|
 |
 |
| Publications: Ethics Today Archives |
|
|
|
|
|
=================================================
Ethics Today Online Published
by the Ethics Resource Center =======================================================
**************************************************************************** ** A Word from the President:
Avoiding the Placebo Effect **************************************************************************** ** A Word from the President: Avoiding the Ethics Placebo Are ethics codes to organizations like taking a sugar pill is to a headache? That is, do they have any real impact or do they just make organizational leaders feel better because they "did something about ethics"? This is a tough question, and the less-than-satisfactory answer is: it depends. We are living in the back draft of Enron and WorldCom. The U.S. Congress overwhelmingly passed the Sarbanes-Oxley Act of 2002 and created the Public Accounting Oversight Board. Nasdaq and the New York Stock Exchange have created new ethics standards, as has the mutual fund industry. The U.S. Federal Sentencing Commission this month issued new proposed organizational sentencing guidelines detailing and refining what will be considered a legitimate ethics program. (See related story in this issue.) Many nations from Japan to Brazil, from Italy to South Africa now mandate ethics programs for organizations. At the heart of much of this policy-making is a demand for ethics codes or standards of conduct. Unfortunately, less attention has been paid to what constitutes a legitimate code of ethics or set of standards. Many organizations, public and private, opt to take a code "off the shelf," literally adopting a code developed by and for another organization. A popular variation on the theme is the marketing of generic codes, which have been touted as making an organization "Sarbanes-Oxley compliant." The Ethics Resource Center (ERC) has always been an advocate for effective ethics codes, but the way many of these codes are being developed is disturbing. The ERC's research and experience identify some obvious problems with a "one size fits all" approach and with generic codes designed to "make an organization compliant" with a particular law. None of our experience has shown that two organizations, regardless of their similarities, can use each other's code. Ethics codes are, or ought to be, culturally driven, and they must take into account each organization's unique product line, management structure, founding vision, and culture. A good code is developed from within the organization, engaging employees at many levels, to ensure that it has both meaning and "buy-in." Expecting a code developed by another company or pulled from a shelf to suffice is not only naïve but dangerous. In fact, in some cases, adopting a code from another source can actually create ethical vulnerabilities. The "inoculation model" in which an organization focuses on being merely compliant is almost as dangerous, in that it will often create a "check the box" mentality. Of course a code should comply with the law, but that law should provide a starting point, not the end product. The true goal is to create a culture of ethics. Finally, our research emphasizes that an ethics code by itself is not a panacea. The National Business Ethics Survey 2003 (NBES 2003) found that, in order to be effective, codes need to be part of a broader ethics system. Ironically, the study found that "In terms of pressure that employees feel, having only written ethics standards in an organization appears no better (and perhaps worse) than the absence of any formal program elements." (p. 37) Codes can be so much more than sugar pills. Done properly, they not only work to cure but can help to prevent unethical conduct. Organizations must go beyond mere compliance and make their codes into living documents that cement their ethical culture. Without that integration, a code of ethics will simply be another piece of wallpaper in the office and there is a good chance we will be visiting another Enron in the not so distant future. And, if that happens, we will wake up with a worse headache than ever before. Stuart Gilman, President ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ If you want to tailor your document to your organization and are willing to invest time gathering baseline data (for future use in evaluating your code's effectiveness), the process of writing your code requires fifteen steps, loosely divided into the following overarching phases. There are other models possible, but the steps outlined below provide critical guidance necessary for a comprehensive effort with measurable outcomes. Planning the Work Effort
Collecting Data
Writing the Draft Code
Specifying Reporting and Enforcement Mechanisms
Having the Code Reviewed
Obtaining Board Approval
Choosing Communication and Education Strategies
Scheduling Code Updates and Revisions
All of the steps above are described in more detail in the ERC's 2003 publication "Creating a Workable Company Code of Ethics." The publication also explains the need for and roles of an ethics code, identifies six basic decisions an organization needs to make before writing or rewriting a code of conduct, and lists and discusses the various recommended parts of a code. In addition, "Workable Code" contains an extensive appendix which provides information about standards and legislation, sample data collection question sets, definitions of values, a glossary, a code of ethics development process checklist, and guidance on communicating ethical commitment and writing code provisions. Read more about or order, "Creating
a Workable Company Code of Ethics" at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The following links lead to examples of codes used by some of the organizations that have been associated with the ERC in some capacity. All of the organizations post their codes online and have granted permission for the ERC to link directly to them in this newsletter. By including these codes, we do not intend to endorse or recommend them for your organization, only to provide a sampling of a variety of codes that have been tailored for their particular organizations. As Dr. Gilman states in his column, "None of our experience has shown that two organizations, regardless of their similarities, can use each other's code. Ethics codes are, or ought to be, culturally driven, and they must take into account each organization's unique product line, management structure, founding vision, and culture." The need to account for each organization's specific needs is visibly demonstrated by the huge difference in the lengths of the following codes, which range from under 40 words to over 55 pages. -- Merck From the Introduction: "At Merck, our values and standards have always formed the basis of our success. They inspire trust and confidence on the part of the medical community, government officials, regulatory agencies, financial markets, our customers and patients -- all of whom are essential to our success. Even more important, these values inspire the trust and confidence of Merck employees--creating a sense of pride and a desire in each of us to achieve great things at Merck."
