WSM RESPONSIBILITIES & ETHICS

WSM RESPONSIBILITIES & ETHICS Moral principles that govern a person's or group's behavior WorkSource Montgomery’s moral obligations and direct professional duties and conduct of behavior

Purpose • To develop an understanding of the use of ethics as part of organizational practice • Conflict of interest is one part of ethical practice. • Conflict of interest policies are designed to foster public confidence in the integrity of the organization and in public officers and employees. • They are designed to assure citizens that the judgment of public officers and employees will not be compromised or affected by inappropriate conflicts.

CULTURE OF ETHICAL BEHAVIOR • Employee surveys suggest that many American workplaces fail to foster a culture of integrity. Results vary but generally indicate that between about one-quarter and three-quarters of employees observe misconduct, only about half of which is reported. • In the 2007 National Nonprofit Ethics Survey, slightly more than half of employees had observed at least one act of misconduct in the previous year, roughly the same percentages as in the for-profit and government sectors. • Nearly 40 percent of nonprofit employees who observed misconduct failed to report it, largely because they believed that reporting would not lead to corrective action or they feared retaliation from management or peers.

Public confidence in nonprofit performance is similarly at risk. A 2008 Brookings Institution survey found that about one third of Americans reported having “not too much” or no confidence in charitable organizations, and 70 percent felt that charitable organizations waste “a great deal” or a “fair amount” of money. • Only 10 percent thought charitable organizations did a “very good job” spending money wisely; only 17 percent thought that charities did a “very good job” of being fair in decisions; and only one quarter thought charities did a “very good job” of helping people. • Similarly, a 2006 Harris Poll found that only one in 10 Americans strongly believed that charities are honest and ethical in their use of donated funds. Nearly one in three believed that nonprofits have “pretty seriously gotten off in the wrong direction.” • These public perceptions are particularly troubling for nonprofit organizations that depend on continuing financial contributions.

Addressing these ethical concerns requires a deeper understanding of the forces that compromise ethical judgment and the most effective institutional responses. • Ethical challenges arise at all levels in all types of organizations—for profit, nonprofit, and government—and involve a complex relationship between individual character and cultural influences. Some of these challenges can result in criminal violations or civil liability: fraud, misrepresentation, and misappropriation of assets fall into this category. • More common ethical problems involve gray areas—activities that are on the fringes of fraud, or that involve conflicts of interest, misallocation of resources, or inadequate accountability and transparency.

FACTORS THAT INFLUENCE ETHICAL CONDUCT • Research identifies four crucial factors that influence ethical conduct: • Moral awareness: recognition that a situation raises ethical issues • Moral decision making: determining what course of action is ethically sound • Moral intent: identifying which values should take priority in the decision • Moral action: following through on ethical decisions.

ETHICAL CONDUCT • Another important influence is ethical climate—the moral meanings that employees give to workplace policies and practices. • Organizations signal their priorities in multiple ways, including the content and enforcement of ethical standards; the criteria for hiring, promotion, and compensation; and the fairness and respect with which they treat their employees. • People care deeply about “organizational justice” and perform better when they believe that their workplace is treating them with dignity and is rewarding ethical conduct. Workers also respond to moral cues from peers and leaders. Virtue begets virtue, and observing integrity in others promotes similar behavior.

Core Values We believe in and are passionate about the following shared principles, beliefs and priorities.... • LEADERSHIP. We will have the courage to lead from the front and shape the future. We believe in our role as stewards of the public trust and the future of the people we serve. • CHANGE. We believe in bringing to bear all relevant talents and resources to provide opportunities for our customers to succeed and thrive, one person and one business at a time. • SERVICE EXCELLENCE. We will give the best and world class service and achieve excellence each passing day. • INTEGRITY. We believe in living our values every minute of every day. We believe in doing the right thing right the first time for our customers and always honoring our commitments.

Ethical Issues in the Nonprofit Sector There are six areas in particular where ethical issues arise in the nonprofit sector: • compensation; • conflicts of interest; • publications and solicitation; • financial integrity; • investment policies; and • accountability and strategic management.

When does a conflict of interest exist? • Not a ‘conflicting interest’ • Person in a position requiring the exercise of judgment • Special interests that might interfere with the exercise of that judgment • Financial interests • Family connections • Prior relationships

Conflict of Interest Policy Applies • To all Board Members • To all committee members, • To all advisory groups • Employees of the organization

WHAT ARE MY RESPONSIBILITIES • To consider all actions being taken by the board (and it’s committees) in light of whether you may have a conflict – real or perceived • To disclose – whether you think it is an actual conflict or not • Not to exert influence regarding any decision making regarding an action

Responsibilities • Not to participate in any discussion regarding the action • To report problems or allegations of conflict of interest or misconduct made about a Board Member • To act in good faith to serve the public interest, trust, and public good.

Conflict of Interest Includes: • An action by the board that might result in a gain for you personally and one in which you have a personal interest • An action by the board that might result in your having a personal interest in a contract • An action by the board that might result in your having a personal interest in a transaction.

Conflict of Interest Includes: • An action by the board or staff that might result in a gain for any member of your immediate family (e.g., a spouse and any other person residing in the same household as the officer or employee, who is a dependent of the officer or employee or of whom the officer or employee is dependent).

Conflict of Interest Includes: • An action by the board that might result in a gain for a dependent (e.g., means a son, daughter, father, mother, brother, sister, or other person, whether or not related by blood or marriage, if such person receives from the officer or employee, or provides to the officer or employee, more than one-half of his financial support).

