According to a survey from the
Ethics Resource Center, some of
the top ethical challenges facing businesses today include individual
rights and values in the business, operations, competition, product, shareholders and government. Not establishing a
code of ethics for employees to follow
can make your company more open to
some of these challenges.
“If an executive knows or has knowledge of something that’s going on in their
company that’s wrong, it should be
addressed,” says Frederick Jones, business law and ethics lecturer at Kennesaw
State University Coles College of
Business. “If they turn their head and it’s
found out later that the issue was ignored
and they knew it was there, that’s where
possible criminal liability comes into
Smart Business spoke with Jones
about how to maintain a culture of ethical standards within your company,
what to do if there has been a breach of
ethics and how maintaining high standards can create a more positive work
Where do ethical standards begin?
Management must set an example and
model the behavior they would like to
see throughout that company. Set up a
code of conduct, a business code of
ethics, and make sure that employees
and management know the law. If an
employee sees that he or she is violating
a rule, he or she will know to stop.
Ignorance of the law is no defense or
Help employees evaluate their values.
Establish policies that encourage employees to ask themselves, ‘Am I looking
for a loophole or am I trying to follow the
letter of the law when it relates to internal policies?’ Encourage employees to
follow their conscience and be aware. If
you feel guilty about something they’re
doing, it’s probably not good. Would you
want that decision you’re about to make
to be published? If you wouldn’t, it’s
probably not a good idea.
Encourage employees to keep their
promises. Everybody wants to know
that he or she can deal with somebody
who has integrity. If every business is
based on trust, your customers will feel
better about dealing with you.
Encourage employees and management to ask themselves, ‘What would my
hero say about this decision I’m about to
make?’ If it’s something that your hero
wouldn’t feel good about, you shouldn’t
do it. If companies incorporate this into
their policies, procedures and training, it
would be a big help.
How can you create guidelines for ethical
Sit down with corporate counsel and
line up some of the main issues that your
company deals with on a regular basis.
Itemize that list, coordinate that information with human resources and make
it a part of every new employee’s hire
package, making certain that all of the
established employees are aware of it, as
well. Organize training sessions, and
annually, quarterly or biannually review
those guidelines and procedures.
What happens if there is a breach of ethics?
Take each situation case by case and
evaluate the facts, because some ethical
breaches or violations are more severe
than others. If an individual broke one of
those rules, management would have no
other choice, if notice has been given, to
terminate the employee. It will send a
message to the rest of the team and the
company that this type of behavior will
not be tolerated. If management merely
turns its head concerning unethical
behavior, management is by default
approving that behavior. So something
must be done once unethical behavior
has been exposed or made known.
What consequences might businesses see
if they do not maintain ethical standards?
- We live in a litigious society; many
are looking to file a lawsuit. Unethical
behavior is a breeding ground for litigation.
- A company can expect long-term
profits to be minimized. The company
can lose profits from lawsuits, litigation
expenses and fees, negative public relations, and loss of company morale. All
those things will have a negative impact
if unethical behavior leads to a lawsuit.
- There is the possibility of prison
time, heavy corporate fines and penalties, or loss of license.
What are the benefits of maintaining and
creating a culture of ethical standards and
Employees will not view work as work,
because the culture will be positive and
uplifting. Companies can expect higher
profits. There will also be long-term success of the company. Lawsuits and legal
issues will be minimized.
FREDERICK D. JONES is a business law and ethics lecturer at Kennesaw State University, Coles College of Business. Reach him at
(770) 499-3627 or [email protected].