THE PROCESS OF DEVELOPING A CODE OF ETHICS
The process of developing a code of ethics begins with company self-examination to identify values held by individuals and alert everyone to inconsistencies in how people deal with particular issues. For a new company, this means getting the founding team together to discuss how certain issues should be dealt with. For a larger company, forming a committee to oversee the process may be appropriate. The following are a list of ethical values that should be considered in any code of ethics.
Trustworthiness: Loyalty, honesty, integrity
Respect: Privacy, dignity, courtesy
Responsibility: Accountability, pursuit of excellence
Caring: Compassion, kindness, giving, consideration
Justice and fairness: Consistency, equity, due process, equality
Civic virtue and citizenship: abiding by laws, community service, protection of environment
A code of ethics should outline the behaviors that would allow the business to display these characteristics. This can be accomplished by asking four questions about any ethical decision to make:
- Will the action taken result in the “greatest good for all parties involved”?
- Will the actions respect the rights of all parties?
- Are these actions just? Will anyone be hurt by all the actions?
- Would I be proud if my actions were announced in my local newspaper?
The last question gets to the heart of how one determines what is ethical in any situation, and most people can immediately and intuitively answer it.
Characters of an Effective Code
The most effective code of ethics will have the following characteristics. The code and its attendant policies will be clear and easy to understand. Details about special situations that need further explanation will be included (for example, political factors in certain countries). In cases where employee judgment may be required, description and examples will make it easier for the employee to make the decision.
Entrepreneurs should make sure that all employees are aware of and understand the code as well as the values and culture of the company. The following are some guidelines for ensuring that the code of ethics is implemented and maintained over time.
- Entrepreneurs should model the behavior expected of others in the company. In some companies, the ethical behavior exhibited by managers and employees in tough situations can become legendary – a part of the company culture that people remember and speak about with pride over and over again.
- Employees should be educated about ethics through workshops that put employees in hypothetical situations. For example, “What would you do if you found out that your best customer was harassing your administrative assistant”?
- Entrepreneurs should demonstrate commitments to the ethics program by mentioning it on a regular basis and providing examples of appropriate behavior that employees display during the course of their work.
The code of ethics should be shared with customers so that they all understand the company’s commitment and are assured of its integrity. A clear channel for reporting and dealing with unethical behavior should exist, and there should be a means of rewarding ethical behavior through recognition, bonuses, raises, and so forth.
Once a sound code of ethics and business practices has been developed, some steps must be taken to ensure that the established standards become part of the company’s culture, and as the leader of the company, the owner needs to be the role model for ethical behavior. There is no way to avoid the ethical problems that business brings. But developing a strong ethical code and enlisting the cooperation of everyone in the business will go a long way toward making those problems easier to deal with.
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