ADVANCING ETHICAL CULTURE AND BUSINESS PRACTICESIN INDUSTRY AND GOVERNMENT

10 Critical Questions To Ask
When Trying To Build An Ethical Culture

1. What is the relationship between ethics and other performance metrics in the company?

A basic precept in performance management is “what gets measured, gets done.” If the only thing that is measured is achievement of financial goals, how will a company's ethical aspirations be reached? Current data clearly shows that ethical companies are more competitive, profitable, and sustaining than unethical companies.

 

2. Is our required Ethics training more than rote introduction of the company's code of conduct?

The most successful Ethics training moves from theory to practice, and from the conceptual to the real. Live case studies can help employees, management, and leadership solve relevant ethical dilemmas..

 

3. What is the relationship between exercising sound ethics and retaining great talent?

Fortune's list of the top 100 companies to work for contains a wide variety companies with no obvious common denominator (salary, benefits, career opportunities, profession, location all vary). The most common factor appears to be trust between employer and employee. Ethical behavior can lay the groundwork for attracting and retaining the best talent.

 

4. Have we conducted a risk assessment to determine our exposure to major ethical damage? What is OUR potential ENRON?

Each company faces its own ethical nightmare, but most face similar ethical vulnerabilities (accounting irregularities, cost mischarging, theft, kickbacks, gratuities, etc). Companies should also examine the potential hazards of “perverse” incentives, such as compensation based 100 percent on meeting financial goals, and the various unintended consequences of policies, procedures, or expectations.

 

5. How can we be more proactive in the areas of ethics, culture, and corporate citizenship?

Leaders need to own and shape the corporate ethical culture as much as any other management initiative. Characteristics of predictable ethical outcomes include management credibility, upward communication, and teamwork. Well-tested diagnostic and survey tools can help measure success in these areas.

 

6. What tone should executive leadership set regarding ethics, integrity, and transparency?

What leaders say, think, and feel affects the tone as much as their actions. Mistrust of senior leadership breeds cynicism, which can erode loyalty to an organization and push ethical employees and leaders out the door.

 

7. What does management need from the Board of Directors and senior leadership to enhance corporate ethical culture?

Employees who view the Board and executive leadership as unconcerned will discount any directives about ethics that may come from them. Consistency and authenticity from the Board and senior executives (often expressed in terms of time, talent, and resources) is essential to success).

 

8. Who is driving Ethics and Compliance in the company?

Companies need to designate key senior internal drivers who move along the discussions, training, and initiatives. The Chief Ethics and Compliance Officer (CECO) concept is dependent on three factors: independence, authority, and connection.

 

9. Do we have consistency of message (in terms of ethics and culture) between and among the Board, CEO, the senior executive team, and the employees?

There needs to be a common vocabulary, consistency of tone and guidance, and a uniformly applied system of rewards and sanctions in order for employees to understand the value of good ethical decision-making.

 

10. Are there any roadblocks that discourage honest conversations on ethics and the implementation of ethical practices, procedures, and protocols?

A company needs to have mechanisms in place to independently assess the current ethical environment and the effectiveness of its current ethics activities. More importantly, there needs to be a willingness to make changes and redirect the company's efforts, if necessary.