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2022-12-31-accounts

Registered Charity Number: 1180741 and Company Number 11594672

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR

THE YEAR ENDED 31 December 2022

About the Institute of Business Ethics

The Institute of Business Ethics (IBE) is a company limited by guarantee; it does not have share capital and is a registered charity, established in 1986. It is a not-for-profit organisation funded primarily by corporate, associate, and individual supporters.

The directors, who are IBE Trustees and constitute the members of the Charity, present the Directors’ and Trustees’ Report and the audited financial Statements for the year ended 31 December 2022.

The Board of Trustees is, for company law purposes, also the Board of Directors and has ultimate responsibility for the Charity’s activities. It exercises its powers through the Director.

The charitable aim of the IBE is to “to advance public education in business ethics”, through leading the dissemination of knowledge and good practice.

To this end, the Institute assists organisations in building and strengthening their ethical culture, engaging with organisations in a wide variety of sectors, to discuss important ethical issues, and use their practical experience and knowledge to better establish and disseminate improved standards and best practice.

IBE Purpose:

To champion the highest standards of ethical behaviour in business

Public Benefit

The Board of Trustees has due regard of the Charities Act 2011 and the Charity Commission guidance on public benefit, in particular the requirement that public benefit can no longer be presumed but must be demonstrated, with specific attention to ensuring our services benefit society to advance and champion the highest standards of ethical behavior. This aligns with our stated charitable aims and objectives.

The IBE continues to operate as a not-for-profit organisation, ensuring that the funds we receive from our Supporters are put to best use through education, thought leadership and debate about business ethics.

We are substantially dependent on our Supporters for our income and for the public benefit of our work and are enormously grateful for their continued support.

Strategy

In 2020 the IBE’s Board of Trustees approved a 5-year strategic plan which sets the tone and foundations for a new strategy, establishing a base for future growth. The strategy redefined our objectives, setting new targets, reinvigorating our message, and developing our programme to meet the new challenges ahead.

The strategic objectives are:

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REPORT OF THE TRUSTEES

Message from the Chair

Even a cursory glance at the stories in the news reminds us of just how many organisations are facing ethical lapses. From sexual harassment, discrimination, bullying and other manifestations of toxic workplace cultures; to fraud, bribery and corruption, and insider trading. We would argue that environmental disasters involving negligence or recklessness, are also examples of poor business ethics. Equally, there are no shortages of new topics for ethics practitioners in business to get to grips with, from the ethics of Artificial Intelligence, to how to do corporate advocacy ethically.

The Institute of Business Ethics has been championing ethical business behaviour for almost forty years. Arguably, the need for centres of excellence and practical insights like the IBE has never been greater than in today’s globally connected, 24/7 society where everything is ultimately for the record.

On behalf of the IBE board, I am pleased to share this report of our work during 2022. Like many employers after the pandemic, the Institute had its challenges with staff turnover. Like other charities heavily dependent on corporate funding, the Cost-of-Living Crisis is impacting us. The board is pleased, however, to be able to report a welcome growth in the amount of advisory work accomplished during the year, which offset some fall off in supporters’ donations.

We also raised our profile further, with a number of timely reports like Attitudes of the British Public to Business Ethics 2022 and “Ethics: the missing E in ESG investing?” The latter was the result of a substantial piece of probono work by Annabel Gillard, of our International Advisory Council. We are enormously grateful for Annabel’s leadership of our “Ethics and ESG” work, which is continuing. We also completed our Good Practice Guide on Measuring Ethical Culture, which was published in January 2023. This was the result of intensive work by former staff colleagues Guen Dondé and Mark Chambers and finalised by Rachael Saunders and Chris Cowton.

Research and thought leadership are what guides our work, and improved engagement has fueled the increase in requests for our advisory services. The results of which not only aids and guides our supporters in ethical behaviour, but also enables us to generate more income, allowing us to do more. We aim to intensify this “virtuous circle” and further diversify our sources of funding. In 2023, we will be producing “Principles” for the effective running of a specialist Ethics function and in particular, how company boards can ensure effective oversight of ethical culture and behaviours.

As more and more business leaders recognise that businesses have a critical role in finding profitable solutions to the problems of people and planet and not to profit from causing harm; and as younger employees, in particular, want to work for employers with whose values they can empathise and whose purpose they can relate to, the opportunities for promoting ethical business behaviour have never been greater. During 2023, we want to tap into the insights and ideas of future business leaders, with a “Next Generation” project on how younger people think of business ethics and what goes into making ethical business behaviours. As a small organisation with limited resources, the Institute needs to become ever smarter at building alliances and collaborating with like-minded networks, to get our core messages across to many more businesspeople both in the UK and internationally.

Just what are our core messages? Our fundamental belief is that ultimately, it is the responsibility of boards and senior management teams to set the tone: how they want employees to treat their co-workers, customers, suppliers, competitors, and neighbours. This is best expressed in a Code of Ethics, which must be regularly reviewed and updated. Codes alone, however, can be a false insurance. They have to be brought to life, through ongoing socialisation. New employees need to be inducted in corporate values and how they are expected to behave. Leaders at all levels need to “walk the talk” and regularly talk about desired behaviours and dealing with ethical dilemmas. Having a simple tool for taking ethical decisions can help – as long as employees know about this and understand how to use it.

