Comprehensive corporate ethics programme

organisations can use to propagate responsible business conduct and appropriate workplace behaviour in an organisation.
A comprehensive ethics programme has five components, and together these components express the best practice principles set out in global benchmarks such as the US Federal Sentencing Guidelines for Organisations (FSGO, 1991, 2004) , the US Sarbanes Oxley Act( 2002, 2004), The King III Corporate Governance Report, SA (2009), the UK National Code on Corporate Governance (2010), the State Enterprises and Parastatals Corporate Governance Framework, Zimbabwe (2010), and many other best practice corporate governance blueprints. The CBEMP requires organisations to:
Commit
Company executives and senior management should commit themselves to the organisation’s ethics management programme. Company Boards sit at the apex of their organisations’ hierarchical order, and together with company senior management, their business conduct, good or bad, has a strong influence on everyone else in the organisation including the firm’s external stakeholders.
They steer the ship, and any corporate misdemeanours perpetrated by company leaders has a serious permeating effect on the employees’ ethical and business conduct across all company operations.
They set the ethical tone at the top and provide oversight on the ethics programme. They exemplify ethical behaviour through words and deeds, and all others involved with the firm look up to them for guidance.
They serve as role models. Senior executives have the paramount responsibility to embed ethical behaviour into the culture of the company so that it is mirrored in the firm’s DNA and determines the firm’s pulse.
Visible commitment by the board and senior managers helps keep the organisation on track to progress from just having a documented commitment to business ethics to creating an organisational culture where ethics is a central consideration in business decisions across all levels and operations of the organisation.
Assess
Management should be able to measure the organisation’s ethical effectiveness and ethical culture. When an organisation establishes its ethics infrastructure, it is important that the process of implementing the ethics programme and its expected outcomes are evaluated periodically to ensure the programme’s success.
Many organisations that have a stand alone code of ethics to manage the ethics environment have never bothered to follow up on it to see whether the code serves its purpose.
Codes have in such cases tended to gather dust in offices without being used as tools to give guidance to staff on ethical issues in the organisation. Such a scenario is obviously as a result of the absence of a well defined programme evaluation process to check programme effectiveness.
An effective evaluation process may take the format of known and common organisational process evaluation models like the renowned International Organisation for Standardisation (ISO) management systems for quality articulation.
The ISO standards examine whether processes that lead to quality goods and services have been followed and this is what an ethics process evaluation tool should achieve.
The whole evaluation process should be inspired by the need to ensure the ethics programme’s success, which will then feed into the organisation’s bottom line.
Management best practices decree that it is irresponsible and unprofessional for organisations to dedicate significant management attention and company resources to any programme without evaluating its performance to determine whether it is a worthwhile effort.
Codify
Companies should develop a Code of Ethics. A code of ethics is basically a set of company values and beliefs that is intended to guide management and employees in making sound ethical decisions and ensuring responsible business conduct in order to achieve a professional and productive work environment.
It is the primary means through which organisations give guidance for its employees on what is expected of them, and it is the lever upon which the ethics programme should be anchored.
It codifies the standards of ethical behaviour expected of employees and the values to which all members of the organisation commit themselves to uphold when conducting company business.
The ethics code is meant to address a variety of issues in the organisation that include the work environment, gender relations, employee management relationships, conflict of interest, financial practices, etc.
Formalise
The business ethics management process needs to be formalised by setting up formal ethics structures, such as an ethics office with an ethics officer, ethics committee, ethics training, ethics communication systems, and ethics reporting mechanisms.
Integrate
Management should make the formal structures work efficiently and build an ethical culture that legitimises ethics discourse and conduct.
The process should start with a clear understanding of the existing culture that ensures that management knows exactly what needs to be changed.
A scientific scan of the existing culture is most ideal and through it many pertinent issues in ethics management are brought out in the open.
For example in a situation where employees perceive that management ‘shoots the messenger’, critical information that management may want often gets stuck at the lower organisational levels and will never reach the top.
In reality organisations may only have all or some of these components in place. Developing a comprehensive ethics programme should, however, not require a whole new layer of bureaucracy.
It should be a cross-functional facility tapping into existing resources and structures, and involving all organisational units.
Ethical responsibility should be located in every member of the firm and not merely in a dedicated organisational function like Human Resources.
A comprehensive ethics programme is an aspect of corporate governance best practices.
It is a legal and ethical misconduct prevention and detection strategy, or risk management intervention to combat theft, fraud, corruption, illegitimate gains arising from conflicts of interests, etc.
l Bradwell Mhonderwa is the Managing Consultant of Business Ethics Centre, a Corporate Governance and Business Ethics Management firm. Phone 04293 2948, 0712 420 090, 0912 913 875, or email [email protected]