double conforming judgement is of innocence or guilt.

3. The different ethicality among entrepreneurs operating in the market, in any case, should be ordered, not only on the basis of compliance with requirements concerning the absence of criminal proceedings, but also on the basis of a series of indices and indicators, different for each product sector, that could certify the correctness of entrepreneurs, evaluating through a series of indicators, the ability to distribute welfare to workers, not only and not so much in function of the wages distributed but above all of the safety measures at work beyond the minimum provided by law or the welfare offered. It should also assess the punctuality in the payment of its obligations, the production of positive externalities, any elements set out in the social balance sheet, such as the certified production of ESG, compliance with certified quality procedures, which can assess the resources employed and the integrity of business relations and towards stakeholders in general.

For such a complex system to work and become a tool for development, however, it is necessary to overcome its exclusively punitive use, which is the result of a justicialist vision that is not oriented towards development and healthy competition between companies, and to ensure that high ethical ratings can be linked to rewarding instruments, such as tax concessions, credit guarantees, preferentiality, ceteris paribus in the awarding of public contracts or, in any case, reduction of bureaucratic formalities, even access to simplified bankruptcy procedures and perhaps reparative instruments that decriminalise, for the entrepreneur who, after years of correct behaviour certified by high ratings, finds himself facing a business crisis or a state of insolvency, even for gross negligence, but without predatory intent. An ethical system is one that creates wealth and trust for the whole community and preserves common value. But continuous cooperation is necessary: on the one hand, between enforcement institutions, judicial bodies and territorial public institutions, with a view to horizontal subsidiarity, and on the other hand, employer, professional and trade union associations. Representatives of one and the other should collaborate systematically, in order to modernise the scoring mechanisms and indicate to those who govern the possible rewarding elements for those who invest in the correctness of their enterprise, so that the whole community does not have to bear the burden of ethically incorrect behaviour.

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