Embrace Ethics in Your Company

Originally published
Originally published: 1/8/2018

So what are your values? Are they communicated and role modeled? Do they inspire trust and confidence in your employees, customers and the community? Do they create a sense of pride and a desire in each employee to achieve greatness? You should care as much about HOW you achieve your goals as you do about achieving them.

When it comes to ethics in the workplace, many people make assumptions that others will act in an “ethical” manner. The unspoken issue is everyone has different perspectives on what ethical behavior is. As defined, ethics is the moral principles that govern a person's behavior. Moral principles are what a person believes is right or wrong. People in the workplace normally have been raised by a set of values which dictates their behavior. Since we were raised differently our view of right and wrong may differ. If you own or run a company this can become an issue.

A code of ethics is about culture. Many small to medium-sized businesses may have a code of ethics but it is probably not written down in many cases. There is a saying: “If it is not written down, it did not happen”. The same holds true to this vital area of business. Simply expressing your expectations verbally on decision making and behavior is not enough. There needs to be clear, delineated written guidelines on both, and they should be based on your values as a person.

Ethical Standards are normally outlined in two documents, a Code of Ethics which is a document usually included in your HR handbook that dictates the expected parameters of an employee’s decision making. In addition, there should be a Code of Conduct which contains explanations of what expected and acceptable behavior is. Both documents dictate the values, standards and expectations of everyone who represents your company. The General Manager or owner is responsible for writing and communicating the ethical standards for their organization. Businesses develop their codes, based on their core values, and no two codes are the same. To be truly effective, the code of conduct must be embedded in the business, so employees know how it applies to them.

Having a Code of Conduct can lead to improved employee behavior. An Integrity Survey, published by KPMG Forensic, found that ethics programs, including codes of conduct, had a strong impact on how employees felt. Ninety percent of those surveyed who worked in companies with a code of conduct felt they were motivated to "do the right thing”. This compares with just 43 percent of people who work in companies without strong codes of conduct.

A study by the Ethics Resource Center found that organizations with strong codes of conduct experience less misconduct, less failure to report misbehavior and less retaliation on the job. This improved ethical behavior can positively impact business performance. Thus, one way to view a code of conduct is as a type of preventative medicine. Without it, a business is vulnerable because it has neglected to take business ethics seriously.

So, where do you start? The first step in developing these critical documents is deciding what values are important. Clarifying these details can be especially helpful as the company grows. A growing organization will begin hiring more people they grow, and some of those people may be dissimilar to the company’s original value structure. By having written rules and procedures in place, you assure your company will grow in the way you want it to. I am a big fan of having the core values posted on meeting room walls for all to see.

For a code of ethics and conduct to be useful tools, it is important to introduce and endorse it at the highest levels of the business. Once the code is written, Owners and Managers must incorporate it into orientation and training programs. Many companies require staff members to sign a document that they read and understand the code, and others require all employees to abide by the code as a condition of their employment. Many companies also use an audit or internal review to measure the effectiveness of their code.

A common mistake that companies make when drafting a code of ethics or conduct is not to consult employees during the development stage. Even if you think you're in tune with the daily trials and tribulations of your staff, you must include others in the process. Employees will have deeper buy-in when involved and also understand why the code is important and why it ultimately contains the concepts that it does.

The first step is to find out what topics employees feel they need guidance on. To do this, the company can employ surveys as well as formal and informal discussions. There should be a process in place for anonymous reporting in order for employees to seek guidance about ethical issues or concerns.

Your code of ethics is a living document that changes as your business changes. It doesn't hurt, once a year, to look at it yourself and ask, 'Does this truly represent our business and where we want to be?’ So what are you waiting for?

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