Instilling ethical conduct.Why your association needs an organizational ethics Organizational Ethics is the ethics of an organization, and it is how an organization ethically responds to an internal or external stimulus. Organizational ethics is interdependent with the organizational culture. program.
Employee misconduct is on the rise, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. is pervasive, attorney's fees attorney's fee n. the payment for legal services. It can take several forms: 1) hourly charge, 2) flat fee for the performance of a particular service (like $250 to write a will), 3) contingent fee (such as one-third of the gross recovery, and nothing if there is no are outrageous, and juries return judgments in amounts overwhelming to most organizations. In this hostile environment See: operational environment. , ethical conduct is more critical than ever and requires more than cosmetic efforts.
The United Way experience is a haunting A Haunting is a television series on Discovery Channel that, according to its website chronicles the "terrifying true stories of the paranormal told by people who experienced real-life horror tales. reminder of what can happen when defining and inculcating responsible conduct are not priorities of the association's chief executive officer and board of directors. Associations face daily ethical dilemmas. I'm told by association friends that conflicts of interest, kickbacks, misuse of association property, diversion of association funds, and incomplete financial reporting are common issues faced in their organizations.
One notable story involves an association CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. who lobbied his board to relocate the national office. The board approved buying out the CEO's residence based on an independent appraisal. When the appraisal arrived, the executive disagreed with the designated value, suppressed the report, and arranged for an appraisal that met his expectations. The new figure was significantly higher than the first, and the board did not learn of the first appraisal until several years later when the chief executive retired. This occurred despite the existence of a code of ethics Code of Ethics can refer to:
Ethical dilemmas do not always involve money. In January of this year, the coach of a national sports organization was dismissed for allegedly having sex with three of his young female players. The coach admits he had sex with these females, but contends that the acts were consensual and occurred after the women were of age. Assuming the acts were legal, do they constitute ethical and responsible conduct? The organization's board did not think so and now faces a $1 million lawsuit for wrongfully dismissing the coach.
Addressing ethics is your Job
Like many organizations in America today, yours probably has a code of ethics and some commitment to ethical leadership. (See the "Leading" column "Codify codify to arrange and label a system of laws. Your Ethics" in this issue of ASSOCIATION MANAGEMENT.) You may even have created an ethics committee ethics committee A multidisciplinary hospital body composed of a broad spectrum of personnel–eg, physicians, nurses, social workers, priests, and others, which addresses the moral and ethical issues within the hospital. See DNR, Institutional review board. to address concerns as they arise. Beyond these initial efforts, however, probably little else has occurred. Your association probably lacks a written plan outlining how to encourage ethical behavior. Furthermore, financial resources committed to the ethics initiative most likely are nominal.
Did you know that ASAE ASAE American Society of Association Executives
ASAE American Society of Agricultural Engineers (Society for Engineering in Agricultural, Food, and Biological Systems)
ASAE Alkali-Sulfite-Anthraquinone-Ethanol has formal, written standards of conduct, published in Who's Who Who’s Who
biographical dictionary of notable living people. [Am. Hist.: Hart, 922]
See : Fame in Association Management, that, as a member of ASAE, you are expected to follow? The code requires you to actively promote and encourage the highest level of ethics within the industry or profession your association represents.
I do not intend to criticize your association's efforts. Ethics codes and committees are necessary and desirable. In fact, if your association does not have a code and committee, you need to create them. But these two steps alone do not constitute a complete and effective organizational ethics program.
How much effort is enough?
Last year, I attended a conference of corporate ethics officers representing organizations that had developed formal ethics Formal ethics is a formal logical system for describing and evaluating the form as opposed to the content of ethical principles. Formal ethics was introduced by Harry J. compliance programs. I met an attorney who boasted that he worked for a nationally prominent insurance company - an "ethical" company that always did the right thing. Taken aback by his bravado bra·va·do
n. pl. bra·va·dos or bra·va·does
a. Defiant or swaggering behavior: strove to prevent our courage from turning into bravado.
b. , I asked him how he had determined that his company was ethical. He replied that the company had developed a code of ethics and created posters and brochures. The CEO had made a video outlining his desire that everyone act ethically. I was unimpressed by the insurance company's superficial efforts. And this representative of a supposedly leading-edge company gave no examples of ethical dilemmas and how the company's response reflected a responsible decision.
