A great many number of organizational leaders (even) today perceive ‘Ethics’ as a question of personal integrity and conscience. Such leaders are not hesitant to write off any malpractice within their organization as an ‘isolated incident’ by a ‘rogue’ employee. Barely do they acknowledge the accountability that there is a deep rooted anomaly within the organization under their leadership that led to the malpractice.
To them, Ethics has nothing to do with management, Period!
Careful scrutiny of numerous corporate scandals across the globe by academicians have proven beyond a shadow of doubt that ethics has everything to do with the leadership. The nature of the misconduct always proves to be a reflection of the cultural setting of the organization rather than the flawed character of a lone player. Be it the ‘Enron’, ‘Diesel-gate’ in Volkswagen or the more recent ‘Theranos’ scandals, unethical business practices almost always involve the tacit, if not explicit, cooperation of the leaders and reflects the values, attitudes, beliefs and behavioral patterns that define an organization’s culture. So, it is fair to conclude that ‘Ethics’ is more an organizational issue than a personal one. A Leadership that fails to promote ethical behavior and to institute systems that promote ethical conduct are accountable for the behavior of those who conceive, execute, and knowingly benefit from corporate misdeeds.
They must recognise their role in defining corporate ethics and develop a culture that can reinforce the connections and reputations on which their organization’s success is dependent.Leaders who disregard ethics risk personal and business culpability in today’s increasingly stringent legal environment. In addition, they deprive their organizations of the benefits available under federal guidelines of various jurisdictions/countries for sentencing organizations while convicted of corporate malpractice. These sentencing guidelines are designed to evaluate the presence and effectiveness of the internal controls, an organization has put in place to prevent unlawful conduct and base fines partly on the extent to which companies have taken steps to prevent that misconduct. With this lucrative prospect of leniency (when caught), many companies implement ‘Compliance-Based’ ethics programs that are usually designed by the legal team with the sole purpose of preventing, detecting and punishing legal violations.
However, ‘Organizational Ethics’ serves a higher purpose than merely avoiding illegal practice. Equipping employees with a ‘Code of Conduct’ will hardly help in tackling the underlying root causes of unlawful conduct (though having a code is an effective start to an effective ethics program, that alone will not help). Additionally, employees tend to suspect the introduction of an ethics/compliance program as a ploy to protect the leadership from blame for prospective ethical failures and the legal complications that follow them. In other words, skeptical employees may see a compliance-based ethics program as a liability insurance for senior management. Therefore, to establish an environment that supports ethical behaviour, organisations must take a holistic approach that goes beyond the typically harsh legal implications.
An ‘Integrity-based’ (Value-based) ethics program that combines a genuine respect for the law with an emphasis on managerial responsibility for ethical behavior is what we need. Numerous researches have indicated that establishing the broader ethical context in an organization, commonly referred to as ‘ethical climate’ or ‘culture’ is the most important aspect of an effective ethics/compliance program. These areas may include leadership, reward systems, perceived fairness, ethics as a topic of conversation in the organization, authority structures, and an organizational focus that communicates care for employees and the community.
Depending on the ‘Context of the Organization,’ companies may differ in their approach, scope and strategy to develop an ‘integrity based’ ethics program. However, they all strive to explore, identify and establish first their guiding values, beliefs and core principles in unambiguous terms and design the companies’ conduct of business around them through integration.
When integrated into the day-to-day operations of an organization, such strategies can help prevent debilitating ethical failures while consistently evolving into better versions of the organization’s self. When designed carefully, such framework becomes no longer a burdensome constraint within which the organization must operate, but the governing motto of an organization and guiding pillar for success.
An effective Value-based ethics program is designed based on shared and established organizational values that guide employees to act ethically. Such a program encourages employees to perceive its existence as an enabler for fair and just corporate environment and empower them to be aware of ethical or legal issues, report ethical or legal violations without fear of retaliation and refrain from engaging in unethical or illegal conduct.
As a result, a good program would reward the organization through reduced unethical/illegal behavior, improved employee commitment/morale and improved stakeholder satisfaction. This values-based approach will also have a positive impact on employees in general as it will hold employees accountable for their behavior through monitoring and disciplinary systems. Taking disciplinary actions against employees who exhibit deviant behavior creates an environment that reinforces standards, upholds adherence to shared values, eliminates the notion that the system exists to protect top management from blame, and reinforces the perception that the organization is a safe and secure place where wrongdoers are held accountable for their actions.
To conclude, this forward-thinking, values-based approach to compliance paves way to an environment and culture, in which employees’ time, engagement and efforts are respected and recognized, which in turn makes them more likely to treat the company with respect and comply with rules and regulations and contributes to its strategic goals and objectives in a positive way.
A Saudi National with 33 years of working experience in various industries such as oil and gas, construction, consultancy, engineering, transportation and manufacturing. Currently, I am working as the Vice President of Quality, Health, Safety, Security and Environment (QHSSE) for International Maritime Industries in Saudi Arabia.
I earned a Bachelor and Master’s Degree in Engineering, as well as three MBAs in Project Management, Operations Management and Healthcare Management. I am pursuing a Doctorate in Business Administration at the moment. My desire for success has motivated me to pursue my education with zeal. Personal experience has taught me that the most effective method for achieving my life goals is to exert extreme effort in whatever I do. To impart my knowledge, I personally conduct training courses for my team.
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