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Article:
Business Ethics Foundations: Key Elements
of an Ethics Program
by Matt Pike, CEO
With all the recent headlines about company misconduct and business
ethics violations has come a significant, and long overdue, increase
in the consideration of ethics among businesses. As a result of
the recent bad press about lawsuits against companies’ “behaving
badly”, there has been a rapid, almost frantic scramble
among many large corporations to set themselves apart from the
“wrong-doers” in the business world. Companies have
quickly penned ethics codes, instituted ethics compliance monitoring
programs, or have had high-level corporate officers visibly touting
their company’s “new and improved” ethics focus
in the hope of regaining consumer confidence in a devastated economy.
And with good reason: consumers are increasingly wary of all business
interactions, to the detriment of all, even the most upright of
enterprises.
While businesses are fighting for survival in adverse conditions,
they need to be looking to the future and building solid foundations
upon which to base their future efforts. Even without investing
vast financial resources, any company can reap tremendous benefits
from considering and initiating an ethics program. In addition
to the widely recognized value of improved company image and a
smoother, more effective and happier work environment, an ethics
program can contribute to a better bottom line, through stronger
and more solid client relationships and decreased expenses in
a variety of areas.
A solid ethics foundation has four key elements. The first is
a strong code of ethics. The Sarbanes-Oxley Act of 2002 made it
important for businesses to have an ethics code, something in
writing about what one ought to do, and what to strive for. This
also serves to inform employees of the vision that the company’s
executives have for the company’s image and goals. This
helps new employees learn important aspects of how to carry out
their actions at work., and provides veteran employees with something
to fall back on; both as a reminder and as something to cite if
they are being pressed to do something that they believe to be
wrong.
A strong ethics code ought to address both general values for
which the company stands, and particular principles specific to
the daily operations of that particular enterprise. Thus some
codes may focus on full disclosure of their own abilities, time
estimates, and costs, while others might address safety and/or
full acceptance of responsibility for the quality of some product.
The key is to generate a code that is tailored to the activities
and goals of a particular organization, while simultaneously upholding
universal ethical principles.Don't be afraid to rewrite. Repeatedly.
The second key element to a solid ethics foundation is ethics
training. This is where the ethics code is integrated into the
workplace. After all, any ethics code, no matter how well written,
that is not understood or followed is only worth the paper or
disk space it is stored on. Some companies have an in-house training
department that can provide the requisite training. A trainer
needs to have sufficient experience and training in the field
of ethics to be most effective. There are more variables in ethics
than in the most complex calculus equation, and so adequate training
of a workforce calls for a significant level of expertise. Everyone
has already sat through “be nice to each other” lectures
as a child; business-level ethics training needs to go far beyond
this to add anything new.
An alternative approach to providing in-house training is to hire
a specialized ethics training company for seminars or online training
of employees. A word of caution-the ethics training that most
companies are providing to their employees, and that most ethics
training companies are offering, is compliance based. While a
good start, this kind of training is meant to inform someone what
not to do if they want to stay out of trouble. Recent federal
and state compliance requirements have accomplished good things
in specifying actions that, for the good of the public, are prohibited.
While these requirements are important, they are nevertheless
merely corrective in nature, ex post facto, for problems that
never should have arisen to begin with. What happens when a new
situation arises, that is not detailed in any federal regulation?
Every day we face new experiences and new challenges. If we want
people to make ethical choices in novel situations, the focus
on ethics training needs to be shifted from “here’s
what we have seen is bad to do” to providing the analytical
tools and decision-making processes that will empower workers
from the beginning. The other benefit to this manner of training
extends beyond the workplace. Once people have learned how to
live ethically, not just how to act ethically, the benefits of
doing so carry over into all aspects of their day. The quality
of home life improves, relationships are more fulfilling, and
life is more enjoyable for everyone involved. Ask your perspective
consultant lots of questions about their approach, and ask to
see sample materials to ascertain which approach they employ.
The third key element to a strong ethics foundation is an “ethics
coach”, again either in-house or out-sourced, who will be
available as a friendly and confidential resource for employees
facing complicated ethical dilemmas. This person needs to be available
for “casual chats” when difficult situations arise
to provide guidance, counseling, and advice to employees. This
person needs to have sufficient expertise in employing ethical
concepts, analytical skills and decision-making tools to facilitate
an ethical resolution to the problem. Also essential in an ethics
coach is the assurance of confidentiality. There are far too many
places out there where employees are too intimidated to go see
the ethics coach, either because of fear of their concerns getting
back to their supervisor, or because of stigmatization by fellow
employees for seeking help. This can be helped by a friendly and
upstanding coach who protects confidentiality, and who speaks
with everyone in the office at various times, not just when there
is a difficulty.
The fourth and final key element, which ties in closely to the
third, is an anonymous reporting tip-line. This serves to provide
employees with a means for reporting observed misconduct or violations
without fear of reprisal. This serves to further discourage ethical
violations, while getting everyone involved. It also provides
the all important “do something about it” option.
The most important part of this is obviously the anonymity. If
there is even a perceived chance that an employee’s use
of the hotline will be revealed, it will not be used. This is
one advantage to outsourcing your ethics program, because in both
the third and fourth key elements, confidentiality is central,
and an out-of-house ethics company is not accountable to, nor
controlled by, the company that is being reported against. This
puts the ethics company in a position to act on behalf of the
reporter without divulging who the caller was. Many companies
are disturbed by the thought of giving employees what they perceive
to be a “complaint line”, but it is far better to
deal with problems early, than to let them get out of hand, resulting
in such things as lawsuits or the loss of employees; additionally,
early detection and resolution of ethical problems may save the
company huge amounts of money in cases such as theft or other
misconduct.
The current trend of increasing focus on ethics is a much-needed
change, with recent events rightly drawing attention to its importance.
Now that it is here to stay, some time and resources need to be
invested in determining what role ethics and ethics training are
going to play in the future of business. If used well, ethics
enhancement may not be just another expense for businesses that
are already struggling, but the solution that reverses the economic
difficulties of late and builds a better way of doing business,
and of living in general.
Don't forget to Contact
Us to schedule your appointment for a free consultation
to examine current ethics programs, training and strategies at
your organization!
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