Ethical behaviour should be at the heart of the desired and the actual culture of a business – whatever the size of that business. Crucially, they need to reinforce and be reinforced by corporate purpose and values.

If these messages resonate, please join with the Institute of Business Ethics in promoting them more widely.

My thanks, as ever, to the small, but very hard-working and dedicated staff team and to fellow trustees and our other volunteers – and, above all to our supporters – without you, the IBE would not exist!

David Grayson CBE July 2023

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Activities of the Institute of Business Ethics

The Board of Trustees present their report and the audited financial statements for the year ended 31 December 2022.

The IBE provides specialist advisory and training services, and delivers an extensive programme of research, surveys, and publications to inform business and the public in relation to business ethics. Much information is made freely available through our website, but it is our Supporters that have the most influence on the IBE’s priorities and work programmes and, most importantly, they enjoy the significant advantages that come from participation in our unique Supporter networks.

Engagement with our supporters

The IBE’s work is funded by corporate and individual supporters. Through their donations, the Institute is able to realise its purpose.

Our supporters join a community of individuals and organisations committed to promoting the highest standards of business conduct based on ethical values. Our work is informed and shaped by engagement with our supporters and the insight this provides us. Our ongoing programme of engagement meetings has proved successful and informative for both the IBE and its supporters and has led to further interest and commissioned work.

It is important to our mission that we achieve a broad focus. To achieve this, we seek to engage with those at board and senior leadership level, as well as with the organisations’ ethics and compliance practitioners, thereby increasing our effectiveness in creating a positive influence throughout the corporate world.

----- Start of picture text -----
IBE Corporate
Supporters- 2022
Large
39%
Medium
53%
Small
8%
----- End of picture text -----

Through our Supporter-only networks, roundtables, and workshops:

Supporters’ Forum

Our annual Supporters’ Forum is an opportunity for IBE supporters to meet and hear about the IBE’s work and provide input to our plans for the forthcoming year. This annual meeting is key to helping the IBE ensure that it is responsive to the latest developments in business ethics and thereby meeting the needs of our Supporters.

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Business Ethics Network

Key to engagement with our supporters is our Business Ethics Network (BEN). It provides a confidential forum for the sharing of both good practice and any challenges faced in implementing an effective ethics programme. BEN members also contribute significantly to the IBE’s work programme by informing and influencing our priorities for future discussions and research. BEN meetings take place on a monthly basis.

Ethics Leaders Roundtables

Since its inception in 2021, the ethics leaders roundtable meetings have had significant impact on the work of the IBE. Specific to the leaders of ethics functions to exchange views on the latest developments with a strategic focus, these small group discussions facilitate a greater depth of exchange.

Sector Groups

In order to address concerns relevant to specific areas of business, we host a number of sector groups. These include Professional Bodies (ProfBEN), Defence Practitioners (DPG), and the Utilities Sector (USG). These groups are for those responsible for ethics within their organisation to meet and explore specific ethical challenges in their sector, with the IBE providing research and producing briefings for discussion.

Two further groups comprise the Bank Culture Chairs Group (BCCG) being the NonExecutive Chairs of the committees looking at ethics and culture of six leading UK banks; and Professionals against Corruption (PaC), a group of professional services firms from the legal, accountancy and real estate sectors, committed to work together on the antimoney laundering and anti-corruption agenda.

The IBE provides the independent chair and secretariat for BCCG, and the secretariat and advisory services to support PaC.

Advisory Services and Training

As an independent not-for-profit organisation, our unique and pragmatic perspective allows us to work with organisations as a critical friend. Our advisory services are a means of ensuring we remain both current in our understanding of the shifts in the nature of ethical challenges in fastevolving workplaces, and as a means of sharing expertise and good practice with others.

In addition, advisory work is an important means of diversifying our income sources. Assignments undertaken during 2022 included a multinational automobile organisation, international auditors, and a multinational oil and gas company.

Training

The IBE has a long tradition and a strong belief in training. We provide both public training courses and workshops and corporate in-house training, offering bespoke training sessions to all levels of staff, from boards and senior management to operational personnel.

All our various training services have been adjusted to provide them online and faceto-face training where circumstances have allowed.

Products

We provide a range of practical and easy to use toolkits which can be customised to the needs of the individual organisation. These include:

Say No Toolkit

A web-based product and app decision-making tool, designed to help organisations support their employees to make the right decision when faced with difficult situations such as whether to accept a gift or hospitality, a facilitation payment, or when faced with a conflict of interest.

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Speak Up Toolkit

This app helps employees prepare themselves to raise a concern at work. It answers questions about the entire process – from noticing a problem and having a conversation through to what to expect if you call a Speak Up helpline or if your concern is investigated.

Business Ethics Toolkit

This toolkit provides a guide for business owners, chief executives or managers seeking to make their ethical values explicit, and to protect their business against ethical lapses. It suggests a simple, affordable approach to design an ethics framework, and it is intended to be particularly useful to small and medium sized businesses, start-ups, and growth companies.

Research & Thought leadership

Our research provides the foundation for our thought-leadership and our advisory services. We focus on topics with practical application and seek to support business through the promotion of the latest solutions and ideas. We have moved to publishing all our work on our website, which includes Attitudes of the British Public to Business Ethics, published in January and June, Business Ethics in the news 2022 and Ethics: the missing E in ESG investing?

