Ethical due diligence: The new recruitment tool for HR

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Assessing potential and current staff in terms of their cultural fit can be invaluable in establishing an ethical culture

Despite the attention that has been paid to due diligence in the past few years, businesses may still be coming up short. We all know that it is good practice to take precautions that decrease the risk of committing an offence. However, there is still room for improvement, particularly when it comes to applying ethical values and standards to corporate behaviours and internal controls. This is where the idea of ethical due diligence (EDD) comes into play – a concept that can bring tangible benefits to the recruitment process.

At its core EDD involves assessing potential employees in terms of their fit with the ethical culture and values of a company. Going one step further, it uses ethical performance assessments when considering candidates for career development and promotion. Essentially, it provides HR departments with a structured way of ensuring that their teams, both old and new, will help their company thrive. This can be vital in establishing an ethical culture in the workplace.

So how do you successfully integrate EDD?

First, it’s important to identify exactly what values and ethical profiles you’re looking to promote. Recruiters should ask themselves questions before interviewing candidates such as: what values are we looking for (e.g. trustworthiness, transparency, openness, integrity), what knowledge is expected from the candidate regarding the ethical challenges in the sector, and what experiences, skills or sensitivities to ethical issues should they be able to demonstrate?

Once this has been established the hiring manager needs to work with the HR department to identify how ethical characteristics might be woven into the recruitment process.

During interviews there are various useful tools to help integrate ethical assessment. For example, a discussion of scenarios to provide insight into the candidate’s ethical approach and reasoning process can prove particularly useful. Plus, make sure the candidate has done their homework, and find out how well they understand your company’s core values.

When a candidate appears to fit the role EDD will continue to help in the pre-offer screening process. It’s often thought of as an onerous task, but treating references, social media screening and qualification checks (among others) as a way of furthering your company’s corporate culture, rather than merely a box-ticking exercise, further adds to its value.

It doesn’t stop once a colleague starts work either. Utilising performance reviews to check that ethical values are being maintained is essential in making sure your corporate culture flourishes.

At the Chartered Institute of Management Accountants (CIMA), we and our chartered global management accountants are committed to upholding the highest ethical and professional standards. That being said, ethics clearly matter across all aspects of business and are not limited to accountancy. We call on all HR departments to tap into EDD to create more value for their businesses. It’s a simple process, but one with rich rewards.

Tanya Barman is head of ethics at CIMA

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