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Ethics: An Epidemic?

Author: Judi Newman

You’ve seen those headlines about unscrupulous corporate executives cooking the books. The passage of the Sarbanes-Oxley Act is supposed to have forced many employers to take the ethical temperature of their workplace. It is coming as no surprise that what they're finding is an outbreak of seemingly innocent, yet clearly inappropriate, workplace behaviors — such as lying about the reasons for missing work, falsifying time cards, and stretching expense accounts — that are often a breeding ground for unethical conduct.

It is important to recognize that such behaviors exist and to take time to take appropriate steps to keep them from spiking into an illegal fever. Recently companies have taken steps to not only treat, but also inoculate their companies against, the ethical epidemic. Here are some steps you can implement for encouraging ethical behavior and preventing ethical disasters in your organization.

Take the ethical pulse of your workplace. Conduct surveys that ask employees how they would react to hypothetical scenarios. Or ask questions based on the company's ethical standards (if there are none, it may be time to get them done); then solicit employee opinions as to whether they agree or disagree.

Get the support of top management. Stress the importance of ethics to your company by asking the company president to write a letter or memo expressing the company's commitment to ethical behaviors. Distribute the memo to employees or include it in an ethics guidebook.

Enforce by committee. Create an ethics committee that is responsible for compliance with your ethics policy and/or code of conduct. Select committee members that have a high level of credibility with rank-and-file employees.

Go public with your commitment to ethical conduct. Release an annual report of ethical challenges faced by the company or accomplishments achieved. Post it on your website.

Get the word out. Constantly communicate with employees about the importance of ethical behavior. Train managers and supervisors to communicate the company's goals and expectations to employees on a regular basis.

Measure success. Establish a simple system to gauge whether or not your employees are walking the ethical walk. For example, audit the number and type of complaints filed or disciplinary warnings handed out.

Practice what you preach. Creating and distributing a code of ethics will have little effect if employees witness higher-ups engaging in behaviors the code clearly prohibits.

  • Is it time to encourage management employees to take an objective look at their own behavior. Have them pose the following questions to themselves. Am I always scrupulously honest in my dealings with employees? Even little white lies that are meant to spare an employee's feelings or to make a negative situation seem more positive can set an unethical example. Resist the temptation to sugarcoat the details when having to deliver bad news.

  • Do I take office supplies home or use company products for personal advantage? You may think nothing of grabbing a box of staples or making copies of personal documents. But if employees see you dipping into the stock room, they might feel entitled as well. What may have started out as grabbing one box of supplies every now and again can turn into empty stockroom shelves and the company having to spend more money on supplies.

  • Do you treat your employees professionally and with respect? Everybody has his/her bad days. But snapping at employees or talking down to them out of frustration not only leads to morale problems, but it also shows employees that it is okay to behave that way themselves.

  • Do you take extended lunch hours or breaks? Do you come into work late or leave early often? Just because you're the manager doesn't mean you have the right to come and go as you please. If you disrespect the value of time to your company, so will your employees. Then, those who see their manager taking extra time away from the office are bound to resent it, and may start extending their time as well.

  • Do you spend a lot of time on personal calls or taking care of personal business during work hours? Don't expect your employees to keep their private lives at home if you don't.

A Code of Ethics

A code of ethics (or an ethical policy, code of conduct, a statement of business practice or a set of business principles) can be a management tool for establishing and articulating the corporate values, responsibilities, obligations, and ethical ambitions of an organization and the way it functions. It provides guidance to employees on how to handle situations, which, pose a dilemma between alternative right courses of action, or when faced with pressure to consider right and wrong.

No two codes will be the same. They must reflect the concerns of the management and employees of the particular organization and the context of the relationships and business environment in which it operates.

Having a code of conduct is not enough, however. It can only be effective and practically useful with committed communication, implementation and monitoring at all levels so that the behavior of the entire organization is influenced. 

By Judith H. Newman, President of Phaze II Consulting, Inc. Judi has worked on site with hundreds of agents across the nation on a variety of consulting projects. Phaze II Consulting, Inc. provides consulting services to independent insurance agencies in matters of management issues, operations, planning, valuations and customized projects for individual clients.

Contact Judi Newman at 800-438-7566 or for additional information on the E&O loss prevention audit for your agency. Find out how this audit can help your agency save on your next renewal. Judi is a certified E&O loss prevention auditor for IIABA and Westport and can conduct the external E&O loss prevention audit for your agency.

Copyright © 2007 By Phaze II Consulting, Inc.

All rights reserved. No part of this article may be reproduced in any form or by electronic or mechanical means without permission from the publisher.

Reprinted with permission by IIABA's Virtual University.

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