Oliver: How to build a strong ethics program
By Carl Oliver
Some companies spend a lot on ethics programs, and some spend a little. Cost is not a good measure of effectiveness. Some expensive efforts have little effect, and some inexpensive efforts produce excellent results.
There are three rules to a strong ethics program. First, managers are responsible for knowing and complying with laws affecting their department’s work. That is part of knowing the business.
Second, managers are responsible for ensuring employees know the company expects them to be ethical. That is part of leadership.
Third, the company needs to foster safe, open communication. That is part of management. Anyone who suspects a problem needs to feel safe notifying managers. Managers need to receive and act on such information gracefully. That empowers the company to detect and solve problems while they are small and easy to handle.
Following those three rules should cost only a little time and very little money, but care should be taken to make sure the efforts are effective.
Mandatory computer-based business ethics training can be a waste of time. Companies often choose computer-based training to ensure and document that every employee completed the course and that it covered every important topic. That’s good evidence in court if the company gets in trouble with the law.
But the purpose of ethics training should be prevention. It should help employees make ethical decisions and, thereby, keep themselves and the company out of trouble.
The most experienced business ethics professionals say check-the-box, computer-based training is not sufficient. What gets good results is practice on issues employees are likely to encounter at their job. Practice sessions should be led by managers in a group setting, with coworkers interacting face-to-face.
Expertise is not required and there is no cost in time if managers lead practice sessions during normal staff meetings. The only monetary cost is for sheets of paper run through a copier.
Preparation is the key to success. Managers should write a dozen ethics situations their employees might encounter on the job. Examples include conflict of interest, a gift received from a supplier, falsified records, bullying and bribery. Human resources staff and the company lawyer can provide ideas. Write the situation on one side of a half-sheet of paper or card and the company’s answer on the other. Company experts should validate the answers. Gathered in groups of four to six, employees should divide in half and take turns asking each other how they would handle the situations and then review the answers. The sharing of people’s various points of view is a valuable part of the exercise.
Feedback from participants shows that employees enjoy the sessions and learn to recognize ethics issues in the real world and make good decisions. Most importantly, they learn to talk about ethics issues safely and are encouraged to do so when faced with real ethical decisions. This practice breaks down communication barriers that otherwise discourage employees from speaking up when they suspect they see something wrong.
Many companies operate ethics and compliance phone lines. Unfortunately, many refer to them as hotlines and they’re seen as a way to catch wrongdoers. The primary purpose should be to help employees prevent wrongdoing by making good decisions, and the name given to them should be help lines, assist lines or open lines to reflect this. Business ethics should be approached from a mentoring prospective to help employees do the right thing, not a police function to catch employees doing something wrong.
The name of the line influences how much it is used. Twenty years ago, a study showed hotlines received about four calls per 1,000 employees a year. Help lines or open lines received about 22 calls, and assist or advice lines got about 43. People think hotlines should only be used to report serious crimes or emergencies. People are reluctant to use it to ask questions or share discomfort or suspicions that only possibly indicate a problem.
The more employees talk about ethics, the better situated a company is to avoid problems. The best ethics program is one that provides an easy way for employees to raise questions or issues and get help resolving them.
• Carl Oliver teaches business ethics at California Lutheran University.