05/ 13/ 2005
by Tamara E. Holmes
Not all business decisions are based on whether an action makes legal or fiscal sense. Sometimes you'll be confronted with the question of whether a particular action is morally right or wrong. Whenever you're making that type of decision, your ethical standards are coming into play.
Every business will face ethical dilemmas. For example, say you're a business coach and two of your clients are business owners who know each other. During a consulting session, one of the business owners asks how the other's sessions are going. Do you tell him? While you might not be legally bound from saying anything, you suspect that the other client might consider it a breach of trust. Your decision, therefore, is based on what you feel is morally right for you to do.
One way to help you deal with ethical concerns is to create a blueprint for ethical decisions. A Code of Ethics refers to a system of principles that govern right or moral behavior. If you have a statement in your Code of Ethics that you will not discuss anything that goes on with any of your clients, then you automatically know how to handle subsequent situations.
But who is to determine what is right or moral behavior for your company? Since one's values determine what one considers right or moral behavior, you, as a business owner, have the responsibility of coming up with a Code of Ethics that reflects the values of your company.
The first thing you should do when coming up with a Code of Ethics is to determine your purpose for creating it. What types of problems are you trying to solve? What types of situations do you want to avoid? How would those undesirable situations affect your business?
Once you figure that out, create a list of ideals that you want your business to live up to. For example, you might want to be deemed trustworthy by your clients or you might wish to be fair to customers when it comes to pricing.
Once you come up with the list of ideals, go through each one and think of situations where you wouldn't be adhering to them. That is the starting point for your Code of Ethics.
After you've done the brainstorming, it's time to write down your Code of Ethics. Even if you're a sole-proprietor and you think you've got it all in your head, you should write it down for a number of reasons. Writing reinforces the thought process and makes it more tangible. Also, if a situation carries an emotional charge, which some ethical dilemmas do, it might be difficult to think straight. You can then refer to the written document. Memories fade. You may forget some parts of your Code of Ethics if you don't write it down. Finally, if you hire employees later, you can easily share the information by giving them a copy of the document.
Another thing to consider is whether you're going to enforce your Code of Ethics. In other words, if employees don't adhere to the guidelines, will they be disciplined? If so, that needs to be spelled out in the document as well.
It is important that your employees buy into your Code of Ethics, so if possible, include them when you create the document. You might find that your employees come up with values and moral concerns that you never thought about. Once your Code of Ethics is complete, make sure every new employee gets a copy of it and schedule time to talk to employees about things they don't understand.
Remember that your Code of Ethics is not set in stone. Re-evaluate it yearly and decide whether it still meets your needs. Over time, some things you once thought to be ethically wrong may no longer be in your opinion. Likewise, you may confront new ethical dilemmas that you never dreamed of.
Like a business plan that's designed to help you steer your company to success, a Code of Ethics will guide you through that fuzzy area between black and white.
