20.5 C

Latest Posts

Let’s get ethical

Ethics who needs them?

Back in 2013 Bryony McCabe of the Superyacht Report wrote that concerns over ethics were deterring potential owners from entering the industry.
Her article highlighted a concern that money was disappearing into back pockets, in the worst-case scenario; in the best case, there was a serious conflict of interest.
For example, when certain people have the power to decide which refit yard a yacht goes
to, or which paint company will get the contract, there is clearly a potential issue of preference. Someone with money to invest in the industry but little knowledge about how operations are  managed might be very nervous about coming into the market.
Back in 2013 ethics became the cause celebre du jour. Where are we, ethically speaking, five years on?

Ethics for dummies

Perhaps we should first examine what ethics are and if there is any moralizing from the pulpit involved.
Firstly,  ethics and morals do not equate. They are closely related, first cousins perhaps, but not synonymous. Morality occupies different philosophical headspace.
Ethics are concerned with identifying universal principles such as dignity, honesty, transparency and dignity as the bedrock of social and economical activity. Morality concentrates more on what is inherently right and what is wrong. For example, adultery is considered immoral, a breach of a society‘s moral code. From an ethical standpoint, adultery is neither right nor wrong per se but extramarital nookie does probably violate universal principles of honesty and loyalty.
Ethics started with the ancient Greeks. Plato, Socrates and a  whole posse of ancient philosophers wrote on ethics. The purpose of defining the principles of ethics was to create a basis from which laws could evolve and thereby curtail abuse of power. In the medieval ages, a romantic ethical code called chivalry was imposed on the class of knights in order that they may aspire to act more than just a bunch of paid thugs operating at the behest of a powerful landowner. They had to aspire to some higher purpose.
Ethics are generally considered to be part of the human philosophical system rather than divine edicts.

Mission control

In 1980 onwards most companies had a mission statement which was usually an anodyne set of commitments to customer service and excellence. These mission statements did not constitute a code of ethics but did have an aspirational quality of creating a better working environment. Mission statements are now seen as so last century. Companies nowadays prefer to talk about objectives.
Modern law refers to its own legal code or precedents and ethics have little sway on a judge or jury. In fact, juries are often instructed not to consider ethical principles but consider the facts as they relate to the law.
Ethics have today gone awol. Thrown overboard. Politics is an ethically cleansed zone.
Let us forget ancient greek philosophers or medieval codes of chivalry. What do ethics mean today?
A modern code of ethics is a guide of principles crafted to guide professionals on how to conduct business honestly and with integrity. A code of ethics document should identify the core values of the business or organization, how professionals are supposed to manage problems, and the standards to which the professional is held accountable both internally and externally.

Understanding a Code of Business Ethics

Business ethics refers to how ethical principles shape a business’s operations. Common issues that fall under the umbrella of business ethics include employment relations, discrimination, environmental issues, emoluments, bribery, insider trading, and social responsibility. While many laws exist to set basic ethical standards within the business community, it is largely dependent upon a business’s leadership to develop a code of ethics.
Most businesses and trade organizations have a code of ethics that their employees or members should adhere to. Breaches of the code of ethics can result in discipline or even dismissal.
A code of ethics is considered important because it establishes the rules for behavior and provides the groundwork for a preemptive warning.
In a cross-sector scenario, well-defined code of ethics generates confidence in clients and enhances the professional reputation of that sector. An enforcement methodology sends a message that universal compliance is expected.
In some industries, including banking, specific laws govern business conduct. In others, a code of ethics may be voluntarily adopted.

Embed from Getty Images


Compliance-Based Code of Ethics

For all businesses, domestic and international laws regulate issues such as hiring and safety standards. Some industries follow conventions that are ratified by each nation-state. Compliance-based codes of ethics do not set out to replace conventions but rather establish guidelines for Conduct and also determine penalties for violations. Here ethical judgments are closer to establishing moral behavior rather than what is legally permissible. It means following a code of acceptable behavior as opposed to getting away with what you can.
Some business and industries call for a compliance officer to be  tasked with keeping up the ethical code up to date on changes in law and convention while monitoring conduct on an individual and organizational level
This type of code of ethics is based on clear-cut rules.

Value-based code of ethics

A value-based code of ethics addresses a company’s core value system. It may
define standards of responsible conduct in regards to the greater good and the environment. Value-based ethical codes require a greater degree of self-regulation than compliance-based codes but breaches are harder to discipline.