Website

Having extensively revamped and made it more user-friendly and easier to navigate, we have continued to feature weekly blogs where IBE staff, trustees, supporters and invited guests contribute to topical ethical debates. These blogs engender comment and debate on ethical culture and reviews of ethics-related books.

Events

IBE events are typically provided free of charge. Most discussions and publication launches are open to the public and are advertised on our website. Alongside these, the IBE runs a series of private discussions and workshops available to corporate supporters only.

All our events were online, with recordings of our webinars made available as a free resource on our website and via YouTube to further the Institute’s public and geographic outreach.

During 2022 we hosted:

Business Ethics in Education

A core part of IBE’s mission is the education of the next generation of business leaders in business schools and universities, sensitising them to the importance of ethical business practice and ethical issues.

Advocacy

The IBE provides advice to policy makers in government, supports corporate governance consultations and reviews, and is an advocate for ethical business practice.

The Trustees, Directors and staff make presentations and speak at conferences nationally and internationally advocating good business practice and offer the media and others an informed opinion and advice on current issues and good practice.

We also support the following groups:

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We also contributed to the Anthropy initiative which resulted in a major conference at the Eden Project in November 2022.

Structure, Governance and Management

The Institute of Business Ethics is an incorporated charity, re-registered with the Charity Commission on 1 April 2019, as a Company limited by Guarantee. It is governed by a Memorandum and Articles, dated September 2018.

The financial statements have been prepared in accordance with the accounting policies set out in Note 1 to the financial statements and comply with the charity's Articles, applicable law, and the Statement of Recommended Practice - Accounting and Reporting by Charities: SORP applicable to charities preparing their accounts in accordance with FRS 102.

Board of Trustees

The Board of Trustees are responsible for the overall strategic direction of the Institute, ensuring that the IBE abides by its charitable aim, works within the law, and delivers its mission effectively. The Trustees are led by the Chair of the board.

Trustees serve a maximum of three three-year terms and meet at least quarterly.

Trustee vacancies are advertised when there is a particular skills gap and when a term of office comes to an end within the overall membership of the Board of Trustees. New Trustee positions are advertised, and applicants are interviewed by the Nominations Committee. Appointments are ratified by the whole Trustee body. Trustee induction is held at the start of the term and training is provided, as and when identified by the Chair and/or other trustees. All Trustees give their time voluntarily and receive no benefits from the charity. Any expenses reclaimed from the charity are set out in note 5 to the accounts.

Decision-making

The Trustees reserve the following decisions to themselves:

The Trustees delegate the following decisions to the Director:

International Advisory Council

The Advisory Council members, who include the President and the Vice Presidents, provide the IBE with advice and guidance on its work programme, thought leadership and strategy. They are invited to attend bi-annual meetings and receive copies of the Director’s reports and the IBE’s

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events programmes and publications. In addition, The President and the Vice Presidents receive copies of the Trustees’ meeting minutes. The Advisory Council does not form part of the Institute’s formal governance structure.

Funding

The IBE receives financial support from corporate supporters, individuals, associations, and trusts. The Institute also generates income from the provision of advisory services, training courses, project funding, the sale of publications and products and events.

Change to charitable Activities for 2022

In 2022, a new structure for allocating costs was adopted, with more focus on identifying activities undertaken by the charity.

Sources of income

Through their donations, IBE supporters help to promote ethical business practice. They are encouraged to engage with us via events, publications, advice, and other services that the IBE provides. Diversification of cash funds and investments is regularly reviewed in order to reduce exposure of financial risk to any single institution.

----- Start of picture text -----
Sources of Income- 2022
600,000
500,000
400,000
300,000
200,000
100,000
0
----- End of picture text -----

Reserves & going concern

The income of the Institute of Business Ethics depends mainly on donations from companies, which can fluctuate from year to year. Any reduction in these can have a considerable impact on income. In addition, the Institute initiates and incurs costs for projects that may or may not generate equivalent revenue.

The Trustees regularly review the organisation’s reserves policy and following board approval, the following policy has been put in place based on the following principles:

These two provide our normal operational reserves.

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When we receive income subject to specific stipulations which is unspent at the end of the financial year, the balance will be carried forward as restricted reserves, signaling they are not available for general purposes.

On working capital, a review shows we need a minimum of some £60,000 to cover routine operations for a 3-month period. This can be expected to rise if the trend to slow payment by supporters accelerates or if the balance of our work shifts away from annual donations, for example towards advisory services paid on completion. Based on 2022 numbers, three months of fixed costs (salaries and essentials) equates to £146,004.

Based on these calculations, the Board decided that for 2022 we should hold a minimum of £300,000 in reserves. The IBE met this policy during the reporting period and continues to do so. However, the Board and management continue to monitor closely the level of reserves alongside income and expenditure.

As of 31 December 2022, total reserves were £489,043, of which unrestricted free reserves were £453,503. Note 15b of the accompanying accounts explains our future plans to disburse the restricted and designated funds held in reserve.

In reviewing our business and financial plans for the coming year, the trustees took account of possible outcomes should our supporter renewal rates decline, and the flexibility we have within our cost budget to offset any income shortfall.

