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Ethics, Leadership and Honesty

Updated on April 3, 2017
Marcy Goodfleisch profile image

A professional career coach, Marcy has helped hundreds refine their resumes, improve their interviewing skills, and advance their careers.

Defining Organizational Values and Ethics

A Code of Ethics lists the standards | values of your company.
A Code of Ethics lists the standards | values of your company. | Source
Empower the team to research and develop your organization's code of ethics
Empower the team to research and develop your organization's code of ethics | Source

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Corporations and Businesses Need a Code of Ethics

Most of us feel we know right from wrong, but do we live that way in our daily lives and professions? Many organizations, and even some families and individuals, create a list of ethical standards as a guideline for how they want to conduct business, or the choices they want to make in life.

For an organization, there are steps management (or an appointed team) can take to identify the values of the corporation or agency, and to list them in ways that all can follow and understand. Individuals or families can examine themselves in similar ways and come up with a code of honor or list of values that applies in daily life.

Here's a typical process for developing a code of ethics that can be applied in many settings. For this example, we will use a corporate or organizational setting.

In-house or Consultant:

One early issue might be whether to form a team and let it go through the process on its own or to hire a consultant to facilitate the process.

A longtime management adage is that "People support what they help create." Keeping this in mind, be sure that your organization allows input from all levels and that the process isn't a top-down exercise.

If you feel a consultant is the best choice to guide you through the process, look for one can effectively facilitate a team rather than one who will draft a code of ethics by shooting in the dark. A good consultant will ask the right questions, keep a team on track, serve as a go-between with upper management and employees and keep all stakeholders in mind in a balanced way.

It is also possible to create a code of ethics with in-house talent. The steps below will help guide a team through the process on its own.

Form a Team:

Assuming the organization includes more than just a handful of people, you will need a workgroup to go through the process of identifying ethical standards that apply to the organization and codifying them in a code for the workplace.

The team should include representatives from all layers of the organization, including rank-and-file employees, supervisors, midlevel managers and someone from upper management.

Empower the Team:

The highest level of management should empower the team to research the ethical standards that need to be followed, and all employees in the organization should be openly encouraged to talk freely with team members in order to determine issues or standards that should be addressed in the code.

The workgroup should be framed as contributing to overall improvement. To help employees share information honestly, upper management may wish to emphasize that the process is not a witch hunt to find out what is wrong, it is a process to help define how to be the best organization possible.

Be Open to Change:

Only very naïve managers would expect to hear there are no problems and that all operations operate with sterling integrity. Often, such processes will bring to light some problems that need to be addressed. It is important to view this as a chance to correct the course and move forward more effectively rather than an opportunity to punish people or to find ways to cover up any problems that might surface.

A short video on organizational ethics

How to Create a Code of Ethics | List of Organizational Values

Define Ethics:

If you ask any 10 people to describe what 'ethics' means, you will probably get 10 answers. Many answers will be similar, but the process of developing a code of ethics for an organization requires that all participants have the same concept of what the word means and how it applies to the setting (the company or organization).

Ethics refers to the code of conduct or moral compass those within a group or organization should follow. In some cases, what might not be seen as unethical for one profession or individual can be an ethical violation for others.

For example, as logical as it might seem for an attorney to approach someone in person and suggest filing a lawsuit, it is a serious violation of the code of ethics that applies to lawyers. Attorney's can advertise on television or through other means that they're available if you have been damaged by a specific situation or incident, but standard Bar rules prohibit barratry, which involves the attorney or a representative of the attorney personally calling or visiting you to incite a lawsuit.

Ethics, therefore, can be subjective (can rely on the context of the setting). But ethics can also be universal (honesty can apply across the board).

How to Identify Ethical Issues:

The team developing an organization's ethics code should examine the following questions:

  • What laws, rules or standards apply to the professions in this organization?
  • What laws, rules or standards apply to the industry of this organization?
  • What are the values the organization already embraces?
  • What values does the organization want to embrace?
  • What sort of conduct or behavior does the organization owe to the public?
  • What sort of conduct or behavior does the organization owe to its stakeholders?
  • What sort of conduct or behavior does the organization owe to its customers?

You can see that an organization with numerous civil engineers (for example) but no attorneys will have professional ethics related to construction standards, but no formal standards related to barratry. A law firm, however, will have a different set of professional standards to consider.

A government agency will have laws related to open records, use of public funds, accounting procedures and other issues public-sector organizations must address.

A non-profit firm should consider the trust of those who donate, its stewardship to the groups or issues it supports, and applicable tax laws.

How to Involve Staff in Defining Corporate Values | Ethics

Employee meetings are great places to brainstorm corporate ethics and values.
Employee meetings are great places to brainstorm corporate ethics and values.

