Enforcing ethics drives good firms

Ihave always been convinced that corporate ethicality will pay off in more sales longer term. So, I am still struggling to analyse the news that Volkswagen car sales are rising again globally following the emissions scandal affecting some diesel engines. Sales of its VW models rose 24 per cent in the US in December, and while its market is shrinking in Europe, tax cuts in China are helping to keep business buoyant there too.

The company poured money into discounts following the episode, so one has to question received wisdom from polls, saying consumers will pay more for goods and services from squeaky clean companies.

Maybe consumers are also happy to forget a one-off event after a period of time, if there is a financial benefit to be had. Alternatively, maybe they are not so lastingly critical of executive misdemeanors if their customer sales experience is still good, and the essential wrong is righted. VW has taken a massive financial hit after all.

That’s good news for companies, but the drive to improve customer service goes on.

This week, Amanda Cropp (p7) lifts the lid on the growing ranks of mystery shoppers being hired by companies to find out if their messages are being played out on the shop floor.

It is gratifying that shops, stores, banks and other institutions want ‘‘real’’ feedback about the customer experience, but one hopes it is used constructively and not to bully staff who may not have enjoyed meaningful and continuing training.

Dealing with the public is a difficult thing to get right all the time, and I admire those people who have the skills and tenacity to be on the frontline every hour of the day.

Given what happens to brands at big business level however, it perhaps would be useful to devise a way of testing executive ethics and commitment to customer service.

Would there be space for a ‘‘mystery’’ independent board director - a fanciful notion perhaps. But it’s a lesson in the importance of the proper recognition of fiduciary duties.