In July 2023 trustees discussed the specific areas around our viability as a going concern, considering the Future Funding paper, and any anticipated risk to our operations. The trustees believe the charity will have sufficient resources to meet its liabilities as they fall due. As such, they remain satisfied that the charity can continue operating for the foreseeable future and these accounts have been prepared on a going concern basis.

Investment policy

Investments are stated at market value. The Trustees consider social, ethical, and environmental considerations when deciding where the Institute’s funds are invested.

Remuneration policy

IBE is committed to ensuring that we pay our staff fairly, and in a way that ensures we attract and retain the right skills to have the greatest impact in delivering our charitable objectives.

Following recommendations from the Remuneration Committee (established in 2020), the Board of Trustees approve the annual percentage increase in the payroll for all staff in November, for the following salary year beginning in January, considering RPI as of 30 September of the current year. This also includes any non-consolidated pay awards and staff salary increases outside of the annual review process as recommended from time to time by the Director.

The appropriateness and relevance of the remuneration policy is reviewed annually by the Director, who is entrusted to ensure that the review includes reference to comparisons with other relevant organization’s, ensuring IBE remains sensitive to the broader issues e.g., pay and employment conditions, meets all national pay standards, and provides all paid staff with a living wage. Salaries are benchmarked against similar roles within like-minded charities, the Charity Salary Survey, and other comparable roles.

The Director reviews all staff pay levels annually, and new proposals are put to the Board of Trustees for review and approval. The Director is in attendance for the meeting but leaves for any discussion regarding their own remuneration.

Pension policy

The IBE has adhered to the Auto-Enrolment Scheme, all employees are automatically enrolled in the company pension scheme and new employees will be automatically enrolled in the National

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Employment Savings Trust (NEST) in accordance with the company’s obligations under the Pensions Act 2008.

Risk management

The risk register was revised and simplified, with the Director and executive team having identified 8 areas of risk. This was endorsed by the Board and is now reviewed at each Board meeting, with an ongoing commitment to managing those risks.

Governance Failure to govern the institute in accordance with its
objectives and external regulatoryrequirements
People Failure to ensure right skills and resources to deliver
objectives
Relevance Failure to maintain relevance to business leading to loss of
support and income
Profile Failure to maintain profile and promote the IBE
Finance Failure to maintain effective financial controls leads to
financial loss
Compliance Failure to comply with all legal and regulatory obligations
IT Failure to maintain / upgrade IT systems and security
External Failure to anticipate crisis

IBE Code of Ethics

The IBE has a Code of Ethics for all staff and Trustees, which is published on the website. It was reviewed and updated in 2021, next review scheduled for 2024.

Our values: We are

Respectful – we respect the diversity of thought and perspectives offered by others. We are inclusive and treat others as they would want to be treated (consistent with ethical values).

Collaborative – we work as one team, empowering and supporting each other to achieve high quality results.

Trustworthy – we act with integrity, building strong relationships based on openness and honesty.

Courageous – we stand up for what’s right, take managed risks and learn from experience when things go wrong.

Entrepreneurial – we are dynamic and innovative, seeking to achieve high performance, impact and growth to further the IBE’s purpose.

Customer Focused – we treat our customers as partners and look to create powerful relationships based on professionalism, relevance, and subject-matter expertise.

In order to mitigate reputation risk and avoid potential conflicts of interest, the Trustees have a Register of Interests of Trustees for internal use. This is completed by new Trustees on appointment and reviewed annually.

Annual review of board effectiveness

The Chairman conducts 1:1 interviews with each trustee at the end of the year, collated feedback and a paper is presented to the first board meeting of the following year.

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Statement of Trustees’ Responsibilities

The board of trustees, who are also directors of Institute of Business Ethics for the purposes of company law, are responsible for preparing the trustees’ annual report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustees are aware:

The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Members of the charity guarantee to contribute an amount not exceeding £1 to the assets of the charity in the event of winding up. The total number of such guarantees at Year End was 2022=10. The trustees are members of the charity, but this entitles them only to voting rights. The trustees have no beneficial interest in the charity. The trustees who served during the year, and their pattern of attendance at board meetings, are shown in the table below.

shown in the table below.
Trustee 19 Jan-
additional
meeting		 29-Mar 29-Jul 29-Sep 7-Dec
David Grayson(Chair)
Mike Tuffrey (Treasurer)
Loree Gourley (Vice-Chair) x x x
Ian Dyson x
Cristina Cortes x x
Loren Shuster
Yetunde Hofmann x x
Tim Langton x x
LouiseTerry
Jason Engelbrecht x

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Trustees:

International Advisory Council:

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Auditors

Sayer Vincent were re-appointed as the charity’s auditors during the year and have expressed their willingness to act in that capacity.

The accounts have been prepared in accordance with the special provisions applicable to companies subject to the small companies’ regime. The trustees’ annual report has been approved by the trustees on 5 July 2023 and signed on their behalf by

David Grayson, CBE Chair of Trustees

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Independent auditor’s report

To the members of

Institute of Business Ethics

Opinion

We have audited the financial statements of Institute of Business Ethics (the ‘charitable company’) for the year ended 31 December 2022 which comprise the statement of financial activities, balance sheet, statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on Institute of Business Ethics’ ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other Information

The other information comprises the information included in the trustees’ annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.

