How to embed good ethics in your organisation

Posted on 16 Jul 2023

By Adele Stowe-Lindner

ICDA team photo202305 DAY2 CIC9 016
Members of the Institute of the Community Directors Australia team.

Agreeing to ICDA’s code of ethics is a requirement of membership. That’s deliberate. We’re proud to be an ethical organisation.

ICDA general manager Adele Stowe-Lindner

Ethical governance issues are common. Here’s a snap selection: Robodebt, PwC, “Sandpapergate”, “Me Too”, Crown Resorts and Star casinos, pork barrelling, Hillsong, banking misconduct, aged care failures, institutional child sexual abuse, and the mistreatment of people with disability.

Ethics are in the spotlight, and what’s more, not-for-profits and charities are held to a higher standard of ethical behaviour than most organisations.

That’s as it should be. We’re here for good purposes after all. Yet ethical action can be challenging.

Making tough decisions is a core aspect of the job description for board and organisational leaders. Many of those tough decisions are particularly hard because of the loss that can occur if you choose the wrong path as a board.

The trouble is that the stickiest issues are those that might lead to losses whatever you do. You are asked to choose between two difficult and undesirable situations. As they say, do you want to be popular or do you want to be right? Even navigating what “right” is can send us spinning.

Take ethical fundraising, for example. If a small school without substantial social capital to help it build a new playground or buy kitchen garden equipment is offered funding from an organisation that makes money from gambling, the board might decide not to accept the funds because the proceeds of gambling may be seen as inappropriate for a children’s organisation. On the other hand, if the school doesn’t accept the funds, the children will miss out on having a kitchen garden, an upgraded playground etc.

Neither answer is comfortable but someone needs to make a decision, and this falls to the leadership.

This type of example is where an ethical fundraising policy can come in useful to define boundaries for the organisation which stops crisis meetings having to take place each time the board wishes to fundraise.

At our Communities in Control conference, we heard from Ethicist Simon Longstaff about how we might seek to hold two conflicting ideas in our minds at the same time, acknowledging there might be truth in both. This can help with navigating these sticky choices in the boardroom, and communicating the choices we make back to our community in an empathetic way.

Joining us means agreeing to our ethical approach

One of the many benefits of ICDA membership is that members are eligible for Responsible Person status with the Australian Taxation Office (ATO). This eligibility is triggered when members agree to follow ICDA's code of ethics.

Responsible Person status has long been a challenging and costly hurdle for community organisations seeking endorsement for deductible gift recipient (DGR) status with the ATO.

We don't think this is fair.

Historically, organisations have been forced to recruit board members based on their Responsible Person status, rather than their skills and experiences. This is bad for organisations and bad for communities.

Now that ICDA membership is free, organisations will not be faced with this trade-off.

As well as enabling board members to qualify for Responsible Person status with the ATO, ICDA membership requires board members to comply with a Code of Ethics, which raises the ethical standards and integrity of the entire not-for-profit sector.

ICDA continues to enable and support the implementation of high ethical standards in the complex decision-making that every not-for-profit board faces. Membership also enables access to our free Policy Bank and more than 50 training sessions each year.

Click here to join ICDA, free.

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