Implementing a Code of Ethics

Implementing a Code of Ethics

Peter Deswood III

Implementing a Code of Ethics

Implementing a code of ethics can be an arduous process that sets the tone for employees and other stakeholders to follow. When a code of ethics has been implemented successfully employees, managers, board of directors will have a guideline for operating and making ethical and moral decisions that will have a lasting impact on society (Gilman, 2005). In order for an organization to be successful, they need to operate with integrity, accountability, and trust. This paper will discuss the implementation process of a code of ethics by connecting the code of ethics to the mission and vision statement, a strategy for launching the code, an enforcement strategy, an evaluation of the code of ethics, and finalizing with research to ensure the code is successfully implemented.

The code of ethics is not a freestanding document or text that is posted within organizational walls or binders (Gilman, 2005; Schwenke, 2007). Therefore, the developed code of ethics needs to be aligned with the organizational mission and vision statement to ensure that board of directors, managers, and employees will operate and make decisions in an ethical and moral manner. When the code of ethics was designed, there was an emphasis on how the organization might impact society, the community, and stakeholders while focusing on organizational principals and values. For example, the wording and ideals utilized in the code of ethics parallels what is written in the mission statement. Words such as “honesty, justice, and trust” are key words in the organizational mission statement. In addition, there is an emphasis on corporate social responsibility when representatives are making decisions (Carroll, 1991). To ensure the code of ethics is connected to the vision statement the word “integrity” (See Appendix) is an important concept employees need to understand. Leading an organization that focuses on integrity is an essential for the organization to stand the test of unethical behavior. Another important document the code of ethics needs to be linked to is the employee code of conduct. Like the code of ethics, the code of conduct will describe and prevent unethical behaviors. For example, Gilman (2005) stated that a code of conduct is developed to supplement the code of ethics and “is necessary to both protect the employee while at the same time protecting the reputation of the organization” (p. 16). Aligning the code of ethics to the code of conduct, mission and vision statements is essential and will ensure the code of ethics is an organic and working document.

Once the code of ethics is coupled with other organizational documents, launching the code of ethics becomes the focal point to becoming an ethical and moral organization. To ensure the code of ethics is implemented, the status quo of the organization needs to change. Change has to occur by training and communicating what is written in the code of ethics (Gilman, 2005; Navran, 1997). One solution is to educate and train employees is a mandatory thirty-minute training session followed by continuous trainings sessions. In the training sessions, employees as well as board members will work collaboratively to understand what is considered unethical. Furthermore, organizational representative will solve several case studies where their morals and ethics are tested. Having board members present in the training sessions will set the tone that the organization is dedicated to a high level of ethical and corporate and social responsibility. In fact, Gilman (2005) commented that a code of ethics is not self-implementing and it takes organizational leaders to model ethical and moral behaviors. In essence changing the organizational culture from top to bottom (Bowen, 2010). Most importantly, the code of ethics needs to be communicated on the company website, handbook, and annual reports so shareholders and stakeholders understand the organization is committed to high standards of ethical and moral practices.

Enforcing a code of ethics begins with communicating the code to employees and ensuring they understand the appropriate norms and behaviors according to code of ethics. Also, adjusting annual employee evaluations to incorporate aspects of the code of ethics to ensure they are accountable for behaving in an ethical and moral manner. After expectations are developed, a reward system can be established for employees who behave ethically and make sound ethical decisions. For example, coworkers and managers will nominate exemplar employees who exhibit ethical behavior. In addition to rewarding ethical behavior, recognizing employees who exemplify high ethical and moral standards. Celebrating employees who demonstrate ethical behavior is a key element to building an ethical climate (Johnson, 2011) and a culture of trust (Brien, 1998) that focuses on high standards. Having a strong ethical climate is essential for governing ethical behavior and a code of ethics (Verschoor, 2002). Ford and Richardson (1994) and Johnson (2012) commented that organizations that have a reward system and handout sanctions have a higher level of ethical behavior from their employees. Therefore, violators of the code of ethics will face disciplinary repercussions depending on the severity of the unethical behavior. Severe cases of unethical behavior such as breaking laws will result in immediate termination.

Evaluating the effectiveness of the code of ethics may be a complex, abstract or daunting (Gilman, 2005) process, especially since Thompson, Thach and Morelli (2010) noted that 50 percent of respondents in their study did not report unethical behavior. With this in mind, it is important to focus on attempting to understand the actual number of unethical behavior that exists within the organization. Thus, developing a culture of trust that celebrates and rewards ethical behavior is a step in determining if the code of ethics is effective. Establishing a Whistleblower hotline or helpline (Navran, 1997) will also allow the organization to gather pertinent information that will assist in enforcing the code but will also act as a reporting mechanism. Data collected by the hotline will be the most essential avenue to determine effectiveness. Another evaluating process to determine effectiveness would be to randomly select employees to complete a survey or assessment about ethical behavior and the effectiveness of the code of ethics. Possible questions to post to representative are (1) “Do they agree with their importance and appropriateness? (2) Do they believe they apply to all employees at all levels?” (Navran, 1997, p. 117). The most important determinant of effectiveness was built into the actual code of ethics or supporting structures. For example, the development of the code entailed having stakeholders, board of directors, managers, and employees partake in constructing the code. This ensured that there was buy-in and ownership for the code of ethics rather than an outside agency developing the code and then forcing it on the organization. For example, Gray (1996) commented that stakeholder involvement and commitment to a code of ethics is a necessary step to ensure the code is viable. However, because the code does not cover all instances of unethical behavior, it is important to assess the gathered data to determine if the code needs to be adjusted to meet the growing needs of the organization.

The code of ethics developed for this assignment will succeed because as Gilman (2005) stated, “Printing a code of ethics and placing it on a wall, is not implementation. There must be an institutional fabric for developing the code, communicating it, interpreting it, training or education on the code, enforcing it and assessing it” (p. 25). The implementation of the code paralleled many of the suggestions by Gilman. Navran (1997) commented that the code needs to involve all stakeholders and is based on a culture of respect and “concern for doing the right things in the right ways” (p. 117). Another reason the code of ethics will be successful is because there is a reward system established to encourage ethical behavior, performance evaluations incorporate ethical practices, and there is an obligation to society, community, and stakeholders by operating in an ethical manner (Johnson, 2012). Most importantly, the code of ethics will not fail due to the code being developed by stakeholders, boards of directors, managers, and employees. Gray (1996) posited that stakeholders were the link to creating a viable and sustainable code of ethics.

In conclusion, developing and implementing a code of ethics can be challenging if stakeholders do not commit to the code and understand its implications to society. Furthermore, to ensure the code of ethics is viable and sustainable, the code needs to be connected to organizational documents, supported by leaders, and revised as new challenges surface. In addition, enforcing a code of ethics begins with effective communication of organizational values, morals, and ethics to stakeholders and organizational representatives. Lastly, the code of ethics is not a freestanding document developed for unethical people, however it is developed for people or organizations that want to be more ethical (Gilman, 2005).

References

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