I read an article in EthicsMonitor by Cynthia Schoeman called How to Crack Your Company’s Code of Ethics. Cynthia makes some good points about Codes of Ethics that align with our thinking about what good employee training should include. A code of ethics is the foundation on which many ethics and compliance programs are built. Most programs require employees to take code of ethics training at least upon hiring, if not more frequently.
Your Code of Ethics training should address five key elements:
1. Is this a Code of Ethics or a Code of Conduct… or both?
In my few years in the ethics and compliance industry, I’ve encountered a couple of schools of thought on this topic. One is that a Code of Ethics has two parts; the first is on values and the other is the Code of Conduct. Keeping them together is meant to show the connection between building increased commitment to the company’s values and improving compliance with its rules, regulations and policies, which are housed in the Code of Conduct. The other is that a Code of Conduct and a Code of Ethics are separate documents because values and rules are separate things. Either way, both are important and your Code of Ethics training should specify for your employees what type of document(s) they’re being trained on and why the company chose that format; it may seem like a trivial detail but employees need to understand it.
2. What is the Purpose of the Codes?
Your training should teach employees why you have a Code of Ethics and a Code of Conduct as well as the purposes of those documents. The purpose of the Code of Ethics is to document the company’s values. The purpose of the company’s Code of Conduct is to establish the acceptable standards of behavior for employees, and the rules and regulations that govern those standards. There are links; for instance, the value of integrity is clearly linked to a behavior and rule/law(s) around anti-corruption. The Code of Conduct is sometimes thought of as a “master policy” that governs all others. We often use the analogy that the Code is like the Constitution and policies are like the laws. Most Codes include a summary of a particular issue – say bribery – and point readers to the full version of the policy for more extensive detail.
3. Our Code is Authentic, Not Just Words
A company’s Code of Ethics will not be effective if employees just see it as “paper values.” If the organization doesn’t walk its talk and actually live the values it professes to have, that will create ethical gaps for employees, which will erode trust. As Cynthia writes “Fairness and the consistent application of all policies to all stakeholders are crucial to ensure the code of conduct is seen as a legitimate mechanism. There cannot be different or selective applications of the code and its policies.” Your Code of Ethics training is one way to establish the authenticity of the values for your employees, but it’s also only one part of a comprehensive program. To ensure that the Code becomes the cornerstone of an ethical culture, you must nurture on-going awareness and knowledge. You can do that by including a snippet of the Code in each employee newsletter, putting a CEO video message on your employee portal, hosting an “ethics week,” and many other ways.
4. What Happens When the Code Is Violated
Code of ethics training tends to devote a lot of time to teaching employees what to do and why, but don’t forget that employees also need to understand the consequences of NOT following the Code. Training should ensure employees understand who is subject to the Code, what happens if any portion of the Code is violated and what the employees’ responsibilities are in terms of reporting noncompliant behavior. The Code should also be reviewed annually to ensure that it complies with current legislation and promotes best business practices; any changes should be reflected in an updated version of the training.
5. Our Code is an Easy-to-Understand Reference For You
We’ve often professed that Codes should be written in clear, plain language so that they are understandable to all employees and should be translated into local languages for employees in other geographies. You’d be surprised how many companies think it’s just fine to ship a Code written in English to non-English-speaking employees. (Check out this illustration we developed with OCEG on the Next Generation Code of Conduct). Your training should communicate to employees where they can find the Code and that they are always welcome to reference the Code anytime they need guidance.
We have a very talented team at The Network that has developed Codes of Conduct for some of the world’s most recognizable brands; check out the Codes they’ve done for Newell Rubbermaid, Disney, JPMorgan Chase, and Cisco Systems. A company’s Code of Ethics and Code of Conduct are critical for establishing a commitment to ethics, values and compliance and the accompanying training should ensure that employees truly feel that commitment.