By Jim Walton, CCEP
LRN Ethics & Compliance Advisory Services Team
Over the past year, we’ve seen a significant uptick in the term “code of conduct” in the news as a result of the spate of recent ethics and compliance failures across industries. Codes of conduct are now more important than ever. Throughout human history, civilizations have established codes of conduct and behavior – whether religious, legal, or cultural. From the time we are children, we are taught about right and wrong, and how to behave. The enticement to conform has always been a combination of rewards for doing the right thing and punishment for doing the wrong thing. Corporate codes of conduct have evolved over the past 20 years – from a compendium of rules and regulations telling employees what they can and cannot do – to a set of guidelines for employees to follow – to beacons that inspire principled performance. A code of conduct is an organization’s “culture written down”. Your code should be a statement of who you are, what you believe, how you relate to others and the world, and how things get done.
The most effective codes of conduct start with the organization’s purpose, which leads to the core values, which in turn drive the desired behaviors that result in positive business outcomes. The tone is positive, the voice is inclusive, and the language is simple and direct. Employees should see themselves and their colleagues in the code. They should be able to say with pride “this is where I work”. Likewise, customers, suppliers, shareholders, and prospective employees should be able to get a sense of what it’s like to work at that company. The code should also be a user-friendly “gateway” to a company’s entire ethics and compliance program that is referenced throughout the year, rather than just read once a year during the annual code certification process.
Finally, an effective code of conduct is only part of the puzzle. It must be accompanied by a robust education and communication program, and ongoing measurement of the effectiveness of the overall E&C program, and its impact on the culture and vice versa. There are so many exciting new solutions and technologies to embed the code of conduct into the fabric of the organization, including mobile apps, games, and analytics. These are not technology for technology sake, they are new ways to learn based on those best fit to your workforce.
The code is the foundation, but how it’s understood and embodied defines a resilient corporate culture; becoming something felt across the organization, its partners and the community it serves. Those of us in the E&C community understand the current climate provides an opportunity to put a spotlight on the importance of values in driving elevated behavior and corporate performance. Our role in corporate America and the world has never been more important.
Thank you, Well said. Codes that establish values are much more effective than those that are a “thou shall not message.” An organization that aligns adherence with the Code to work performance and rewards enjoys even more sustainable results!
Enron (lest we forget) had a very generous and philanthropic CEO and a stellar Code of Conduct and well-stated and publicized values as well. A Code of Conduct has to be a living document, internalized into the culture and lived by the board and executives through the organization to the staff.
SCCE, thanks! And thanks for sharing your great posts every week!
I’m a big believer in ‘the Code’ wherever I work. You can tell a lot about an organization just by asking a regular employee if there is a Code of Conduct. When they look puzzled, I get concerned. Sometimes it was a policy, written 10 years ago, and barely looked at or communicated since. Other times it’s a piece of the annual compliance education, but not otherwise seen, except perhaps at the new employee orientation. I have discovered that it isn’t terribly expensive to get nice formatting and printing, (I believe in hard copies for this document), and it really reinforces to employees that the organization cares about ethics and compliance. Lastly, for leaders, I tell them it is a great piece of branding, especially in new or merging organizations. It’s a great start to pull everyone together with a common understanding of mission, values, and expectations.
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