How to Build an Ethical Culture with Your Code of Conduct

“Real integrity is doing the right thing, knowing that nobody’s going to know whether you did it or not.” -Oprah Winfrey

It started way back in 1943, with the famous Credo developed at Johnson & Johnson. Since that time, thousands of codes of conduct have come and many have gone. Often they are simply pages in a notebook, gathering dust on a remote shelf in the HR manager’s office. Oh yes, new-hires are obliged to read them (or at least to sign a document saying that they have).

If you have a code of conduct, is it working for you? If you don’t have one, how can you create one and use it to build an ethical culture in your organization? Let’s take a closer look.

Three classic pitfalls

There are many reasons why a code of conduct doesn’t work. Three of the main ones are:

  • The code is based on “have to,” not “want to.”
  • Management talks the talk but doesn’t walk the walk.
  • Implementation is top-down.

Do I have to? If you do business with any government agency, church organization, medical facility, or educational institution, chances are they require you to show evidence that you have and use a code of conduct. Creating your code to comply with a customer’s requirements does not provide a firm foundation or motivation for building an ethical culture.

All talk, no walk. Regardless of how or why a code was developed, management buy-in is critical. Consider the sad case of a Fortune 500 corporation with a long history of ethical challenges destined to collapse. Top management decided that a code of conduct was imperative. They hired a lawyer who was named VP and Chief Ethics Officer. They wrote an elaborate manifesto and instituted company-wide ethics training programs. But privately, top executives joked about how silly this exercise was, complained about the cost, and never personally appeared at any training sessions. Complete failure was almost guaranteed.

Do as I say. Management sometimes imposes the code of conduct with grim-faced determination. Perhaps the code is even written by the CEO with little or no input from others, and announced without preamble at an all-hands meeting. There is not much attention given to immediate implementation or long-term evaluation. “You will behave ethically — or else” is the message employees hear.

Three promising strategies

The above scenarios are all too common, but perhaps there is a different way. Here are three strategies for using a code of conduct to create an ethical environment within your company.

  1. Use the team approach. People support what they help create. Rather than starting at the top, initiate a cross-functional team to create or revise your code of conduct. Seek input from a variety of sources, both internal and external. Hold open discussion forums that anyone can attend. Encourage discussion, even disagreement.
  2. Make it values-based. An effective code of conduct doesn’t need to be a lengthy laundry list of dos and don’ts. Companies have been writing employee conduct manuals for decades. Today, however, the role they play in creating a corporate culture is shifting from rules and regulations to a more positive, values-based code. Your code should inspire principled performance and give employees a reliable guide for ethical decision-making.

    Start by identifying the values that currently exist in your workplace. Do these values promote a culture of happy, motivated employees who provide extraordinary service to your clients and customers?

  3. Unleash your creativity. Unless you make ethical behavior top-of-mind on a consistent basis, employees are likely to forget about ethics as soon as they walk out of the training room. Instead, find new ways to deliver your message. For example, use clips from well-known movies to spark discussion. Try The Insider, Wall Street, or A Few Good Men. Use ethics games that will inspire employees to speak and think about ethical issues because they are having fun in the process.

Ethics and profits are not mutually exclusive. Writing in Bloomberg-Business Week, Vivek Wadwha cites the example of Costco, widely recognized as an ethical company. Costco is evidently surviving the current recession admirably, while outperforming rivals such as Target and WalMart. Wadwha says:

“When a company’s ethical compass is pointing true north, everything else falls into line. This isn’t to say that companies with great ethics don’t fail. But it does seem to indicate that companies without good ethics are far more likely to fail due to their inability to sustain or hear an inner voice to guide them through the dark times to the light.”

To learn more about how create an ethical culture within your company, read these articles: The Impact of Codes of Conduct on Corporate Culture and “Do the Right Thing” by Kathryn Tyler in HR Magazine.

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