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Almost half the companies on the UK’s FTSE 350 index do not have a publicly available code of ethics, fuelling concern that staff will not feel safe sounding the alarm over misconduct.
The number of companies that publish their ethics codes is significantly lower in the mid-cap FTSE 250 index than the blue-chip FTSE 100, according to research published on Monday by the Institute of Business Ethics, which advises businesses on good practice.
The ability of employees to speak up when they see or experience misconduct in the workplace is in the spotlight after the CBI business lobby group was forced to suspend operations following reports by The Guardian newspaper of a number of allegations, including sexual harassment and rape, by former staff.
“There is . . . a worrying number of FTSE 250 organisations, which are among the country’s biggest businesses, without a publicly available code of ethics,” said Ian Peters, IBE director. Businesses without written codes “risk the loyalty and support of both staff and customers”, he added.
UK companies have previously faced warnings from the Chartered Institute of Internal Auditors of a “post-Covid organisational culture crisis”.
Only 40 per cent of FTSE 250 companies have a publicly accessible code of ethics compared with 90 per cent in the FTSE 100.
The lower rate of publication by mid-cap companies is in line with other areas of governance, where directors and auditors report that the UK’s biggest listed companies are more likely to voluntarily adopt best practice in processes such as internal controls and reporting of non-financial metrics.
The research also raised concerns about the quality of some of the codes, with the institute grading only 57 per cent of the documents as “good”.
It highlighted that only half of FTSE 100 businesses give publicly accessible written assurances that staff will not face retaliation if they report concerns about unethical behaviour, with just over one in five FTSE 250 companies giving a similar guarantee.
Despite this, the report found improvements in the quantity and quality of codes of ethics published by businesses.
The number of FTSE 100 companies with a publicly available code increased from 81 in 2021 to 90 this year, while the number assessed as being of a good standard rose from 46 to 57. Codes updated in the past three years were more likely to be rated as being up to scratch, the institute said.
Setting and maintaining an acceptable culture was much more likely, Peters said, when “firms take the trouble to get the right ethical framework in place and to keep checking that it’s working”.