CHAPTER 10
Building An Effective Corporate Ethics Code SET
YOUR EXPECTATIONS HIGH; FIND MEN AND WOMEN
WHOSE INTEGRITY AND VALUES YOU RESPECT; GET THEIR AGREEMENT ON A COURSE OF ACTION; AND GIVE THEM YOUR ULTIMATE TRUST.
– J O H N F E L L O W S A K E R S ( C H A I R M A N , I B M) has thrust a new role on multinational corporations—that of a conveyor of moral values. It may be an unwanted or unfamiliar role, but it is no less a real responsibility. Any company doing business across borders must be prepared to accept moral scrutiny. It should be able to point to an ethical corporate culture and a formalized code should the spotlight fall on them—if only for the purpose of maintaining a good image. A code of ethics fulfills many purposes within an organization. It increases the ethical sensitivity and judgment of employees, strengthens support for individuals’ moral courage, helps to hone an organization’s sense of identity, supports the firm’s public image and wards off potential legal challenges. To compete effectively, global companies must ensure that their ethics codes and codes of conduct are culturally coherent to all employees. This is much harder than it sounds.
THE WORLD TODAY
Strategic Justification For Codes Companies do not build an ethics code just for fun. In the past it often took a trauma-inducing event, either within the company itself or within the company’s industry sector, to get the ball rolling. With the growing recognition that a company has social responsibilities and strict policing of ethical standards by governments and non-governmental organizations, the incentives for creating an ethics code are many. Typical incentives and justifications include: LEGAL INCENTIVES ■ ■ ■ ■ ■
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Changing legal requirements. Growing involvement in regions with different cultural and political traditions. An incident that hurt the company. Growing media scrutiny. An incident that hurt the industry.
