Business Ethics chapter 8

1. Business Ethics chapter 8 Developing an Effective Ethics Program

2. Effective Ethics Programs: Content • Responsibility & need • Effective programs • Program content • Codes of conduct • Ethics officers • Ethics training and communications • Monitoring and enforcing • Continuous improvement • Common mistakes

3. Responsibilities • Corporate citizens – rights and responsibilities • Corporate accountability • “Whatever it takes” • Close call decisions

4. Needs • 5 Situations • Day off w/ doctor visit • Future product price discussions • Taking confidential information • Lying on a mortgage application • Moving revenue

5. Needs • Building trust: • Making customers top priority • Personal responsibility and accountability • Communicating openly and often • Handling crisis honestly • Steadfast with codes of conduct *Golin/Harris International

6. Enforcement • Termination • Athletics vs. corporations

7. Strong Ethics Programs • Written code of conduct • Appointed ethics officer • Careful delegation of authority • Ethics training • Auditing, monitoring and enforcement • Continuous improvement • Placing ethics into corporate culture

8. FSGO • Carrot and stick approach • Okay, small and large stick approach… • Similar to ISO 9000 standards • Organization makes up its own program to document, instill, use and control predictability in employee behavior (ethics vs. quality) • Compliance vs. values

9. Codes of Conduct • Codes of Conduct – general term meaning formal statement of expected behavior • Code of Ethics – most comprehensive, describes program • Code of Conduct – set of rules, not a whole program • Statement of Values – bullet points of key principles or ideals • Good starting point for an ethics program

10. Ethics Officers • Relatively senior executives • Reports to CEO or board of directors • May be full time (very large company) or an additional duty

11. Ethics Officers - Responsibilities • Identifies existing and potential ethics issues – needs and risks • Oversees development and distribution of a code of conduct • Directs training • Establishes confidential reporting system • Insures compliance with laws • Monitors ethical conduct of members of the firm • Takes action upon violation • Continuous improvement to program

12. Ethics and Compliance Officer Association (ECOA) • Mission: To be the recognized authority on business ethics, compliance, and corporate integrity • Values: • Integrity • Confidentiality • Collegiality • Cooperation • Cost $950/yr. • www.theecoa.org

13. Ethics Officers • Most start without formal ethics training • 60% of board members have no formal ethics training • Opportunities of your teams!

14. Ethics Training • Organizations policies and expectations • Laws and regulations • General standards of conduct • Available resources (hot line, etc.) • Other support systems • Empowerment • Overview of ethical framework: corporate culture, relationship to co-workers and supervisors, opportunity

15. Ethics Training - Goals • Have everyone- • Recognize ethical situations • Understand values and culture • Be exposed to ethical decision making tools (Hosmer’s model, others) • Make ethical evaluations • Know resources and methods of dealing with potential unethical situations

16. Boeing • Values • Leadership • Integrity • Quality • Customer satisfaction • People working together • Diverse and involved team • Good corporate citizenship • Enhancing shareholder value

17. Ethics Training Summary • See table 8-4 page 221 • Note the firm is held responsible for the misconduct of its members • Vice – versa, too

18. Ethical Auditing • Role-playing (good for training, too) • Questionnaires • Corrective action • Ethics officer

19. Program Mistakes • Understanding the goals • No metrics in the objectives • Senior management commitment (a fish rots at the head first) • Communicate with the average employee • Dealing with international • Involvement of employees