Effective ethics management is good business practice. Employee morale rises; the final performance is improved, its corporate image is improved; and customers choose to do business with companies that adhere to high standards of ethical conduct. One of your key managerial 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 the prosperity of their organization. Conversely, in an unethical climate, employee productivity decreases, creativity is channeled into finding ways to personally benefit from the business, loyalty decreases, and absenteeism and employee turnover increase. Customers prefer to associate with and remain loyal to companies that adhere to codes of ethical behavior. Shareholders get up to fifteen times the return from companies with a dedicated commitment to ethical conduct. American research in the 1990s identified companies in every industry sector that had outperformed their peers. The only common quality among these companies was a demonstrated commitment to their stated values.
2. Focus on ethical conduct.
When referring to codes of conduct, the term ‘ethical conduct’ is broader and more significant than ‘ethics’. The best ethical values and intentions are relatively meaningless unless they lead to equitable, fair 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 prevent them from happening in the first place. The process involved in developing a code of ethical conduct helps to make employees aware of ethical considerations and minimizes the likelihood that unethical behavior will occur. A process is described in How to Develop a Code of Ethical Conduct on page 18 of the Ethics e-Book.
4.Promote the 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 is the process of reflection and dialogue that produces those results. Whenever possible, use group decision making to actively involve participation and ownership of the end result.
5. Link ethics with 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 ideally fits with this process. Similarly, any discussion of personnel policies could also reflect ethical values that apply to the culture of the organization.
6. Demonstrate ethical practices.
The best way for you and your organization to earn a reputation for operating ethically is to demonstrate such behavior: the most important way to remain ethical is to be ethical. And the best publicity 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 addressed. As staff become more 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 when management comes up with a code of ethics, or a statement of values, and models a different kind of behavior. ‘
7. Assign roles and responsibilities.
The approach will vary by organization, but a suitable structure might include the following:
• An ethics management committee, representing the entire organization, with responsibilities that include implementing and administering an ethics management program. The creation and monitoring of a code of ethical conduct would be part of that general program.
• An ethics officer who, ideally, should be a senior executive, but not from Human Resources or the Legal Department. He or she must be trained in workplace ethics issues and have ultimate responsibility for administering the program.
• Demonstrated involvement and support from senior management. The staff and the board must see that the ethics of senior management take the conduct seriously.
8. Identify and model industry benchmarks.
An increasing number of companies are striving to align practices with espoused values. The Soul of a Business (Bantam, 1993), for example, is an account of how ethical considerations guided the daily 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. Therefore, the company used glass containers instead of plastic, even though plastic was cheaper to buy, label, and ship. Tom’s of Maine is also committed to supporting its regional economy. Only when he couldn’t buy a resource in his local area would Tom go further. This demonstrated commitment to the values espoused contributed to the growth and profitability of the company and inspired others to follow suit.