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Independent auditor’s report

To the members of

Institute of Business Ethics

If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ annual report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the statement of trustees’ responsibilities set out in the trustees’ annual report, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

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Independent auditor’s report

To the members of

Institute of Business Ethics

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud are set out below.

Capability of the audit in detecting irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

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Independent auditor’s report

To the members of

Institute of Business Ethics

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of noncompliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company's members as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Joanna Pittman (Senior statutory auditor) 14 July 2023 for and on behalf of Sayer Vincent LLP, Statutory Auditor Invicta House, 108-114 Golden Lane, LONDON, EC1Y 0TL

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Institute of Business Ethics

Statement of financial activities (incorporating income and expenditure account)

For the year ended 31 December 2022

Note
Income from:
2
3a
Advisory services
3a
Research
3a
Training & Events
3a
Marketing, Comms & Publs
3a
Supporter Engagement
3a
10
4
Reconciliation of funds:
Total expenditure
Net income / (expenditure) before net
gains on investments
Net income / (expenditure) before other
recognised gains and losses
Gains / (losses) on foreign exchange
Net movement in funds
Total funds brought forward
Total funds carried forward
Net gains on investments
Other
Total income
Expenditure on:
Raising funds
Chaitable activities
Donations and legacies
Charitable activities
Advisory services
Training & Events
Marketing, Comms & Publs		 Unrestricted
£
558,568
173,063
89,347
1,260
6,507		 Restricted
£
-
-
-
-
-		 2022
Total
£
558,568
173,063
89,347
1,260
6,507		 Unrestricted
£
588,376
71,050
85,491
3,210
4,372		 Restricted
£
72,047
-
-
-
-		 2021
Total
£
660,423
71,050
85,491
3,210
4,372
828,745 - 828,745 752,499 72,047 824,546
84,272
161,698
80,393
96,953
189,309
107,842		 -
-
-
-
1,009
-		 84,272
161,698
80,393
96,953
190,318
107,842		 72,253
164,527
73,128
124,818
156,476
129,834		 -
-
-
-
67,625
-		 72,253
164,527
73,128
124,818
224,101
129,834
720,467 1,009 721,476 721,036 67,625 788,661
(3,149)
108,278		 -
(1,009)		 (3,149)
107,269		 (1,143)
31,463		 -
4,422		 (1,143)
35,885
105,129
926		 (1,009)
-		 104,120
926		 30,320
(1,554)		 4,422
-		 34,742
(1,554)
106,055
373,921		 (1,009)
10,076		 105,046
383,997		 28,766
345,155		 4,422
5,654		 33,188
350,809
479,976 9,067 489,043 373,921 10,076 383,997

All of the above results are derived from continuing activities. There were no other recognised gains or losses other than those stated above. All movements in funds are disclosed above. There has been a change in the charitable activities in this year which is reflected in this year's figures and the previous year's accounts.

18

Institute of Business Ethics

Balance sheet

Balance sheet
As at 31 December 2022 Company number 11594672
£
13,135
599,547		 2022
£
7,810
13,267
26,522		 £
38,655
487,351		 2021
£
3,089
26,078
29,671
47,599
441,444		 58,838
325,158
612,682
171,238		 526,006
200,848
26,473
453,503		 43,309
330,611
489,043 383,996
479,976
9,067		 373,920
10,076
383,996

Approved by the trustees on 5 July 2023 and signed on their behalf by

David Grayson, CBE

Chair

19

Institute of Business Ethics

Statement of cash flows

For the year ended 31 December 2022

Cash in hand
Total cash and cash equivalents
Change in cash and cash equivalents due to foreign exchange
Analysis of cash and cash equivalents
Cash and cash equivalents at the end of the period
Depreciation and amortisation
Cash and cash equivalents on transfer of funds / start of period
Change in cash and cash equivalents in the period
Cash flows from operating activities
Net cash used in investing activities
Net cash used in operating activities
Cash flows from investing activities:
Purchase of fixed assets
Net income for the reporting period
(as per the statement of financial activities)
Loss on investments
Decrease / (Increase) in debtors
(Decrease) / Increase in creditors		 £
£
104,120
3,149
14,890
25,520
(29,610)
118,069
(6,799)
(6,799)
111,270
487,351
926
599,547
At 1 January
2022
Cash flows
£
£
487,351
111,270
487,351
111,270
2022		 £
£
104,120
3,149
14,890
25,520
(29,610)
118,069
(6,799)
(6,799)
111,270
487,351
926
599,547
At 1 January
2022
Cash flows
£
£
487,351
111,270
487,351
111,270
2022		 £
£
34,741
1,143
14,760
(5,641)
(20,364)
24,639
-
-
24,639
464,266
(1,554)
487,351
Other
changes
At 31
December
2022
£
£
926
599,547
926
599,547
2021		 £
£
34,741
1,143
14,760
(5,641)
(20,364)
24,639
-
-
24,639
464,266
(1,554)
487,351
Other
changes
At 31
December
2022
£
£
926
599,547
926
599,547
2021
(6,799) -
At 1 January
2022
£
487,351		 Other
changes
£
926
111,270
487,351
926		 24,639
464,266
(1,554)
599,547 487,351
Cash flows
£
111,270		 At 31
December
2022
£
599,547
487,351 111,270 926 599,547

20

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

1 Accounting policies

a) Statutory information

Institute of Business Ethics is a charitable company limited by guarantee and is incorporated in England and Wales on 28 September 2018.

