How to Make Your Corporate Code Influence Employee Behavior

A former white collar criminal helps companies get employees to do the right thing

Posted by Dawn Lomer in Code of Conduct, Ethics, Ethics & Compliance, Human Resources on January 17th, 2013

“You have to develop integrity like you do a muscle,” says Justin Paperny. He should know. While spending a year in Taft’s Federal Prison Camp for fraud several years ago, Paperny had a lot of time to think about the path that brought him there.

“You have to work at integrity,” he says. “I stopped practicing, and when you don’t practice and you’re faced with a dilemma, you’re not prepared to respond appropriately.”

Today, Paperny is an author, speaker and consultant on the importance of ethics and ethical behavior. Part of his work involves writing corporate codes for the companies that hire him. It’s an area that he’s particularly well suited to, given his unique perspective.

6 Keys to an Effective Corporate Code

Paperny recommends that a company’s corporate code have the following six characteristics:

  • Be no more than a page
  • Be practical
  • Be clear enough for employees to recite and understand it
  • Not read like bureaucratic tax code that puts you to sleep
  • Not be buried in pamphlets or just posted on the wall to appease shareholders or leadership
  • Be used

Use It or Lose It

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A corporate code is only as good its implementation. If it isn’t developed and used, it’s not going to have any effect on employee behavior. And if it’s implemented badly, it can even have a negative effect on behavior.

Paperny stresses the importance of leadership setting an ethical tone for the company. Even when a corporate code is written, posted, on a company’s website and widely distributed, its effectiveness will not become clear until the company faces a dilemma.

“If you have an employee who violates one of these rules… that’s when it matters,” he says. “Hold them accountable. Because if you don’t, then your employees are going to know that your corporate code is a total joke. It doesn’t mean anything. Or, that the code doesn’t apply to you, depending on how much you produce.

Does it Matter?

“Codes do matter,” he says. “Studies show they lower unethical behavior. However, I notice that a lot of companies don’t apply the code to professionals who may produce the most. They get waivers. Or they are treated a little differently.”

In assessing the tone they are setting in the organization, Paperny suggests that employers ask the following questions:

  • Do I treat all of my employees the same way?
  • Is my code of conduct practical?
  • Am I explaining it?
  • Do I encourage employees to step up and say no?
  • Do I encourage employees to question leadership?

“If they can answer those questions, they will be in a better position to know the tone they are setting for their organization,” he says.

Reward Ethics

One way to reinforce the importance of ethical behavior is to reward employees for behaving ethically.

“How many corporations reward an employee for turning away a deal that didn’t feel right?” asks Paperny. “It tends to come down to the bottom line. To get rewarded for doing the right thing, knowing that it didn’t bring in any money that day, sets a real tone. It encourages good conduct. And it’s a different way of doing business.”


Dawn Lomer
Dawn Lomer

Managing Editor

Dawn Lomer is the managing editor at i-Sight Software and a Certified Fraud Examiner (CFE). She writes about topics related to workplace investigations, ethics and compliance, data security and e-discovery, and hosts i-Sight webinars.