The Trouble with Corporate Ethics Programs

There are a number of inconsistencies in the way in which some companies pursue corporate ethics programs. On the one hand, many insist that employees sign codes of conduct which outline expected behaviours and principles. They hire global ethics officers to push the ethics agenda and train employees in the strict discipline of responsible conduct. And whistleblower policies are now relatively common.

However, as a recent article in Business Week Online (June 22, 2007) points out many not only do a less than stellar job in defining effective protocols for implementing their codes but they are also inclined not to stand behind whistleblowers when the malfeasant being exposed is a respected senior executive. According to Jim Fisher of the Emerson Center for Business Ethics at St. Louis University . . . "95% of the time whistleblowers lose their jobs."

A more damning paradox is that some companies countenance, or even encourage, things like accounting practices which push the boundaries of vague standards in a kind of sophisticated financial gamesmanship. When, for example, a company purposefully undervalues assets at the time of an acquisition in order to recognize real value as cash flow later, it is saying in effect there is nothing wrong with taking advantage of vagueness for corporate or personal benefit.

The message to employees in such circumstances is clear, and the inconsistency is not lost on them when they consider their own choices to engage in, expose, or turn a blind eye to breaches of a code of conduct. Any perceived hypocrisy in the application or interpretation of ethical standards can easily and irreversibly undermine all the codes and training programs that a company implements. Ignoring the fact that playing financial gamesmanship, even when it apparently falls within generally accepted accounting standards, is unprincipled, will make incongruous the purpose of ethics programs and the well-meaning investments in hiring chief ethics officers, writing codes of conduct and training people in how to apply them.

Alastair Campbell and PR

Marc Andreessen - Neophyte Blogger