From the Letter from the CEO and the President: "It summarizes the principles that guide our actions in the global marketplace as we strive to be the world's finest technology and systems enterprise. Our Code applies to all Lockheed Martin employees, members of the Board of Directors, agents, consultants, contract labor, or others, when they are representing or acting for the corporation. We expect our contractors and suppliers to be guided by these standards as well. Our Code promotes not only "doing things right," but also "doing the right things" to maintain our personal and institutional integrity."
From the President's letter: "The Code was written entirely by SHRM members and volunteer leaders with the assistance of the Ethics Resource Center (ERC) and SHRM staff.... Hundreds of members and leaders shared in the process through focus groups and individual interviews representing a cross-section of our membership, participation on code development teams, and by providing feedback on code drafts.
From the Website: "Our core values of honesty, integrity and respect for people define who we are and how we work. These values have been embodied for more than 25 years in our Business Principles, which since 1997 include a commitment to support human rights and to contribute to sustainable development. The Principles apply to all Shell employees everywhere. We go to great lengths to ensure they are implemented in all Shell-operated companies. We also actively promote our Principles with joint venture partners, contractors and suppliers."
From the Code: "This Code provides principles to which members are expected to adhere and advocate. They embody rules regarding individual and peer responsibilities, as well as responsibilities to employers, the public, and other stakeholders."
"Character Education is a process of awareness and focus. At Lake Braddock Secondary School, we work to reinforce the values of our community with examples of appropriate behavior and an awareness of our values throughout the educational process."
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Globalizing a Code of Ethics There are an untold number of issues to be addressed when a domestic or multinational corporation seeks to maximize its ethics and compliance program in its operations abroad. In this article, Associate Consultant Cherie Raven discusses some of these issues, including translation of the code, use of examples, policies and procedures relevant to the local business climate, adaptation of training and communications to the local context, local access to anonymous help line and incorporation of international perspectives in the central ethics committee / taskforce. Read the full article at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Joint Comment Letter: Advisers' Codes of Ethics The ERC and the Washington, D.C. office of Thelen Reid & Priest LLP submitted a joint comment letter to the SEC regarding the Commission's efforts concerning advisers' codes of ethics. The ERC and Thelen Reid offered four comments with respect to the code of ethics requirements under consideration, which were summarized as follows:
The comment letter continues with more in-depth discussion of each comment, along with some background on adviser ethics and the purpose of codes. Read the comment letter at: The ERC/Thelen Reid comment letter was also the focus of the lead story, "Ethics Resource Center Comments on Codes of Ethics for Advisers," in the April 15 issue of SEC Today. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Ask the Expert: When Personal Values Clash with Organizational Business How do you deal with a situation when an employee's personal values clash with the legitimate business of an organization? The nice thing about this question is that it is as old as antiquity, write ERC President Stuart Gilman and Senior Consultant Jeff Salters. They note, however, that the problem with the question is that it is not easily addressed or resolved. Conflicts often arise between ethical obligations in the roles we play (job, friend) and our personal values. The question is how to best resolve these questions within an ethics framework that makes sense. In order to help readers understand what this framework can look like, the authors focus on different types of ethical issues and discuss solutions for both employees and their managers. Read the full response to this question
at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** ERC, TEDMER & World Bank Host Ethics and Anti-Corruption Meetings The Turkish Ethical Values Foundation (TEDMER), in association with the ERC and the World Bank, hosted two ethics and anti-corruption meetings in Istanbul, Turkey, on March 24-26, 2004. On March 24, the groups held a one-day conference entitled "Toward a National Dialogue on Integrity Issues: Roles of the Public, Private, and Civil Society Sectors in Promoting a National Integrity Agenda in Turkey." This conference followed a successful December 2003 meeting on business ethics that was attended by more than 300 Turkish business leaders. The March 2004 conference focused on strategies for cross-sector collaboration to promote a national integrity agenda in Turkey. On March 25-26, the "Forum for a Global Integrity Alliance" brought together ethics and anti-corruption practitioners from over 20 countries. Participants included delegates from current and prospective ethics and anticorruption NGOs, along with representatives from multinational corporations, intergovernmental institutions and multilateral organizations. The meetings were made possible by generous support from the Merck Company Foundation and the World Bank. Executive summaries from both meetings, agendas, a list of countries represented and a slide show of photos from the conferences are currently available on the ERC website. Additional materials may be added as they become available. Read more about the ethics and anti-corruption
