12 Top Tips for
Writing a Code of Ethics for Your Business

by Joel Saltzman

 

What's the secret to discovering your company's rules for ethical behavior? Writing them down.

Through the process of writing, you'll discover your company ethics. In fact, the more you wrestle with "What are our rules?" the better prepared your company will be for making sound, ethical business decisions. To help craft your ethical rule book:

1. Choose Your Drafters (Carefully)

Just as the drafting of the United States Constitution was not left to just anyone, you'll need to decide (carefully) on who your drafters will be. Will you create a special committee, or will everyone in the company have some input into its final design? In fact, you can easily do both.

Meanwhile, the more people involved in the process, the more "buy in" you'll create - leading to happier employees and increased compliance.

2. Look to Your Industry

Does your industry have a set of ethical guidelines? If so, it's easy to incorporate them into your own Code of Ethics with a simple line: "We abide by all rules of conduct of the American Widget Manufacturer's Association." Meanwhile, be sure to make the text of those rules easily available to management and all employees.

Look as well to particular businesses within your industry. What are their ethical standards? For starters, try the following Codes of Ethics (Compiled by Industry).

3. Look Outside Your Industry

Study, as well, ethical codes, value statements and general business principles from big time companies, whether or not they're within your industry. For superior examples, consider:

Bell South (Ethics Commitment Booklet)
Jet Propulsion Laboratory
Johnson and Johnson (Our Credo)
Marathon Oil (Code of Business Conduct)
Nortel Networks
Starbucks (International Social Responsibility)

4. Get Inspired by Others

Predictably, Codes of Conduct tend to have a lot in common. For example, they tend to ENCOURAGE certain behaviors (such as fairness, respect, teamwork, quality products and service, commitment to the welfare of workers, community and the environment) and DISCOURAGE others (bias, deception, illegal actions, giving or receiving bribes, endangering workers, the community or the environment). As such, allow yourself to be freely inspired by concepts and ideas from leading companies. ("What a great rule for us to follow!")

Remember: No one said you had to start with a blank slate (or even a blank piece of paper).

5. Put First Things First

You may want to begin with an opening sentence or paragraph that outlines your general mission, values and ideals. For example, the Constitution of the United States begins:

"We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."

There you have it - our Constitution's mission in exactly one sentence. (Albeit a rather lengthy one.)

6. Look to Your Past

Draw on incidents or events in your company's history that helped to challenge or shape its ethical guidelines. If you decided it was WRONG to do "X," work to incorporate that concept or situation into your Code.

7. Create a First Draft (Then a 2nd, 3rd, 4th Draft or More)

After you create your first draft document, allow it, as Hemingway did, to "cool off well." (Wait at least a week; more if you can.) Returning to your first draft, see what works, what doesn't, and what's not as clear as you hoped it would be. (For more tips on writing and editing in general, see: 5 Quick Tips for Chipping Away at Writer's Block.) Now go back and fix your first effort, modifying, deleting or expanding as needed. After you've finished that draft, allow it to "cool off well" and begin the editing process again. (And again.) It may take you many drafts, in fact, to create a document that is clear, concise and robust.

8. Keep it Simple

Your Code of Ethics does not need to be a huge, imposing document. Johnson & Johnson's "Our Credo" is exactly one page long. And it has served the company extraordinarily well. Remember the Tylenol scare in the 1980's? (Tainted bottles in Chicago were discovered to contain cyanide-laced capsules, resulting in the deaths of seven people.) As recalled in Newsweek:

"J&J managers knew what they had to do - even without consulting with then-CEO James Burke, who was on a plane as the news broke. By the time Burke landed and caught up with his top managers, they already had called for all Tylenol products [31 million bottles] to be pulled off shelves and for production of all Tylenol items to be halted. The J&J managers ignored advice from consultants and attorneys who had argued such dramatic steps might harm the Tylenol brand and imply the contamination was the work of a J&J employee. "

Instead, the J&J managers looked to "Our Credo" to guide their decision. Its first line reads:

We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services.

Did J&J have a responsibility to its shareholders? Absolutely. But its managers knew that its first responsibility was to the "mothers and fathers and all others who use our products." Such is the value of having in place a clear, concise, ethics "rule book."

9. Make Sure Everyone Knows "These Are the Rules"

What matters most is not that you HAVE a Code of ethics, but that everyone in your company FOLLOWS it. (Even Enron had a code of ethics.) Your goal, in fact, is to have your Code serve as a guiding star - for drafters of company policies and practices, and for daily behavior among all personnel.

Bell South, for example, has chosen to create an Ethics Game employees can play at the computer. It's fun... interactive... and helps drive home important concepts.

