A woman looking suspicious peeping through a doorway she contemplates The Ethics of Using Insider Knowledge

The Ethics of Using Insider Knowledge

When Business Boundaries Are Crossed

How best to broach the ethics of using insider knowledge? Sometimes, the best research comes from scrolling through social media. A seemingly innocent post sparked a debate on how an unasked question often needs answering before the actual question is posed. It sounds cryptic but what is to follow is a typical exchange when questionable business practices are aired and ethics take centre stage.

How does someone find themselves in possession of a former client’s data six months after the relationship ended? Is it the client’s fault for not locking down access once the contract had ended? That might be an oversight but does it excuse ignoring an unspoken ethical code?
 
Full disclosure: my responses were based on the premise that the rabbit’s spokesperson was considering selling service back to the same client whose information they were still accessing. While ambiguity exists regarding who these “anonymous pitches” would be aimed at, the real question lies in the unspoken ethical dilemma.
Market research is an established field with standard business practices that don’t require manipulation or deception. when a business relationship ends, it ends. Continued access, whether accidental or intentional, does not equate to a right to use that information. This is where ethical standards must come into play.

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Because the Unasked Question Still Needs Answering

Let’s take a more tangible example:
 
Carol runs a home cleaning business. One of her clients, Trevor, ends his contract amicably. He travels frequently, is saving for a wedding and has decided to sacrifice professional cleaning for now.
 
Carol still has the access code to his home. When she’s in the neighbourhood and knows he’s away, she lets herself in to check the condition of Trevor’s place.
 
Each time Carol “pops in” without Trevor’s knowledge, she sees the house isn’t being kept in order. She starts thinking about discreetly taking photos and using Trevor’s current situation as marketing material to attract new clients.
 
Now Carol is thinking that she could take some discreet photos and use Trevor’s current situation as a way to engage new clients.
 
Before discussing whether Carol can reference Trevor’s situation without naming him, we must address the core issue: Carol has no right to enter his home. Shifting the blame to Trevor for not deactivating the code doesn’t absolve Carol of responsibility.
Standard Business Practices

You Set the Professional Standards With Your HouseRules

Standard business practices don’t have to be the tired, flawed blueprint that fails many businesses.

With HouseRules Ethical Standards along with policies and procedures that guide the internal community is at the core of the business foundations.

The ethics of using insider knowledge will not be met with justification for not doing what you know is the right thing.

HouseRules are for SME founders determined to make real change and share the ethos of enjoying “la dolce vita” (the sweet life).

Time to Discover More?

Can the Ends Justify the Means

Is there a reasonable excuse to the ethics of using insider knowledge?
One argument put forward in response to the original question was:

"If your business was failing and for a small fee she could fix that, I don't think you'd bear the same sentiment"

It’s never been an admirable trait to assume what another person wants or needs. Some may appreciate unsolicited help, but not all “help” is beneficial. What seems like a minimal upfront cost can come at the expense of trust, transparency and integrity.
 
A closer look at the original hypothesis reveals that the provider is solely interested in their past work, not the precarious positioning of a struggling business. If the business is failing despite “on fire” automations, does that not warrant a conversation to investigate the true effectiveness of the support given?
Building Trust with The Ethical Strategist

Guiding You Through HouseRules

The customised services are curated to give you the support and guidance needed to set clear professional standards in your business.

It’s not simply about having rules, the right policies and procedures need to be in place for your business to build trust and a loyal following with both clients and especially your team (aka internal community).

That’s why at CAS Ltd, all services come with a conversation. To achieve standard business practice you as the founder need more than documents to go away to decipher for yourself.

So, let’s talk it out:

  • have your questions answered
  • leave with clarity, and
  • remove the dread from all things rules, policies and procedures.

Recognising the ethics of using insider knowledge and the real risk of jeopardising it all you’ve invested towards building a sustainable business. The appreciation for having policies and procedures in place to guide and support all in times of uncertainty.

Review the Bespoke Services

The Standard Business Practices We Should Demand

Unfortunately, pushing ethical considerations aside has become standard practice. It’s not good practice. It contributes to the ongoing business challenges many claim are “mysterious” or “unfixable.”
 
The opportunity for transparency is quashed when the rabbit abuses its position of trust and continues viewing the data that is not publicly available without the consent of the owner. Likewise, any opportunity for Carol has gone out the window when she first used the access code, knowing she had no right to do so any longer.
This is the essence of the HouseRules method. Ethical standards and moral considerations are often treated as afterthoughts. The mental load, the time-consuming nature of compliance and the belief that “everyone does it” make it easy to push ethics aside. Ignorance only creates space for deepen distrust, toxic work environments and stifles progress.

What practical steps can be taken to prevent this happening?

So, how can businesses prevent this? With the right structure in place and understanding, this could have been a win-win situation rather than an ethical misstep. Here’s how businesses (and their clients) can protect themselves:

Set Clear Professional Standards

Professionalism isn’t exclusive to businesses tied to governing bodies. Therefore, define the standards you will hold yourself accountable to. Formalising these into policies to strengthen operations and ensure transparency.

Establish & Communicate Ethical Guidelines

Create a plan that governs how client data, communication and access are handled before, during and after the engagement ends. Take the time with clients to have them understand the rules from the start.

Implement Data Access Controls

Clients should remove access to their systems at the end of a contract but service providers should also proactively request removal. A mutual responsibility approach protects all involved.

Review & Audit Your Processes

Regularly assess what access you retain post-project and whether it aligns with ethical and legal obligations. Where there is uncertainty, tread on the side of caution.

Build Trust Through Ethical Follow Ups

Rather than using backdoor methods, structure an ethical follow up strategy. Periodic check-ins, transparent outreach and offering value-driven support create a foundation for trust and potential future business.

The best way to navigate the murky waters of business is to keep transparency and integrity at the core of your practices. If ethical considerations are built into the foundation of a business, they won’t need to be debated after the fact. Instead of exploiting insider knowledge, a structured, honest approach ensures businesses are set up for sustainable, ethical success.
The potential of financial gain over doing what is right is not the way to lead a successful business.
 
When you’re ready to move away from justification and instead invest the time and effort into tailoring your own HouseRules – let’s get your house in order.
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