The registered office address and principal place of business is 24 Greencoat Place, London, SW1P 1BE.

b) Basis of preparation

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) - (Charities SORP FRS 102), The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy or note.

The trustees do not consider that there are any sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.

In applying the financial reporting framework, the trustees have made a number of subjective judgements, for example in respect of significant accounting estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The nature of the estimation means the actual outcomes could differ from those estimates. Any significant estimates and judgements affecting these financial statements are detailed within the relevant accounting policy below.

c) Public benefit entity

The charity meets the definition of a public benefit entity under FRS 102.

d) Going concern

The trustees consider that there are no material uncertainties about the charity's ability to continue as a going concern.

e) Income

Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the income have been met, it is probable that the income will be received and that the amount can be measured reliably.

Income received in advance of the provision of a specified service is deferred until the criteria for income recognition are met.

21

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

f) Donations of gifts, services and facilities

Donated professional services and donated facilities are recognised as income when the charity has control over the item or received the service, any conditions associated with the donation have been met, the receipt of economic benefit from the use by the charity of the item is probable and that economic benefit can be measured reliably. In accordance with the Charities SORP (FRS 102), volunteer time is not recognised so refer to the trustees’ annual report for more information about their contribution.

On receipt, donated gifts, professional services and donated facilities are recognised on the basis of the value of the gift to the charity which is the amount the charity would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.

g) Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

h) Expenditure and irrecoverable VAT

Irrecoverable VAT is charged to the accounts in the same proportion as staff costs. In the 2022 accounts, the charge back to accounts was made using the 2021 staff costs profile.

i) Allocation of support and governance costs

Resources expended are allocated to the particular activity where the cost relates directly to that activity. However, the cost of overall direction and administration of each activity, comprising the salary and overhead costs of the central function, is apportioned on the following basis which are an estimate, based on staff time, of the amount attributable to each activity.

Where information about the aims, objectives and projects of the charity is provided to potential beneficiaries, the costs associated with this publicity are allocated to charitable expenditure.

Staff costs Office support
� Cost of raising funds 9% 13%
� Advisory Services 16% 23%
� Research 9% 13%
� Training & Events 9% 13%
� Marketing, Webs & Publications 15% 22%
� Supporter engagement 11% 16%
� Admin, IT and other support costs 31%

22

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

j) Listed investments

Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing

quoted market price. Any change in fair value will be recognised in the statement of financial activities. Investment gains and losses, whether realised or unrealised, are combined and shown in the heading “Net gains/(losses) on investments” in the statement of financial activities. The charity does not acquire put options, derivatives or other complex financial instruments.

k) Operating leases

Rental charges are charged on a straight line basis over the term of the lease. The rental lease ended on 31 July 2022, and IBE staff now work remotely.

l) Debtors

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

m) Cash at bank and in hand

Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. Cash balances exclude any funds held on behalf of service users.

n) Creditors and provisions

Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

o) Financial instruments

The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value. Full details are given in the financial instruments note.

p) Pensions

The charity operates a defined contribution scheme, whereby it will put in a contribution of 5% of an employee's gross salary. Pension contributions are paid monthly in arrears, and can commence once the employee has completed the standard 3 month probationary period. There is no obligation for any employee to join the scheme and the charity has no further obligations once payments have been made.

23

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

q) Tangible fixed assets

Items of equipment are capitalised where the purchase price exceeds £500. Depreciation costs are allocated to activities on the basis of the use of the related assets in those activities. Assets are reviewed for impairment if circumstances indicate their carrying value may exceed their net realisable value and value in use. Major components are treated as a separate asset where they have significantly different patterns of consumption of economic benefits and are depreciated separately over its useful life.

Depreciation is provided at rates calculated to write down the cost of each asset to its estimated residual value over its expected useful life. The depreciation rate in use is 4 years.

r) Intangible assets

The new IBE website, developed in 2020 went live on 13 January 2021. All installation and development costs have been classed as intangible assets. Support costs, website hosting and domain name costs are considered to be normal running costs and will be expensed in the period they are incurred.

Amortization is provided at rates calculated to write down the cost of each asset to its estimated residual value over its expected useful life. The amortization rate in use is 4 years.

