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A code of ethics is basically a set of company values and beliefs that is intended to guide management and employees in making sound ethical decisions and ensuring responsible business conduct in order to achieve a professional and productive work environment.
It is the primary means through which organisations give guidance for its employees on what is expected of them. It codifies the standards of ethical behaviour expected of employees and the values to which all members of the organisation commit themselves to uphold when conducting company business.
The ethics code is meant to address a variety of issues in the organisation that include:
l The work environment;
l Gender relations;
l Employee-management relationships;
l Conflict of interest;
l Financial practices, etc.
One of the most commonly held views or myths about business ethics by company leaders is that once a company has a code of ethics in place it follows that the firm’s ethical environment will improve.
Looking at the evolution of business ethics, while this view may have held some water during the 1980s and 90s, the trend has since changed.
This follows observed shortcomings of the stand-alone code of ethics and the emphasis the world over has now moved to implementation of comprehensive ethics management programmes.
Its infrastructure includes the code itself, ethics officers, ethics committees, ethics training, ethics advice lines, ethics reporting systems, ethics reward and sanctioning, and ethics evaluation.
In fact, research has shown that when the code of ethics is employed as a stand-alone instrument to manage the ethics environment, there will be little difference between organisations that have a code and those that do not have one. The same research shows that the code produces a huge difference when it is implemented as part of a comprehensive business ethics management programme that includes other tools like training, board oversight, whistle-blowing infrastructure, and consistent enforcement and application of rewards and sanctions.
Stand-alone codes are normally accompanied by a naïve and euphoric management belief that once the code has been crafted and distributed to staff, staff will simply join hands to practise ethical business behaviour with the code somehow magically working as envisaged.
Far from it, codes booklets are normally shoved in office drawers by staff and forgotten about, or they are left to gather dust on office shelves with them having little or no effect at all on employee workplace behaviour.
Those who will profess to believe in them in committing serious company misconduct can actually use worse still codes as a mask. In some instances codes are used as mere public relations or window dressing gimmicks.
Thus while companies have been writing codes of ethics for sometime, the role they play in shaping corporate cultures has changed dramatically. The focus the world over has shifted from writing codes to leveraging comprehensive ethics management programmes that inspires principled performance among employees, management and executives.
In our economy the shift from the use of mere codes to comprehensive ethics programmes should be propelled by these global trends and the current ethics challenges in the economy.
Our businesses have everything to lose when we fail to align them to international best practices or keep track of developments on the international arena. The global market place has become highly competitive and the rapid technological developments the world is witnessing are influencing the mutation of intriguing business operational challenges.
Simply having a code or having what has become known as the 3Ps approach in which you print the code of ethics, post it on the wall, and pray that staff will read and abide by it, no longer form the basis of an effective ethics management programme.
Notwithstanding the weaknesses identified above about the use of a stand-alone code of ethics to manage a company’s ethics environment, the code remains a key component of any corporate ethics management programme.
All effective comprehensive ethics management programmes are crafted around a code of ethics, which codifies the ethical standards, and guidelines that informs the ethics programme.
Implementing the code as part of a comprehensive ethics programme that has board oversight and all the other ethics management tools ensures that the code becomes real in practice and across all business operations.
It ensures that it is not a one-time effort that remains a written expression destined for employees’ office drawers without ever shaping employees’ behaviour. A good code should be more than simply being a statement of a company’s moral and ethical guidelines. It should reflect a true commitment by all staff at all levels in the organisation to propagating responsible business practices, and should be anchored by unquestionable senior management commitment.
Formulation of the code should involve employees so that they recognise it as their own and be willing to live by it.
Equally the tone and the style with which the code is written and communicated should be such that it will easily resonate with employees’ expectations.
The code should be written in simple and plain language, and should be a practical, easily accessible document.
Management should, however, understand that the code does not provide the answer to every difficult situation in the organisation. Neither should it be a substitute for individual judgment.
Rather, it should be intended as a guide to ethical decision- making in situations of ethical dilemmas, should be meant to stimulate debate, and contribute to an organisational climate that encourages meaningful and thoughtful inquiry about complex ethical issues, ultimately feeding into the company’s bottom line.
l Bradwell Mhonderwa is the Managing Consultant of Business Ethics Centre, a Corporate Governance and Business Ethics Management firm. Phone 04-293 2948, 0712 420 090, 0912 913 875, or e-mail [email protected]