Codes of Ethics

Code Development in General

Implicit in a code is the belief or hope that the
outcome of adhering to the code is ethical
behavior.
The hallmark of a well-developed code of ethics
is the inclusion of the public in process, the
generation of public confidence as a result of the
code, and the successful attention to concerns in
any number of different forms, including quality,
price, choice, privacy, environment, labor
standards, human rights, health and safety,
advertising, and issues of morality.
 Code Development Process
As with strategic processes in general, there is a
feedback loop that allows the system to learn.
That is, after a process of review, the code of
ethics should be adapted to meet any of the
changing needs or circumstances of the
activities in question.
One of the key advantage of this process is the
inclusion, at several stages, of the stakeholders
who will be involved or affected by the code of
ethics.
It also highlights the importance of compliance in
the implementation stage, and the review
process.
 Code Development in General
There are a number of key roles that
governments should be willing to adopt in
balancing the many different stakeholder groups
and interests of the good of an industry or
sector.
Included are contributions along the lines of
catalyst, facilitators, endorser, and/or provider of
regulatory support.
With reference to the facilitator role,
governments could be instrumental in providing
physical space, special documents or even
monetary resources for the purpose of
generating enthusiasm within a group for the
active pursuit of a code of ethics.
 Code Development in General
If government has been able to contribute in a
facilitating or enabling fashion, there is still the
task of sitting down and generating the actual
code document.
A series of questions will need to be generated
in respect of current knowledge, background
and history, current and future needs, and so on,
in assembling the right people and knowledge
base to proceed with the code.
 The Language of Codes
The form of the code of ethics refers to its
linguistic and grammatical style.
Codes should be written so that the reader will
identify with the intent and goal of the statement.
Impersonal messages distance the reader from
the writer.
Codes should be written (oddly enough) without
the use of the word, should.
should This implies an
authoritarian nature that may turn away the
competent reader who could interpret the use of
should or will as overly paternalistic.
 The Language of Codes
The choice of words is critical.
Wal-Mart employees are called associates
rather than workers;
workers psychologists care for
clients as opposed to patients;
patients universities
have professors and high schools have
teachers.
teachers
Each of these semantic distinctions is important
and each demonstrates a degree of respect that
the particular institution has for its stakeholder.
 The Language of Codes
For those organizations that wish to make the
code an active document, a variety of methods
and mediums can be employed.
First, the document needs to be written in a
clear, concise and relevant fashion.
If the message is sent, yet unclear, it will fail to
make an impact on behavior.
Once this most basic and important task is
accomplished, then it needs to be distributed.
 The Language of Codes
Possible locations include the following:
Policy and procedure manual
Websites
Employee handbook
Newsletters
Financial statements
Employee orientation manual
Telephone/email directories
Brochures
Training/educational manuals, video, CDs
Identification cards
Business cards
 The Language of Codes
The essential point to be made here is that the
code needs to be part of all organizational
activity.
It needs to be part of the organizational culture
(the way we do things around here)here rather
than a tool that is dug up each time a potentially
unethical issue rears its ugly head.
Having a code does not make an organization
ethical, but living by and through the code does
make it an ethical organization.
 The Language of Codes
The ability to affect decision-making is directly
related to the value that members place on the
code.
If the code is weakly valued, chances are that it
will not be internalized nor put into action. On the
other hand, if the values the organization
espouses are also core values of the individual,
then it will become the conceptual basis of
individual behavior.
 For the development of successful
codes, a code should:
1. Reflect the actual organizational philosophy
2. Be written clearly and concisely in order for it
too be accessible by all members
3. Be written in order for the reader to feel that he
or she is part of the process rather than the
recipient of a directive
4. Be a document that will lead to a behavioral
change or to the reinforcement of previously
held values
 For the development of successful
codes, a code should:
5. Clearly relate to actual decision-making
behavior (i.e. it should be part of the decision-
making process in the organization)
6. Clarify the ethically ambiguous
7. Be widely and constantly communicated
8. Reflect the behavior and values of the
leadership
9. Be enforceable
10. Inspire, educate, and regulate