Current Conflict of Interest Policy Conflict of interest, real or perceived, will not be tolerated. Any duality of interest or real or perceived conflict of interest on the part of any Workforce Development Board (WDB) members, staff and vendors shall be disclosed to the Chair of the WDB or the Executive Director and made a matter of record, when the interest becomes a matter of Board action. A member must publicly declare that a possible conflict of interest exists before the agenda item in question is introduced. A member must disclose the nature of the conflict. The person chairing the meeting will then acknowledge the declaration. Members involved in an acknowledged conflict of interest must refrain from all discussion and abstain from all voting relative to the affected agenda item. The minutes of the meeting shall reflect that a disclosure was made and the abstention from voting and the discussion. The conflict of interest policy shall be reviewed annually at a meeting of the Board to provide information and guidance to the members. Any new members of the Board shall be advised of the policy upon entering the duties of his/her office. The full policy is a handout for this training: Policy Number: 2012 - 18

MD Governance of Conflict of Interest • http://ethics.gov.state.md.us/Pages/Boards%20%26%20Commissions.htm • http://www6.montgomerycountymd.gov/mcgtmpl.asp?url=/content/exec/boards/policy.asp • Montgomery County Ethics Commission • http://www.montgomerycountymd.gov/ethics/ • The Ethics Commission exercises authorities granted to it under the Public Ethics Law to promote the public’s trust of County government and to ensure the impartiality of County employees, including elected officials, in the execution of their responsibilities.

From the Federal Register: August 11, 2000 (WIA Final Rule) • (4) In addition to the requirements at 29 CFR 95.42 or 29 CFR 97.36(b)(3) (as appropriate), which address codes of conduct and conflict of interest issues related to employees: • (i) A State Board member or a Local Board member or a Youth Council member must neither cast a vote on, nor participate in any decision-making capacity, on the provision of services by such member (or any organization which that member directly represents), nor on any matter which would provide any direct financial benefit to that member or a member of his immediate family. • (ii) Neither membership on the State Board, the Local Board, the Youth Council nor the receipt of WIA funds to provide training and related services, by itself, violates these conflict of interest provisions. • http://www.doleta.gov/Seniors/other_docs/finalrule.pdf

WIOA Section 107: Local Workforce Development Boards • (h) CONFLICT OF INTEREST.—A member of a local board, or a member of a standing committee, may not— (1) vote on a matter under consideration by the local board— • (A) regarding the provision of services by such member (or by an entity that such member represents); or • (B) that would provide direct financial benefit to such member or the immediate family of such member; or (2) engage in any other activity determined by the Governor to constitute a conflict of interest as specified in the State plan.

WIOA Section 102: Unified State Plan • (E) ASSURANCES.—The unified State plan shall include assurances— (i) that the State has established a policy identifying circumstances that may present a conflict of interest for a State board or local board member, or the entity or class of officials that the member represents, and procedures to resolve such conflicts;

Institutionalize an Ethical Culture. • In its National Nonprofit Ethics Survey, the Ethics Resource Center categorizes an organization as having a strong ethical culture when • top management leads with integrity, • supervisors reinforce ethical conduct, • peers display a commitment to ethics, and • the organization integrates its values in day-to-day decision making. • In organizations with strong ethical cultures, employees report far less misconduct, feel less pressure to compromise ethical commitments, and are less likely to experience retaliation for whistle-blowing. • This survey is consistent with other research, which underscores the importance of factoring ethical concerns into all organizational activities, including resource allocation, strategic planning, personnel and compensation decisions, performance evaluations, auditing, communications, and public relations.

Policy that Should be in Place • A Code of Ethical Conduct for signature by each Board Member • A set of procedures that includes: • Duty to Disclose (how and to whom; all material facts regarding the conflict are public) • Determining Whether a Conflict of Interest Exists • Consequences of the Existence of a Conflict of Interest

Duty to Disclose: Operating Guidelines: Ethics (page 10) With certain specific exceptions, as a member of the Workforce Investment Board, you are subject to the Montgomery County Public Ethics Law, including the provisions related to conflicts of interest. The Montgomery County Public Ethics Law is found in Chapter 19A of the Montgomery County Code and the conflicts of interest provisions are in Article III of that chapter. The law prohibits a Board member from participating in matters which the Board member or his or her immediate family has an economic or fiduciary interest. You should refer to the Code for a detailed definition and explanation of when a conflict exists. Any Board member who has a conflict of interest or believes that they may have a conflict of interest must disclose that conflict and abstain from any discussion or vote on the issue. In the event a question arises about a conflict or any other ethical issue involving the Board, the matter may be referred to the Ethics Commission of Montgomery County for an opinion.

WDB Operating Guidelines (con’t) The Workforce Investment Act also provides that a member of a local board may not: a) vote on a matter under consideration by the local board: • i. regarding the provision of services by such member (or by an entity that such member represents); or • ii. that would provide direct financial benefit to such member or the immediate family of such member; or b) engage in any other activity determined by the Governor to constitute a conflict of interest as specified in the State Plan. ABSTENTION FROM DISCUSSION OR VOTING • No Board member or committee member may vote or participate in discussions on decisions or other matters that would involve the member in a conflict of interest. DISCLOSING CONFLICT OF INTEREST • Any Board member who has a conflict of interest or believes there may be the appearance of a conflict of interest must disclose such a conflict prior to any vote or discussion on an issue where a conflict or apparent conflict may exist.

Decisions on Conflict of Interests from Operating Guidelines • A member who has not revealed a conflict of interest or who has not removed himself or herself from discussion or voting due to conflict of interest must be given an opportunity to explain his or her position to the Board. If the question is not resolved to the satisfaction of the Commission, the matter will be referred to the Ethics Commission of Montgomery County.

WSM RESPONSIBILITIES & ETHICS