Code of Ethics Among Professionals

Financial advisers registered with the Securities and Exchange Commission or a state regulator are bound by a code of ethics known as a fiduciary duty. This is both a legal requirement and an article of good faith that requires them to act in the best interest of their clients.
Certified public accountants, who are not typically considered to be a fiduciary to their clients, still are expected to follow similar ethical standards, such as integrity, objectivity, truthfulness, and avoidance of conflict of interest

Why does the super industry need a code of ethics to cover the whole sector?

Many organizations in the superyacht business have their own codes-  for example, the International Superyacht Society. Or they have ‘objectives’ such as the LYBA and MYBA. Individual companies such as the Italian Sea Group put their code of ethics in a prominent position on their website. Likewise the Superyacht Society, the PYA, the AYSS.
So why should the superyacht industry concern itself with ethics? After all, there are well-established conventions. There is maritime law and the IMO to bring good governance to the industry. Would not a set of ethics be overkill and may even cause confusion in applying legal structures for yacht management? Won’t the various international conventions do?
Consider this: a superyacht is sold. A refund of the annual hull insurance is paid to the yacht management. Due to an ‘oversight,’ the refund is not paid into the yacht’s account but into the yacht management account. The accounts are closed and the final settlement is made. The oversight is noticed, but nothing is done to rectify the error. The refund has been trousered by the yacht manager.
What ethical code has the yacht manager violated? There was no original intent to deceive.
In the absence of a code of ethics, none.

It’s all about public relations, stupid.

Doubts raised in The Superyacht Report article in 2013 are still valid. There are huge sums of money involved in the maintenance of a superyacht. If a potential owner feels that there may be some shady business going on n the industry, this can act as a deterrent.
There are other pressing matters that call for establishing a pan-industry code of ethics:  the rise of populism, heightened awareness of the poor condition of the oceans, and the end of the love affair between the media and the superyacht industry.
To quote the Roman poet Catullus: I love and I hate in equal measure. The press is starting to focus on the excesses of superyacht life after many years of being easily impressed by and infatuated with the superstar attraction of fabulous superyachts.
The global superyacht fleet is using a shared asset that is suffering from severe deterioration. Although superyachts generate a fraction of the world’s marine pollution – the global tanker fleet pollutes far far more,  superyachts are higher profile assets and more vulnerable to the changing winds of public option.  A populist tax law such as the Italian supertax can cripple an industry – as happened in Sardinia until the law was repealed. There are grumblings that the EU might prohibit large yachts from anchoring off poplar resorts.
There is even a movement that calls for extreme wealth to be curtailed, targeting superyachts that consumes  500 litres of diesel an hour just idling. The Ultras are seen to be trashing the world.

‘When the rich ignore the concerns of the poor, they end up with their backs to the wall’

 Superyachts attract good press and bad press. Tales of superyachts behaving badly make for a good read. Add the media’s favorite bogyman such as Phillip Green who still owns the Lionheart while his ex-employees lost their pensions, superyachts risk becoming symbols of extravagant spending and privilege. Altruism is not a word associated with the superyacht industry.
In our article on superyachts in the media, we warn that the global media could quite easily turn on the superyacht industry. Which would deter new entrants as it becomes bad PR for the owner’s business and defeats the point of having a big old yacht as a get away from it all. Who wants an albatross around your neck?
Ethics ultimately bind companies together.  A shared code of ethics also presents an opportunity for good PR for the industry. To maximize this PR opportunity some updating needs to be done as to what constitutes ethics. No more bland aspiration fluff. There has to be a serious commitment to combating ocean pollution. This should be the reason d’etre of the superyacht industry. Every charter, every voyage should have an ethical content that covers the preservation of the oceans. Make ethics great again.
The time for aspiring to greater things is over. This is the time for ethically based action. A pre-emptive strike against any negative publicity. The super industry will no longer be associated with the superrich drinking champagne and cavorting with topless prostitutes and all the nonsense that it is seeming to generate in the press and media recently, as a few bad cases can be easily sensationalized. Superyachts will be seen as a force for good, beneficial to the planet.

Embed from Getty Images

New entrants will want to be associated with the positive press. It is good PR for their companies as well.
Perhaps every charter contributes a percentage to the Blue Marine Foundation? You can never be too good.
Why trash the oceans when you can save them?


Latest Posts

Don't Miss

Stay in touch

To be updated with all the latest news, offers and special announcements.