 Code Development in Practice
Organizations and professions on the whole have been
granted power and privilege by society, which comes
packaged with the expectation of a contribution to the
broader social well-being through a shared appreciation
of overlapping values.
Just as the profession is bound by a set of values (e.g.
integrity and safety) these must emerge as a function of
common purpose.
If the profession acts outside this connect, there is a
chance that the scope of moral evaluation (the societal
norms that govern behavior) will become both narrowed
and flattened, leading to the disintegration of trust
between the community and the firm/professional.
 Code Development in Practice
This suggests that the profession and society in general
must be intricately intertwined in a relationship that is
bound by reciprocity and symbiosis.
There are different perspectives on how values play
heavily in the development of codes of ethics at a
broader level.
One is said to be a value-driven approach, while the
other is felt to reflect more of a market-driven
perspective.
The ends that each achieve for society may be different,
emphasizing the importance of establishing good
processes that are built on inclusive core values.
 Compliance
Compliance is a broad term that encompasses
implementation, monitoring, reporting, auditing,
verification and enforceability, all of which serve
to increase the likelihood of stakeholders
following a code.
One of the most important issues facing codes
of ethics is the lack of monitoring and evaluation
in gauging code effectiveness.
 Implementation
The implementation process is best begun by
appointing a working group or task force to
plan and carry out implementation of the code.
Seven strategies were broadly considered for
the purpose of code implementation, including:
1. Dissemination and publicity campaigns.
2. Publications.
3. Seminars and conferences.
4. Pilot projects.
5. Awards.
6. Education and training.
7. Technical assistance.
 Implementation
1. Dissemination and publicity campaigns.
Letting people know the existence of the code of
ethics is stated to be the first and most important
step in implementation.
This may be accomplished through press, radio,
television, display, videos, brochures, books, and
lectures.
2. Publications.
The production of newsletter and occasional reports
is an excellent way of getting the point across to any
number of target groups.
 Implementation
3. Pilot projects.
Seen as one of the first steps in the
implementation process, these are designed
to demonstrate and test the value of
different development strategies.
4. Awards
Notoriety through award schemes is stated
to be an effective means by which to
implement codes of ethics or other
standards.
 Implementation
6. Education and training.
Performance can be enhance through any number
of different education and training programs.
7. Technical assistance.
This comes in the form of expert missions at the
request of international organizations or in the form
of research networks or task forces designed to
make recommendations on how programs,
planning, and services can be improved.
Technical assistance may also come in the form of
databases or academic resource centers to help
disseminate information on improving performance
through codes of ethics.
 Implementation
The development and implementation of
principles and codes of ethics must be inclusive
of a broad spectrum of interests if they are to be
successful.
Achievement is therefore strongly tied to
ownership.
The most effective codes are of little use if not
accompanied by a plan to support not only the
procedural aspects of implementation, but also
those who must make it happen (e.g. through
education and other forms of assistance).
 Implementation
Evaluation was also seen as an integral
part, which must be considered early on in
the planning process.
Failing to do so undermines the ability to
adequately monitor the project through
measurable outcomes.
 Monitoring
The development of a monitoring framework,
which is the collection of information on the
effectiveness of codes of ethics, and the
assessment of whether the information is
accurate, complete, relevant, and reliable.
The chief benefits of monitoring are:
1. The improvement of policy and performance
2. The promotion of openness
3. The assessment of progress
 Monitoring
Other benefits are said to lie in:
The opportunity to inform customers of the policies
and efforts
Improvement of the corporate image
The ability to assess customer awareness and
attitudes to codes of ethics
The measurement of response and acceptance of the
code of ethics
The measurement of how extensive the code has
been implemented
The identification of gaps or weaknesses in
implementation
Reasons why stakeholders compliance
subscribe to a code of ethics
Moral obligation.
This factors touches on the desire to do the right thing
depending on circumstances.
When we are made aware of the consequences of
our actions we may exercise this desire.
Need to belong.
Being part of a group often comes packaged with the
desire to comply with certain normative standards that
quickly emerge through interaction or education.
