How to Keep Businesses Ethical Without Raising Penalties in Business

Designing an ethics management program is often delegated to a team.

Establishing a code of ethics in the workplace is a top priority for business management in contemporary times. While businesses can be held liable legally by the courts for breaking the law, the prevailing business management consensus recognizes the importance of avoiding the high-profile notoriety that accompanies court cases. Accusations of wrongdoing have cost companies billions in lost revenue, regardless of the outcome of the actual court case. For this reason, many progressive management teams embrace the practicality of implementing and promoting a code of ethics program, viewing it as a vital part of a sound business strategy.

Instructions

1. Develop a code of ethics program. Involve employee representatives at all levels, from the management team to hourly staff members, to encourage commitment from the entire company. An effective program provides detailed specifics about responsibility and accountability ethics' issues for all employees. Top management staff should show their support to the company code of ethics program by acknowledging it regularly in training and other corporate communications. If top management is not on board, employees may view the code of ethics program as mere "lip service," which will ultimately undermine its role as a useful corporate tool.

2. Provide employee training that integrates policy and procedural instruction with ethics' discussions, combining law and ethics as a significant component of any required corporate class activity. Ongoing discussions of ethics when appropriate in training and in other corporate contexts, reinforces the company's commitment to ethics as a top priority.

3. Implement an open-door management policy, encouraging employees to seek advice when faced with an ethical dilemma or other troublesome concerns. Employees are likely to discuss difficult ethical issues if they truly believe the company is committed to "doing the right thing." An open-door policy is a practical way to keep employees talking and asking questions on an as-needed basis. Preventing unethical employee choices is the goal of any code of ethics program.

4. Evaluate the code of ethics program continually. Appointing a diverse team to oversee and evaluate the program on a regular basis will enhance the program's ability to accomplish the mission and also allow for needed recommendations and changes when appropriate.

5. Respond to violations of the code of ethics. For the code of ethics program to work as a guide for employees, there must be consistent and fair feedback, as needed, when an ethics issue arises. Some companies appoint a board of peers for this purpose, while other companies rely on supervisors for this type of feedback to employees.

6. Reward employees with bonuses for exceeding expectations with regard to the ethics code. As a form of encouragement and public acknowledgment, rewarding employees for consistently exceeding goals for safety compliance or honest customer service, as two examples, promotes the corporate agenda in a positive manner.

References

• LRN: Dov Seidman Testifies Before U.S. Sentencing Commission
• Free Management Library; Complete Guide to Ethics Management:An Ethics Toolkit for Managers; Carter McNamara
• The Business Ethics Program