The effective management of ethics is sound business practice. Employees’ morale is raised; bottom-line performance is improved, your corporate image is enhanced; and customers choose to form business relationships with companies that adhere to high standards of ethical conduct. One of your key management tasks is to persuade employees to accept your organization’s ethical values. Here are some points to consider…
1. Understand the benefits of ethical conduct.
All key parties benefit from ethical conduct within the organization. Employees who have confidence in their management contribute to their organization’s prosperity. Conversely, in an unethical climate, employee productivity declines, creativity is channeled into seeking ways to profit personally from the business, loyalty diminishes, and absenteeism and staff turnover increase. Customers prefer to be associated with and remain loyal to companies that adhere to codes of ethical behavior. Shareholders derive up to fifteen times greater return from companies with a dedicated commitment to ethical conduct. US research in the 1990s identified companies across industry sectors that had outperformed their peers. The one common quality among those companies was a demonstrated commitment to their stated values.
2. Focus on ethical conduct.
When referring to codes of behavior, the term ‘ethical conduct’ is more comprehensive and more meaningful than ‘ethics’. The best ethical values and intentions are relatively meaningless unless they generate fair, just, and observable behaviors in the workplace. Ethical conduct focuses on demonstrated behavior-doing, not just saying.
3. Develop a code of ethical conduct.
The best way to handle ethical dilemmas is to avoid their occurrence in the first place. The process involved in developing a code of ethical conduct helps to sensitize employees to ethical considerations and minimizes the likelihood that unethical behavior will occur. A process is outlined in How to develop a code of ethical conduct on page 18 of the e-Book Ethics.
4. Promote process.
When it comes to managing ethics and, in particular, developing a code of ethical conduct, the journey is just as important as the destination. Codes, policies, procedures, and budgets are important. So, too, is the process of reflection and dialogue that produces those deliverables. Where possible use group decision making to actively involve participation in, and ownership of, the final outcome.
5. Link ethics to other management practices.
The development of a code of ethical conduct should not occur in isolation. The creation of a values statement, for example, should occur as part of a strategic planning process. A link to ethical conduct fits ideally with this process. Similarly, any discussion about personnel policies could also reflect ethical values as they apply to the organization’s culture.
6. Demonstrate ethical practices.
The best way for you and your organization to gain a reputation for operating ethically is to demonstrate that behavior-the most important way to remain ethical is to be ethical. And the best advertisement your ethics management program can have is everyone’s commitment to it. Be prepared for an increase in the number of ethical issues to be dealt with. As staff become increasingly aware of the importance of ethics management, it is to be expected that more issues will be identified. As Helen Vines says in ‘The Core of Good Business’ (HR Monthly, June 1999): ‘The most damaging thing is for management to come out with a code of ethics, or a value statement, and model a different type of behavior.’
7. Allocate roles and responsibilities.
The approach will vary according to the organization, but an appropriate structure could include the following:
• An ethics management committee, representing the entire organization, with responsibilities to include implementing and administering an ethics management program. The creation and monitoring of a code of ethical conduct would be part of that overall program.
• An ethics officer who ideally should be a senior executive but not from HR or the Legal Department. He or she must be trained in matters of ethics in the workplace and have ultimate responsibility for managing the program.
• Demonstrated involvement and support of top management. Staff and Board must see that senior management takes ethical conduct seriously.
8. Identify and model industry benchmarks.
An increasing number of companies strive to match practices with espoused values. The Soul of a Business (Bantam, 1993), for example, is an account of the way in which ethical considerations guided the day-to-day operations of the American company, Tom’s of Maine. One of the company’s stated values was its commitment to the health of the environment. The company, therefore, used glass containers instead of plastic, even though plastic was cheaper to purchase, label, and ship. Tom’s of Maine was also committed to supporting its regional economy. Only when it couldn’t purchase a resource in its local area would Tom’s go farther afield. This demonstrated commitment to espoused values contributed to the company’s growth and profitability and inspired others to follow its lead.