Complying with these standards allows for a sense of
belonging and security.
Reasons why stakeholders compliance
subscribe to a code of ethics
The threat of punishment.
Compliance will emerge if the threat of an external
body is too heavy.
For example, service providers will comply with
standards if they feel they will lose market share or be
penalized by the external body.
The threat of shame and embarrassment.
While shame is a self-imposed punishment,
embarrassment is a socially-derived sanction.
Both may strengthen the willingness to comply with
normative standards.
Reasons why stakeholders compliance
subscribe to a code of ethics
The extent of social bonding.
Service providers who have a strong social
bond to the group (other service providers)
will be less likely to deviate away from the
accepted norms for fear of being excluded
from the group.
Reasons why stakeholders non-compliance
subscribe to a code of ethics
Limited awareness of accepted norms.
If the individual or group is unaware of the proper
procedures they will be unable to follow them.
Actions may be completely innocent because of a
lack of knowledge.
Inappropriate environmental behavior.
The inappropriate behavior of one individual or group
may be assumed to be acceptable to others (e.g.
going off the trial to take photographs).
Reasons why stakeholders non-compliance
subscribe to a code of ethics
Limited awareness of negative consequences.
Some service providers may be unaware of the
significance of the violation under scrutiny.
Without this knowledge, the code violation is seen as
frivolous.
Perceived irrelevant and unrealistic guidelines.
Non-compliance is rationalized by the fact that the
code is not founded on an understanding of the needs
of service providers or participants.
The feeling is that it may be based on erroneous
assumptions of information.
Reasons why stakeholders non-compliance
subscribe to a code of ethics
Deliberate violations based on financial
gain, ideological protest, revenge, malice
or fun.
This may include, for example, local people
not following a code of ethics because they
have not been asked to do so.
 Type of party that was responsible for
monitoring of the code of conduct
None no monitoring at all
First party the firms themselves
Second party business support groups such
as trade and industry associations
Third party external professionals paid by the
firm which is observed
Fourth party combinations of different actors
(e.g. business support groups and social interest
groups)
Fifth party social interest groups only, without
involvement of the firm
Sixth party legal authorities
 Reporting and Auditing
Reporting can be viewed in two very different
contexts.
The first of these is referred to as wrongdoing
and includes the reporting or whistle-blowing
that often follows from unethical acts in the
organization.
Wrongdoing is defined as behavior which is
morally wrong as well as behavior which is
illegal, unethical, wasteful, inefficient, neglectful,
an abuse of power, or violates organizational
rules or professional standards.
 Reporting and Auditing
The importance of engendering an
environment or culture where people can feel
free to identify and report wrongdoing are:
1. Good people should feel free to step forward and
communicate concerns
2. Policy and practice should not be geared towards
shooting the messenger, but rather towards fixing
the problem
3. Bad news is sought so that small problems dont
fester into big ones.
 Reporting and Auditing
The second context of reporting that has
relevance to codes, and which occurs at a
broader level, is the new trend amongst
multinational enterprises surrounding the
description of environmental and social impacts
of operation through a sustainability report.
Auditing is a process that allows for the
assessment of performance against goals or
other stated criteria.
Key issues surrounding the audit include the
independence of the entity undertaking the
audit, as well as whether the audit is done
internally or externally.
 Enforcement
Enforcement is the last stage in the effort to
implement policy, which entails controlling the
actions of many different stakeholder groups or
targets, including tourists and service providers.
Enforcement is the weakest link in the policy
chain because of problems related to funding,
politics and the failure of organizations to be
effectively coordinated.
Enforcement, and the sanctions that may be
imposed, refers to the consequences of non-
compliance to the code of ethics.
 Enforcement
The sanction is designed to motivate the unit to avoid
breaking its their commitment and to increase the
likelihood that they will comply with the standards.
The key to a successful code of ethics for an industry is
how it is able to police itself.
In any type of business there are at least seven key
principles required for success:
Act in good faith Willingly comply with the law
Exercise due care Respect the liberty and rights of others

Honor confidentiality Respect human well-being

Avoid conflicts of interest

 Enforcement
Dismissal is the most common
punishments for acts contrary to the code
of ethics.
Other enforcement actions include:
Suspension
Probation
Demotion
Negative comments on evaluations