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 play.”
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 environment.
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 excuse.
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 practices?
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 practices?
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 firstname.lastname@example.org.