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L’Oréal: How ethics drive performance and reputation

On Tuesday, November 14, 2017, the French Chamber of Commerce and Industry welcomed Emmanuel Lulin, Senior Vice President & Chief Ethics Officer at L'Oréal, for a breakfast seminar. Emmanuel gave a presentation on the crucial importance of ethics in today’s businesses, giving as an example his experience in the L’Oréal group.

The international business landscape in the 2010s is a very different world than in the years before and the question of ethics keeps on getting bigger. Ethics is the application of ethical principles to the running of businesses and applies to discretionary decisions and behaviors. Business ethic relates to corporate and individual behaviors and can be resumed by two questions: Do I have the right to do it? Is it the right thing to do?

According to Emmanuel, ethics is a big component of L’Oréal and can be summed up in four words: integrity, respect, courage and transparency.

Surveys and communication have proved the importance of a reputable company for individuals. Trust is becoming a currency and Emmanuel explained how a number of young people nowadays are willing to sacrifice benefits for an ethical company they can trust. Although some businesses driven by the pursuit of profits are not taking this aspect into account yet, for Emmanuel, trust will become in the future a more and more measured currency to value the worth of a company.

As new markets open with the possibility for international companies to reach more than a billion of customers, the question is simple, yet difficult to tackle: how does a business reach those markets, sometimes challenged by crucial human right and corruption issues, without giving up on one’s ethics and reputation?

Contrary to popular belief, ethics in businesses can be a driving force for change, and caring about ethical issues does not mean missing opportunities. Emmanuel detailed L’Oréal’s program to tackle challenges in markets the group wants to invest in. The company has a dedicated team working on issues within and outside the group. The emphasis is put on the trust the employees need to have towards the Group, to be able to understand ethical issues, to communicate their concerns and to react appropriately.

To conclude, Emmanuel resumed the 7 building blocks of a culture of integrity according to the L’Oréal Group:  

  1. Comfort of speaking;
  2. Organizational justice;
  3. Openness of communication;
  4. Clarity of what is expected;
  5. Strong “tone-at-the-top”;
  6. Leadership from direct managers;
  7. Trust in colleagues.
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