Executive Tools
- Executive Summary
- Self Assessment Checklist
Expert Practices Articles
- Are You an Enron in Disguise?: A Business Ethics Overview
- The CEO: Building an Ethical Culture
- Communicating Ethics
- Ethics Training
- Ethics Programs
- Codes of Conduct
- Ethics as a Brand Weapon
Tools & Analysis
- A Leader's Steps for Ethical Growth
- Top Ten Classic Rationalizations
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Are You an Enron in Disguise?: A Business
Ethics Overview
For Vistage speaker Peter Schutz, a company's ethics is the single
most powerful way to differentiate itself from the competition.
"Customers buy from people before they buy the product or service
offered. That means trusting in an ethical business."
Best of all, Schutz notes: "It's free! The ROI on ethics is
limitless."
Fellow TEC speaker Harvin Moore agrees. "Ethical values fall
into two distinct categories: core and personal. Core values are
intrinsic to a large body, like a civilization, and embody certain
characteristics like honesty, courage, justice, fairness, respect
for others -- qualities that are recognized by all civilizations,
and that don't change over time."
Virtually all business situations can be considered in an ethical
light, since just about every action we take -- as well as those
we decide not to take -- can be subjected to ethical evaluation.
"Values aren't just additional factors to consider when making
a decision," Schutz says. "For that reason, we need to
look inside at our core values and make sure that dealing honestly
with ourselves and everyone we come in contact with is our first
priority."
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The CEO: Building an Ethical Culture
Even if your actions aren't unlawful, he adds, they send a terrible
message.
"Your behavior is disproportionately symbolic to employees.
If there's a disconnect between what you say and what you do, employees
will see it -- and, most likely, emulate the wrong behavior."
Shutz concurs. "Whether it's simply through ethical behavior
or by instituting a full-blown ethics program, the company's leader
must stand behind his or her actions fully. If a mistake is made,
admit it. Anything less runs the risk of breeding cynical attitudes
among the staff that are very difficult to dislodge."
Effective moral leadership includes:
- A framework of principles. A personal code of conduct should
be so integral to your viewpoint that unethical behavior never
becomes an option.
- "Selling" ethics to others. You are the leader. Lead
by example. Your decisions and actions send a clear message of
what is tolerated and what isn't.
- Respecting yourself and others. Although people may define "respect"
in different ways, everyone knows when they're being "disrespected."
Moral leadership supports actions that avoid any harm or discourtesy
to others.
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Communicating Ethics
When it comes to communicating ethics, several "delivery strategies"
are available:
- Safe feedback systems. One true test of a company's commitment
to ethics is an atmosphere where employees can safely tell their
supervisors about perceived "cracks" in the program.
Creating a mechanism for reporting problems encourages such behavior.
This can include (1) suggestion boxes; (2) one-to-one meetings;
and/or (3) anonymous hotlines. Employees should never feel they
are jeopardizing their positions by reporting ethical concerns.
- Company communications. Look at existing modes of communication
for ways to spread the word about your company's dedication to
ethical behavior. Appropriate venues include new employee orientation,
sales training sessions, business planning and other day-to-day
activities.
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Ethics Training
A comprehensive ethics training program offers these substantial
benefits:
- Provides tools for people to behave in an ethical manner
- Enables people to understand the consequences of their behavior
- Raises awareness that the company values ethical actions
"The first step is defining yourself and your business as
an ethical enterprise," Schutz continues. "Take another
look at your mission and vision to ensure they are clear, consistent
and up-to-date. Communicate those values throughout the organization.
Make sure people within the company understand that support and
guidance are there when needed."
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Ethics Programs
According to Moore, the answer is a qualified yes. "In most
TEC-sized companies, this role seems to naturally reside with the
owner. Dealing with employees is a lot like dealing with your children.
You're the role model and authority figure. As a result, you better
do what you say you want them to do."
Schutz feels the position itself may be superfluous. "The
job of enforcing an ethical standard belongs to the CEO and can't
be delegated," he says. "The organizational leader is
like God. God can have prophets but can't relinquish primary responsibility.
Only the CEO can be the custodian of corporate culture."
By its very nature, an ethical structure in the workplace means
advocating certain behaviors and discouraging others. It's important,
say the TEC experts, to be clear in how you go about it.
"Reward and celebrate ethical behavior," Moore says.
"Start by instituting accountability standards for employees
at all levels of the organization. Make it clear that your policy
is zero tolerance for ethical lapses."
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Codes of Conduct
"A code of conduct that emphasizes positive values -- including
respect for others, quality for customers, responsibility toward
society -- can instill a sense of pride among employees," says
Schutz. "In this environment, each employee understands that
his or her decisions have an ethical impact on everyone around them."
What's appropriate to include in the code of conduct? The TEC experts
suggest the following guidelines:
- Comply with laws and regulations.
- Avoid sexual or racial discrimination.
- Maintain confidentiality.
- Avoid personal use of company property.
- Avoid conflicts of interest.
- Report illegal activity to your supervisor.
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Ethics as Brand Weapon
When a company dedicates itself to fostering an ethical culture,
there's no reason it shouldn't be known for this dedication, according
to Moore and Schutz.
"A commitment to ethics projects a strong public image,"
Moore says. "The company's customers, as well as the public
at large, respond positively to this, particularly in these ethically
troubled times. The message an ethical company sends is: We value
people as much, if not more, than profits."
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