2 Income from donations and legacies

Income from donations and legacies
Corporate subscriptions
Individual subscriptions
Ethics @ Work 21 donations - restricted fund		 2022
Total
£
556,518
2,050
-		 2021
Total
£
583,211
5,165
72,047
558,568 660,423

24

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

3a Analysis of expenditure (current period)

Staff costs (Note 5)
Other staff costs
Direct expense
Events - EBEF
PaC expense
Ethics at Work 2021
Office & IT support costs
Professional fees & insurance
Admin, IT and office support
Total expenditure 2022		 Cost of
raising
funds
50,074
-
-
-
-
-
8,092
2,142
60,308
23,964
84,272		 Charitable activities Charitable activities Charitable activities Supporter
Engagement &
Recruitment
£
61,828
-
2,430
-
1,786
-
9,890
2,618
78,552
29,290
107,842		 Admin, IT,
Governance,
Support costs
£
148,473
-
-
-
-
-
27,874
7,377
183,724
(183,724)
-		 2022
£
514,624
960
70,068
19,315
1,786
1,009
89,915
23,799
Advisory
Services
£
100,733
-
168
-
-
-
14,387
3,808
119,096
42,602
161,698		 Research
£
44,011
-
2,183
-
-
-
8,093
2,142
56,429
23,964
80,393		 Training &
Events
£
35,572
-
7,868
19,315
-
-
8,092
2,142
72,989
23,964
96,953		 Marketing,
Comms &
Publications
£
73,933
960
57,419
-
-
1,009
13,487
3,570
150,378
39,940
190,318
721,476
-
721,476

25

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

3b REVISED Analysis of expenditure (prior period)

Staff costs (Note 5)
Direct expense
EBEF event
Ethics at Work 2021
PaC expense
Office & IT support costs
Professional fees & insurance
Admin, IT and office support
Total expenditure 2021		 Cost of
raising funds
46,653
-
-
-
-
5,191
1,399
53,243
19,010
72,253		 Charitable activities Charitable activities Charitable activities Supporter
Engagement
& Recruitment
£
83,802
1,417
-
-
1,000
8,899
2,398
97,516
32,318
129,834		 Admin, IT,
Governance,
Support costs
£
162,804
-
-
-
-
21,506
5,796
190,106
(190,106)
-		 2021
£
575,424
41,305
19,152
57,635
1,000
74,159
19,986
Advisory
Services
£
100,054
-
-
-
-
13,348
3,598
117,000
47,527
164,527		 Research
£
45,272
2,255
-
-
-
5,191
1,399
54,117
19,011
73,128		 Training &
Events
£
58,077
1,131
19,152
-
-
9,641
2,598
90,599
34,219
124,818		 Marketing,
Comms &
Publications
£
78,763
36,502
-
57,635
-
10,382
2,798
186,080
38,021
224,101
788,661
-
788,661

There has been a change in the charitable activities in 2022 and this requires a re-statement of the 2021 accounts.

26

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

4 Net income for the period

This is stated after charging / crediting:

This is stated after charging / crediting:
2022 2021
£ £
Operating lease rentals:
Property 25,715 33,480
Other 11,553 12,193
Auditor's remuneration (excluding VAT):
Audit 7,200 6,900
Foreign exchange gains or (losses) 926 (1,554)

5 Analysis of staff costs, trustee remuneration and expenses, and the cost of key management personnel

Staff costs were as follows:

Salaries and wages
Employer’s contribution to defined contribution pension schemes
Social security costs		 2022
£
449,723
47,450
17,451		 2021
£
507,135
50,147
18,142
514,624 575,424

The following number of employees received employee benefits (excluding employer pension costs and employer's national insurance) during the accounting period between:


national insurance) during the accounting period between:
2022 2021
No. No.
£70,000 - £79,999 1 -
£100,000 - £109,999 1 1

The total employee benefits (including pension contributions and employer's national insurance) of the key management personnel were £237,131 (2021: £197,445).

The charity trustees were neither paid nor received any other benefits from employment with the charity in the period. No charity trustee received payment for professional or other services supplied to the charity.

Trustees' expenses represents the payment or reimbursement of travel and subsistence costs totalling £nil (2021: £nil) incurred by 0 members (2021: 0) relating to attendance at meetings of the trustees.

27

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

6 Staff numbers

The average number of employees (head count based on number of staff employed) during the accounting period was as follows:

Raising funds
Advisory Services
Training & Events
Research
Marketing/Comms & Publs
Supporter Engagement
Admin, IT & support		 2022
No.
0.9
1.6
0.9
0.8
1.5
1.1
3.0		 2021
No.
0.9
2.3
0.9
1.7
1.9
1.6
3.7
9.8 13.0

The average number of employees (full time equivalents) during the accounting period was as follows:

Raising funds
Advisory Services
Training & Events
Research
Marketing/Comms & Publs
Supporter Engagement
Admin, IT & support		 2022
No.
0.7
1.3
0.7
0.7
1.3
0.9
2.7		 2021
No.
0.7
1.8
0.7
1.3
1.5
1.2
3.0
8.3 10.2

7 Related party transactions

There are no donations from related parties to disclose for 2022 (2021: none) which are outside the normal course of business and no restricted donations from related parties.

8 Taxation

The charity is exempt from corporation tax as all its income is charitable and is applied for charitable purposes.

28

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

9
Net book value
At the start of the period
At the end of the period
Net book value
At the end of the period
At the start of the period
Charge for the period
Fixed assets
At the end of the period
Cost - fixed
At the start of the period
Additions in the period
At the end of the period
Depreciation
At the start of the period
Cost - intangibles
At the start of the period
At the end of the period
Depreciation
At the start of the period
Charge for the period
At the end of the period		 Computers
£
8,121
6,799		 Total
£
8,121
6,799
14,920 14,920
5,032
2,078
7,110		 5,032
2,078
7,110
7,810 7,810
3,089 3,089
Website
£
51,248		 Total
£
51,248
51,248 51,248
25,169
12,812		 25,169
12,812
37,981 37,981
13,267 13,267
26,078 26,078

All of the above assets are used for charitable purposes.

