Ethics in the Workplace Can Be Complicated
I have blogged many times before about the importance of having a code of ethics in business that promotes an ethical culture. A code of ethics is needed to memorialize the firm’s commitment to ethical behavior. It also details the ethical expectations of the organization and should address relationships between the stakeholders and identify outlets to report wrongdoing.
An ethical culture is important because it establishes the ethical tone at the top. Top management should set an ethical tone to get employees’ commitment to ethical standards. One way of looking at it is for top management to “walk the talk” of ethics. Additionally, it’s important for the compliance function to follow suit and support ethical standards.
I recently read a piece on the FCPA blog by Caterina Bulgarella that reports on a study completed in collaboration with SAI Global about the existence and scope of ethics codes. One finding is that “companies …are not neglecting all the design elements needed for the code to successfully influence the organization’s ethical orientation and culture. But… they fail to go all the way..."
The missing links seem to be related to a lack of clarity and key levels of accountability with respect to the need to strengthen “the organization’s ethical capacity by increasing ethical ownership, ethical reasoning, and ethical voice.” According to Bulgarella, these ethical components are three of the fundamental six pillars of a culture low on conduct risk.So, what do these factors mean and why are they so important to an ethical culture? Here’s what the report says:
“Ethical ownership refers to the responsibilities, goals, and roles that have been created around an organization’s ethics. Ethical reasoning underscores the conditions that help people engage in sound ethical decision-making. Ethical voice encompasses employees’ access to and level of control over organizational processes created to report unethical behavior and speak out.”
I’m most concerned with ethical voice in this blog because less is known about it than codes of conduct and ethical culture. Ethical voice goes beyond mere access to organizational processes. It is the way in which employees express their point of view. The key is what an employee can do to stand up and report wrongdoing in a way that encourages others to support their position.
A popular way to express one’s point of view to influence others and, hopefully, stop unethical reporting in its tracks is “Giving Voice to Values (GVV)”. GVV takes the position that when differences exist between an employee and supervisor, the employee needs to develop strong arguments by reframing the issue, finding enablers to help along the way, and effectively respond to the reasons and rationalizations sometimes given to accept a supervisors’ unethical position.
Here’s a brief example of using GVV. Assume a consulting manager in the advisory services department is being pressured by the head of the department to promote the firm’s software package to a client even though an outside firm’s package better meets the client’s needs. The manager has chosen the package of an outside tech company. What can the manager say or do to change the mind of the supervisor?
The first step for the manager is to identify potential supporters in the office, perhaps a higher-up in the advisory services area. There are by others in the firm to go to such as a mentor or someone in the Ethics and Compliance office.
Most important is to reframe the issue in a way that convinces the supervisor to go along with the recommendation of the manager. The manger can point out that if the firm’s package is selected and something goes wrong with it (i.e., it doesn’t do what it is supposed to do), then the firm will be in big trouble with the client. The client won’t be happy that the firm’s package was selected and it failed to meet expectations.
The firm compromised its integrity by not selecting the best product for the client. All trust may be lost in the firm. The client may fire the firm and if other services are provided, such as assurance services, the firm may lose those as well.
Finding your ethical voice means standing up for what you believe to be right regardless of the consequences. It takes moral courage but is the only way to keep your moral balance and avoid sliding down the proverbial ethical slippery slope.
Posted by Steven Mintz, aka Ethics Sage, on August 22, 2019. Steve recently published a book titled Beyond Happiness and Meaning that explains the ethics of personal relationships, workplace interactions and on social media activities. Visit Steve’s website, sign up for his newsletter, and buy his book on Amazon. Follow him on Facebook and “Like” his page.