Create a Company
Code of Ethics
- Create a reference point and guiding light for the hard times
- Focus on lasting value
- Make sure management asks questions and employees speak up
FORMS:
- Sample Code of Ethics (PDF) (WORD)
- Sample Business Ethics and Conduct Disclosure Statement (PDF) (WORD)
To listen to this strategy on audio file, please
click here. This is
an example of one of the 31 audio files that come with the program.
We're all human beings and sometimes even the best of us get confused about what's right and what's wrong. Managers and employees need to know what your company stands for. They need a reference point and guiding light for the hard times. They need to know what course of action to take when facing ethical challenges. Having an ethics policy is like having a silent watchdog. Managers and employees are sometimes faced with the ethical dilemma of whether to take the 'high road' or to take the expedient one - believing the latter to be in the company's best interest. Many of them confuse a company's short-term and long-term best interest. Engineers fudge drawings to meet a boss' project deadline. Lawyers over-bill for services hoping to keep their jobs alive. Human resource managers attempt to bury nasty cases of sexual harassment, hoping to win executive favor. We have to guard against these very human failures. Having an ethics policy that focuses on lasting value is an essential part of doing that.
Remember, a system that compromises its ethics loses integrity and will eventually collapse from within, exposing itself to whistle-blower lawsuits as well as government fines and penalties. The space shuttle disaster is a classic example. The engineers knew there would be an O-ring failure, yet the truth was buried by short-term deadlines. Conversely, there are numerous examples of companies that have faced ethical challenges and come out on top - such as when Johnson & Johnson pulled potentially contaminated Tylenol from store shelves. Sure, it hurt them in the short run, but the long-term benefits were very clear. The fact is, good ethics is good business!
You are provided two forms to support this strategy. The first is a Sample Code of Ethics, which should be adapted for your company. Find out whether there's an ethical code already in existence from your professional or industry association. Call the Ethics Resource Center in Washington, D.C. or the Michael Josephson Institute of Ethics in Marina Del Rey, California. Subscribe to Business Ethics - a magazine that has great business content, and pass it around the workplace.
The second form is the Business Ethics and Conduct Disclosure Statement. This statement makes it clear to employees that should any ethics violation occur, it is their obligation to immediately report this fact to management. As we'll discuss later, taking a front-end approach to legal compliance requires management to ask questions and for employees to speak up.
Action Items:
- What ethical values does your company stand for?
- How have you communicated these values to your managers and employees?
- What are the major ethical issues that arise in your industry?
- What strategies and safeguards can you use to prevent those ethical issues from having an adverse affect on your company?
- Use your responses to Action Items 1, 2, 3 & 4 and combine them with Sample Code of Ethics to create or modify your company's Code of Ethics. Remember that to be effective, you must promote it, live it and reinforce it.
- Incorporate Sample Business Ethics and Conduct Disclosure Statement, into your Employee Handbook or have it signed as a separate document by your employees. Maintain the document in a common file or in each employee's individual file.
Suggested Resources:
Contact the Ethics Resource Center in Washington, D.C., at 1-800-777-1285 (http://www.ethics.org/) and the Josephson Institute of Ethics in Marina Del Rey, CA, at 1-800-711-2670 (http://www.josephsoninstitute.org/), and ask them for information that will help you to build an ethics policy for your company. Subscribe to "Business Ethics" magazine 1-800-601-9010. Lastly, pick up "Eighty Exemplary Ethics Statements" by Patrick Murphy, which can be found at www.amazon.com.
