03/ 01/ 2006
by Jeffrey Moses
With the almost universal awareness of the need for ethical behavior in today’s business environment, establishing a formal business ethics program benefits a small company in many ways. You can state such a program in a written document attesting to your company’s dedication to honesty, fair play and ethical behavior in all aspects of business.
An official ethics program, supported by management at all levels, acts as a foundation for:
- Company decisionmaking
- Customer service
- Management/employee relations
- Employee interactions
- Community relations
In short, a formal ethics program also serves as a compass for almost every internal and external operation.
In particular, an ethics program promotes all of the elements that create the basis for employee harmony, teamwork, loyalty and honesty. When these stated goals match behavior among employees, the entire company structure becomes conducive to ethical relationships among staff.
Employee loyalty
Success in a small business is built on the foundation of employee loyalty and dedication. When management establishes and supports an ethics program, it lets employees know that it will recognize and appreciate their best efforts. When an employee feels secure that management will act in an honest, harmonious way (regarding hiring, firing and promoting, in particular), a future with the company looks promising and worth working toward.
Teamwork
By its very nature, teamwork demands an honest, open interaction among team members. This isn't possible when employees feel that team members or management decisions undermine their individual efforts. Once management starts rewarding individuals for a successful team effort––or reprimanding individuals for team failures––the fabric of the company will grow ragged. Employees won't trust one another or management, and teamwork will come to a halt.
The values created by establishing an ethics program extend to enhancing customer service, establishing honest, open relations with shareholders and lenders, maintaining smooth interactions with vendors and creating harmonious relationships with local governmental agencies and others in the community.
Statement of an ethics program
To be successful, the ethics program should have as its cornerstone a written document titled “Code of Ethics,” “Code of Conduct,” “Ethics Program Guidelines” or other titles along this line. This document should state:
- The company’s stated dedication to ethical behavior
- Names and company titles of members of an ethics committee, which should include representation from management and key staff
- The company’s policies for administering and maintaining ethical behavior (including channels for employees to report violations or make inquiries)
- Means by which ethics violations will be investigated, corrected and/or punished
This document should be easily accessible to everyone in the company––as well as to outside organizations coming into contact with the company (lenders, vendors, etc.). You should make it a part of the training material for new employees, post it on bulletin boards and include it as a key element of company Web sites and literature.