Ways to Get Employee and Stakeholder Input

The above questions can generally be tackled by a well-selected workgroup. Going through the list of questions will greatly reduce the time the team will spend on developing the organization's code of ethics, because it will eliminate much of the randomness that happens when a committee tries to produce a product without first narrowing the scope of its context.

Interview Employees:

If time permits, it can be very useful to interview members of the organization at various levels to see how they would answer some of the above questions. What does your shipping department think it owes investors? What does that department think it owes its manager? What about the customer?

Compare some of the answers you'll get to see if there are contradictions that mean one question is best answered by infringing on the best answer another question might have. For example, if a company value is to give maximum profits to its investors, how does that fit with its obligation to give customers a good product?

This doesn't mean the two are mutually exclusive, it just means that all members of the organization need to hold all stakeholders in mind at all times.

Interview Stakeholders:

Depending on your organization, its size and its mission, you may want the team to interview various stakeholders outside the staff to get input. This can be done through focus groups, brief surveys or informal interviews with persons or groups that represent those you serve or those to whom you are accountable.

Business Ethics and Monsters Inc. (a video used in Business Ethics course in Xavier University's MBA Program)

Step-by-Step Process to Develop a Code of Ethics

Although some office ethics are easy to identify and establish, this is not always the case. Developing a Code of Ethics for a corporate setting is more challenging.

More than likely, once the workgroup has answered the questions above and perhaps interviewed some members of the organization, it will have gathered reams of comments and be faced with a confusing amount of input to distill.

Do you list each specific thing? Do you list rules for attorneys as well as rules for accountants? Will the final document rival the United States' tax code in its length and lack of readability?

No, no and no!

How to Simplify:

A few members of the team can be assigned to sift through the input and divide it into categories and types. Use the list of questions as a starting point, and it will go much faster than you anticipate.

After just a bit of filtering and screening, you will see that some answers fall under obligations to investors, some fall under various professional standards, and some fall under other questions.

Compile the like answers (some might go under two topics), and develop a spreadsheet or list of those comments and points for each of the above questions. You may also have some other questions or categories that are unique to your organization, which is fine.

Summarize and Combine:

The goal at this point is to summarize in one or two ethics statements the concepts you have gathered through research. In no instance will all the various points be listed one by one; you want global code of conduct statements that can apply to that entire topic.

For example, if your organization has licensed professionals in several fields, you may have a section of your code of ethics that states:

  • All employees must follow the codes of conduct, ethical standards and rules applying to their professions as well as those upheld by this organization.

In one short sentence, you have covered accountants, lawyers, teachers, plumbers and any other profession in your organization, and you've also applied the code to employees who may not have a license or certification.

For behaviors toward customers, you will capture things like honesty, courtesy, promptness and other behaviors. Courtesy and promptness may not sound like they fall under ethics, but if a corporate or organizational value is to put the customer first, perhaps this is a good place to reinforce that point.

Feedback to Upper Management

Now that the team has identified the values and behaviors your corporation or organization operates under or should embrace, there may be information upper management should know in order to implement broader changes.

This can be a scary step in the process, but it is essential. It is also essential for upper management to agree ahead of time that it is willing to hear the tough stuff.

Among the things the team may want to bring forward are issues related to:

  • Jeopardizing safety or quality in the name of cutting costs
  • Pressures from any direction to violate basic values
  • Practices that should be examined and possibly changed
  • Anything else that might contradict the code of ethics or put employees in a conflicting situation

This information should be presented briefly, with supporting facts available, and in the spirit of good faith. Don't be surprised if upper management asks for more details; if they are serious about a code of ethics, they will want to know how to implement it effectively, not just on paper.

The information should be generalized where possible rather than pointing fingers. The team may have discovered that the manufacturing department sometimes gets deadline goals that do not allow adequate time for safety inspections. Upper management will likely understand how sales or performance goals have created this dilemma and it take steps to avoid this problem in the future.

How to Inform Staff of a Code of Ethics

It's helpful to 'codify' your code of ethics through whatever approval process best fits your organization. This can be done through a vote of the Board of Directors, through adoption by the Employees' Council or any other venue that can review the product and give a stamp of approval and support. Although this sounds like an exercise in formality, it establishes the code as being officially in place, and it raises awareness throughout the organization.


The final code of ethics, if it's brief enough, can be posted in various places in poster form. This also sounds a bit bureaucratic, but it can serve as an open reminder of the standards that were researched, drafted, accepted and adopted.

The standards should be included in the Employee Handbook and in the organization's Annual Report or other documents seen by various stakeholders. Again, this reinforces that the exercise was done for a purpose, and it helps instill the values and codes of behavior through all members of the organization and its audiences.

Copyright 2012 by Marcy Goodfleisch. Ms. Goodfleisch has a Master of Arts degree and is an adjunct faculty member at Park University's Austin Campus. She teaches ethics and humanities courses and has facilitated exercises such as the one above for private organizations as well as multi-billion dollar governmental agencies.


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