At minimum, you'll want to hold annual meetings where the "rules" are explained. The Pac-10 Conference, for example, holds annual meetings where officials review various "nuances" of NCAA regulations - like the "Do's" and "Don'ts" for recruiting high school athletes. Questions are answered and everyone walks out knowing, "These are the rules."

Meanwhile, distribute your Code to everyone in the company. And post your Code in prominent places -not just the lunchroom bulletin board. In Southern California, the Albertson's supermarket chain posts attractive, bilingual posters in their bathrooms, reminding employees of various "rules" of behavior - including sexual harassment. And because these bathrooms are used by customers as well, these posters serve to inform the community: These are our rules and we're serious about enforcing them!

In addition, let the companies with whom you do business know about your company's values - what they should expect from you, and what you expect from them.

10. Make Sure Everyone Knows "Here's How You FOLLOW the Rules"

Make it easy for employees to ask, Is this okay for me to do? In the mid 1990's, for example, the Arizona Public Service Company (APSC) created its ComplianceGram program. Inquiries made by phone or e-mail would be promptly answered, followed up with a written confirmation -- to ensure the answer was properly communicated, and to enable employees to "consider the response at length."

Next, all ethical inquiries would periodically be merged into one e-mail message and transmitted to department managers who were then instructed to discuss them with their staffs -- a kind of now and then "ethical workshop."

Damon Gross, APSC spokesperson, explains: "The ComplianceGram program was very useful for us because it helped us gauge employee knowledge [regarding ethical issues]... and set forth future practices. Subsequently, we established a hot line -- still in use today -- where employees can speak with someone in real time about their [ethical] questions or concerns."

How does a company know its ethical "rules" are being followed -- especially when people aren't asking for advice?

At Johnson &Johnson, employees are charged with periodically assessing how well the company is complying with its own "Our Credo" code of ethics. Senior managers review all opinions and any possible discrepancies between the Credo and company actions are "promptly addressed."

11. Establish a Mechanism for Reporting Problems

Be sure to include a mechanism for reporting questions or problems when they arise. Albertson's supermarket poster, for example, includes a "cool line" telephone number employees can use to anonymously report any problems.

Few people seek the limelight (or major hassle) of becoming a front page whistleblower. Yet most employees will look positively on a safe-from-recrimination mechanism for being able to say: I think we may have a problem here.

Employees at Lockheed Martin receive the following assurances about its Corporate Ethics HelpLine program:

When you contact your Company Ethics Officer or the Corporate Office of Ethics and Business Conduct:

• You will be treated with dignity and respect.
• Your communication will be protected to the greatest extent possible.
• Your concern will be thoroughly addressed. If it is not resolved at the time you call, you will be informed of the outcome when the matter is resolved.
• You need not identify yourself.
• There is never a penalty for using the Ethics HelpLine. People in a position of authority can't stop you; if they try, they're subject to disciplinary action up to and including dismissal.

While it's great to know you'll be "treated with dignity and respect" and you "need not identify yourself," the second bullet point - promising that you'll be "protected to the greatest extent possible" - seems vague, at best. How, you might wonder, will you be "protected"? And what does "to the greatest extent possible" truly mean?

To give further assurances, Lockheed states (in its Ethics and Business Conduct code) that there is no caller ID on its Ethics Phone Line and that "by special arrangement with AT&T, the origins of calls to the HelpLine number may not ... be known to the company." It also assures prospective callers that calls "are not taped or otherwise recorded" and that all voice-mail messages left by callers are "permanently deleted after they are retrieved by a representative of the Ethics Office Staff."

It's one thing to say We encourage you to use the HelpLine; to demonstrate its commitment, Lockheed works hard to anticipate concerns and address them head on.

12. Look to Your Present (And Your Future)

Just as your company (Tip #6) looked to its past to draw on events that helped to shape its ethical guidelines, look to your PRESENT for "incidents or events" that may help to clarify your Code for the future. Changes to your Code can be ethically made - so long as they help to CLARIFY and SUPPORT your original intent. Avoid at all cost, however, changes that work to "lower the bar" - rendering questionable or forbidden practices suddenly kosher. Consider Enron's Board of Directors, who voted - twice, in fact - to modify the company's code of ethics in order to place profits ahead of ethics. (The rest, as they say, is history.)

Your Code of Ethics is your company Constitution. Give it the honor and respect it deserves.

For companion articles, see:

"What Should I Do?"
Six Top Tips to Shake That ETHICS Brain!

_________________________________________________________

Joel Saltzman is a speaker, facilitator and consultant who teaches people in business to
Shake That Brain! and discover solutions for maximum profit.
Most recently, he's the author of "Shake That Brain!" (Wiley, 2006).
877-Shake It! (877-742-5348).
e-mail: joel@shakethatbrain.com
www.shakethatbrain.com

 

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