29

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

10 Listed investments measured through profit and loss

Listed investments measured through profit and loss
VAT
Net gain / (loss) on change in fair value
Fair value at the start of the period
Fair value at the end of the period
Debtors
Trade debtors
Other debtors
UK Common investment funds
Investments comprise:
Accrued income
Sundry creditors
Prepayments
Creditors: amounts falling due within 12 months
Accruals
Deferred income
Taxation and social security		 2022
£
29,671
(3,149)		 2021
£
30,814
(1,143)
26,522 29,671
2022
£
26,522		 2021
£
29,671
26,522 29,671
2022
£
6,616
161
6,296
62		 2021
£
17,475
-
4,981
16,199
13,135 38,655
2022
£
460
15,773
9,291
29,411
116,303		 2021
£
-
14,335
2,144
24,376
159,993
171,238 200,848

11 Debtors

12

13 Deferred income

Deferred income comprises fees, corporate or individual subscriptions that have been paid in advance.

Balance at the beginning of the period
Amount released to income in the period
Amount deferred in the period
Balance at the end of the period		 2022
£
159,993
(159,993)
116,303		 2021
£
158,003
(158,003)
159,993
116,303 159,993

30

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

14a Analysis of net assets between funds (current period)

14b
15a
Total funds
Net assets at 31 December 2022
Analysis of net assets between funds
Tangible and intangible fixed assets
Net current assets
Tangible and intangible fixed assets
Net current assets
Movements in funds (current period)
Ethics @ Work 2021
Total restricted funds
Restricted funds:
Contributed Income, Research &
Publication Fund
Unrestricted funds:
Designated fund: Professionals against
Corruption (PaC)
General funds
Net assets at 31 December 2021		 General
unrestricted
£
21,077
432,426
453,503
General
unrestricted
£
29,167
301,444
330,611
At 1
January
2022
Income &
gains
£
£
5,664
-
4,412
-
10,076
-
43,309
-
330,612
828,745
383,997
828,745
(prior period)		 General
unrestricted
£
21,077
432,426		 Designated
£
-
26,473		 Restricted
£
-
9,067		 Total funds
£
21,077
467,966
453,503 26,473 9,067 489,043
Designated
£
-
43,309		 Restricted
£
-
10,076		 Total funds
£
29,167
354,829
330,611 43,309 10,076 383,996
Income &
gains
£
-
-		 Expenditure &
losses
£
-
(1,009)		 Transfers
£
-
-		 At 30
December
2022
£
5,664
3,403
10,076
43,309
330,612		 -
-
828,745		 (1,009)
(1,786)
(720,904)		 -
(15,050)
15,050		 9,067
26,473
453,503
383,997 828,745 (723,699) - 489,043

The narrative to explain the purpose of each fund is given at the foot of the note below.

31

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

15b Movements in funds (prior period)

Restricted funds:
Contributed Income, Research &
Publication Fund
General funds
Total restricted funds
Ethics @ Work 2021
Total unrestricted funds
Unrestricted funds:
Designated fund: Professionals against
Corruption (PaC)		 At 1
January
2021
£
5,654
-		 Income &
gains
£
-
72,047		 Expenditure &
losses
£
10
(57,635)		 Transfers
£
-
(10,000)		 At 31
December
2021
£
5,664
4,412
5,654
57,909
287,246		 72,047
-
752,499		 (57,625)
(1,000)
(732,734)		 (10,000)
(13,600)
23,600		 10,076
43,309
330,611
350,809 824,546 (791,359) - 383,996

Purposes of restricted funds

Contributed Income, Research & Publication Fund

This is a fund from a series of requested donations for the purpose of the IBE's Research and Publication work. It allowed the IBE to create more resources and freely disseminate them more widely. The monies collected so far will be spent by the end of 2023.

Ethics @ Work 2021 fund

This is a fund from a series of requested donations from major supporters to sponsor the research, collation of data and publication which is done every three years. These funds cover the costs of the outsourced research and publications. The surveys are conducted in a set amount of countries (usually determined by the organisation used to survey and their reach) and focused on the ethical behaviour of staff in larger companies (overall in excess of more than 10,000 employees).

Purposes of designated funds

Professionals against Corruption

A group of professional services firms have reached an agreement with the IBE, to work together on an anti-corruption and anti-money laundering agenda. The funds will be drawn down to facilitate research and projects connected to this agenda.

The £15,050 transfer of funds from general expense to PAC expense this year (note 15a) was due to staff resources used to complete a requested project from one of the PAC contributors.

32

Institute of Business Ethics

Notes to the financial statements

For the year ended 31 December 2022

16 Operating lease commitments

The charity's total future minimum lease payments under non-cancellable operating leases is as follows for each of the following periods. There are no property or equipment commitments outstanding at the end of 2022.

Less than 1 year 2022
2021
£
£
-
53,733
-
53,733
Property		 2022
2021
£
£
-
53,733
-
53,733
Property		 2022
2021
£
£
-
-
-
-
Equipment		 2022
2021
£
£
-
-
-
-
Equipment
- 53,733 - -

33