meetings held in Turkey in March 2004 at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Sentencing Commission Toughens Requirements For Corporate Compliance And Ethics Programs At its public meeting April 8, 2004, the United States Sentencing Commission voted unanimously to amend the existing organizational guidelines to make more stringent the criteria for effective compliance and ethics programs. The Commission made the standards for the compliance and ethics program more rigorous and put greater responsibility on boards of directors and executives for the oversight and management of compliance programs. In particular, directors and executives now must take an active leadership role for the content and operation of compliance and ethics programs. Under the revised guidelines, if companies hope to mitigate criminal fines and penalties, they must also promote an organizational culture that encourages a commitment to compliance with the law and ethical conduct by exercising due diligence in meeting the criteria. Read the Sentencing Commission's press
release at:
In February 2004, ERC President Stuart Gilman, along with Robert J. Olson, Principal Consultant, Meta Ethics, and Michael Hoffman, Executive Director, Center for Business Ethics at Bentley College, submitted a letter to the U.S. Sentencing Commission suggesting additional changes to the Proposed Amendments to the Federal Sentencing Guidelines for Organizations. Read about those suggestions at: On March 18, 2004, the United States Sentencing Commission heard testimony from Ethics Resource Center Fellow and Vice President Business Practices, United Technologies Corporation, Pat Gnazzo on the proposed changes to the organizational sentencing guidelines at a public hearing in Washington, DC. Read about that testimony at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Teachable Moments: By Kids for Kids Sixth graders at Kings Glen Elementary School in Springfield, VA, are contributing their own stories about finding ethical solutions to challenging situations to the ERC's MAXIMize the Moment®, an online character education resource for schools, youth centers and families. With schools struggling with issues of violence, disrespect and cheating, the stories are an example of how schools are engaging students and integrating character education into school curriculum. Read the rest of this press release
at: Read more about MAXIMize the Moment
at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Publications and Media Coverage "Stadium roulette: MLB flirts with
Las Vegas as new home for Expos," SI.com, March 26 - "Web site dissects 'Apprentice' dilemmas,"
Salt Lake Tribune, April 5 "After the Hit, What Could Make a Driver
Run?" St. Petersburg Times, April 9 - Small biz not immune to scandal,
Chicago Business, March 26 - Several papers reprinted the February
25 Orlando Sentinel column, "Worries Over Just the Appearance of
Impropriety Are Causing Companies To Take a Closer Look at Potential
Conflicts of Interest," which was digested in the March 2004 Ethics
Today. In that article, columnist Harry Wessel says that conflicts
of interest aren't limited to high-ranking public officials or even
corporate executives. Employees at all levels often face conflicts
of interest, and even more routinely face "the appearance of impropriety."
ERC President Stuart Gilman suggests that companies need to "identify
conflicts of interest and what they look like to average employees." ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -- President Stuart Gilman spoke on Monday, April 5 at the National Press Foundation on, "Covering Ethics in Government." -- On March 30, ERC President Stuart Gilman and Associate Consultant Katie Sutliff participated in a listening session as a key activity of the Department of Education's newly formed Character Education and Civic Engagement Technical Assistance Center (CETAC). As participants, they offered suggestions on the following topics:
The goal was to provide insight into "the development of CETAC's publications and help CETAC and DOE staff better understand the types of assistance needed to effectively implement character education and civic engagement in" schools. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ As a non-profit organization, the Ethics Resource Center depends on contributions from many generous donors. Without their dedication and trust, many of the programs and projects highlighted in this newsletter would not be possible. The ERC thanks the following for their contributions of general support:
We invite you to join our loyal contributors
in lending your support. To find out how to contribute or to donate
online, go to: The Ethics Resource Center (ERC) is a non-profit, non-partisan educational organization exempt from taxation under the Section 501(c)(3) of the Internal Revenue Code. All gifts are tax-deductible to the fullest extent of the law. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ PLEASE NOTE: Ethics Today will be published 11 times this year, with the July and August issues combined into one. An index will be published at the end of August. ======================================================= Copyright (c) 2004 Ethics Resource
Center. All rights reserved. Please contact ethics@ethics.org for information about reproducing any of the information contained within this newsletter or on our web site. Back issues of Ethics Today are available online at: /today/et_archives.html For questions about your subscription, please email ethicstodayonline@ethics.org The Ethics Resource Center, 1747 Pennsylvania
Ave., NW, Suite 400 ======================================================= =======================================================
|
About ERC •
Advisory Services
•
Research
• Character
Education •
Resources
• News
•
Publications
• Fellows
• Support
ERC • Contact
Us
Ethics Resource Center,
1747 Pennsylvania Ave., NW, Suite 400, Washington, DC 20006
Telephone 202-737-2258 Fax 202-737-2227 E-mail ethics@ethics.org