After all of your blood, sweat and tears have gone into developing a well written, comprehensive code of conduct, how do you get your employees to take the words from the document and turn them into everyday actions? At the ECOA conference, I attended a session titled “From Code to Culture: Leveraging Your Code of Conduct,” presented by Mark Rowe, CCEP, Principal at Ethical Performance Associates. This session focused on identifying the barriers to success in turning your company’s code into your company’s culture. To assist you in ensuring your code reaches its full potential, here are my notes from the session:
– Development, Implementation and Evaluation
– Explore the true potential of a fully effective code of conduct
– Recognize factors impeding success- people, process, products
– Consider a framework that can assist in developing and fully leveraging your code.
Document or Cultural Mindset
- It is a business document, focused on the strategy, mission and vision of the business.
- Necessity for a code is obvious/ common sense- FSGO, SOX, Stock Exchanges, etc.
- Standards promote the way you want to do business.
- Development and implementation varies between companies as they a uniquely developed around the context of each business. For example: regulatory environment, risk profile, stakeholder expectations and culture.
- Not only how far does the code go, but how far can it go?
Evolutionary Scale of Success
- How an organization’s code moves ahead, evolving to meet its potential.
- Supports and unified corporate culture.
- Prevention and detection of misconduct is important.
- Move from the bottom- establish compliance expectations and duties, through to the top, ultimately- ethics and compliance considerations indistinguishable from business/operational issues and integrity, intrinsic to organizational identity.
- Bottom → Directional → Inspirational → Transformational → Top
- Trust enables collaboration, increasing the confidence to innovate and take risks.
What Limits a Code’s Potential?
- Philosophy and aspirations- compliance and ethics programs came about as a response to government pressures and a necessary requirement, which can be defensive responses in some cases. Audience is primarily internal and is usually solely a risk management tool. An enabling approach views ethics and compliance as an indispensible tool, contributes to long-term success, expressing identity and values (integrity as an organization). Audience expands from an internal group to those external to the company: third parties, stakeholders, etc. Emphasizes mutual obligations and universal applicability.
- People- Leadership needs to be commitment and understand the importance of having a code. Sometimes a team is isolated, difficult to get insight from other areas of the organization- “functional silos” effect. If the legal department “owns” the ethics and compliance department, there can be difficulties, as lawyers may not use terms that the rest of the employees can understand. Struggling with disinterested managers and employees. Code needs to resonate with your people.
- Process- Degree of connection to risk assessment process, restricted input and feedback, underestimating regional and cultural factors, inadequate code training strategy and execution and limited evaluation of training/ communications effectiveness.
- Product- final copy of the code, how do people perceive it? Generic CEO introduction, non-retaliation, responsibilities of managers/supervisors, etc.
Closing the Gap on Reaching Your Potential
7 step model:
- Assure- Make sure people understand the rules are being enforced and it’s effective.
- Enable- Give managers the power to be role models and provide employees at all levels with the tools they need to succeed.
- Support and Guide- Need support to turn standards into actions.
- Educate- Training and assessment of training.
- Anticipate- Business changes, new markets, increasing regulations- requires ongoing modification to remain relevant.
- Articulate- Tone at the top, manager reinforcement, peer dialogue.
- Engage- Discussion, ongoing awareness, establish a compliance and ethics committee.