Although there were many outstanding conference presentations, several weeks later I learned that three presenting organizations were involved in serious ethical and legal controversies. One of them agreed to pay millions to settle claims of fraudulent sales practices. Another recently lost several lawsuits stemming from product defects. The unsettling un·set·tle
v. un·set·tled, un·set·tling, un·set·tles
1. To displace from a settled condition; disrupt.
2. To make uneasy; disturb.
v.intr. aspect of these verdicts was the punitive damages Monetary compensation awarded to an injured party that goes beyond that which is necessary to compensate the individual for losses and that is intended to punish the wrongdoer. imposed because of company attempts to hide crucial evidence. The third organization is under investigation for price-fixing and solicitation of unlawful payments in exchange for favorable concessions. These examples show that having a code and committee is not enough.
Due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired.
The consequences of improper behavior by an association include
* debarment de·bar
tr.v. de·barred, de·bar·ring, de·bars
1. To exclude or shut out; bar.
2. To forbid, hinder, or prevent. from participation in federal programs;
* multimillion-dollar judgments;
* outrageous attorney's fees;
* public humiliation Public humiliation was often used by local communities to punish minor and petty criminals before the age of large, modern prisons (imprisonment was long unusual as a punishment, rather a method of coercion). and lost member confidence; and
* tarnished reputations and careers.
Another compelling reason for effective ethics programs is found within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Sentencing Guidelines. Federal district court judges use these when sentencing organizations convicted of federal crimes. The guidelines provide for significant reductions in fines and penalties if an organization has implemented an effective program of ethics and legal compliance.
To obtain a reduction in a fine or penalty, prior to an offense, the organization must have made a genuine institutional commitment and exercised due diligence to prevent and detect violations of law. Under the guidelines, due diligence at a minimum requires that the organization take the following steps:
* Establish compliance standards and procedures capable of reducing the prospect of criminal conduct.
* Assign high-level personnel to oversee compliance with standards.
* Use due care not to delegate substantial discretionary authority to individuals who the organization knew - or should have known - had a propensity to engage in illegal activities.
* Communicate standards to all employees by requiring participation in training programs or by disseminating publications that explain in a practical manner what is required.
* Use monitoring and auditing systems reasonably designed to detect criminal conduct and install a reporting system whereby employees can report unlawful activity by others within the organization.
* Consistently discipline those who violate the standards.
* Respond appropriately to violations and act to prevent further similar offenses, including any necessary modifications to the organization's ethics program.
Ethics program steps
The challenge is to implement the sentencing guidelines' recommendations so that your association's organizational ethics program reflects its unique needs and character. The following steps are crucial to the success of any organizational ethics initiative.
1. Ensure that the governing body Noun 1. governing body - the persons (or committees or departments etc.) who make up a body for the purpose of administering something; "he claims that the present administration is corrupt"; "the governance of an association is responsible to its members"; "he makes a genuine commitment to the ethics initiative and devotes enough financial resources to develop and maintain the program.
2. Assign a single senior manager who reports directly to the CEO to oversee day-to-day aspects of the ethics program. This person also should be familiar to the board.
3. Commission an independent assessment of the organization's current ethical climate. Confidential personal interviews, focus groups, and an anonymous written survey will answer the following questions:
* What types of ethical dilemmas do staff and volunteers commonly face?
* How are these dilemmas resolved?
* Has unethical unethical
said of conduct not conforming with professional ethics. or unlawful conduct ever occurred?
* What was the nature of that conduct, and why did it occur?
* How frequent was it, and does it still occur?
* What are staff perceptions about the organization's ethical climate?
4. Next, commission an independent ethics audit to compare the organization's existing ethics program to state-of-the-art possibilities and determine program effectiveness.
5. Create an ethics task force to receive assessment and audit findings. With this information, the task force develops recommendations for an ethics initiative, incorporating United States Sentencing Guidelines suggestions.
6. Include in the ethics program a strong training component focused on common ethical dilemmas faced by staff and volunteers, reasons for unethical conduct Behavior that falls below or violates the professional standards in a particular field. In law, this can include Attorney Misconduct or ethics violations. The standards for conduct to be observed by attorneys can be found in the Code of Professional Responsibility; members of , the process of ethical reasoning, and the organization's ethical values.
7. Have each supervisor develop an action plan addressing how he or she will promote ethical conduct.
8. Create an ethics advisory hotline so that employees and volunteers can seek guidance confidentially.
9. Institute a reporting system that encourages staff to come forward with ethical concerns or violation reports. Prompt resolutions can avert full-scale crises.
10. Publicize pub·li·cize
tr.v. pub·li·cized, pub·li·ciz·ing, pub·li·ciz·es
To give publicity to.
publicize or -cise
[-cizing, -cized] the ethics program throughout the organization using media such as e-mail, brochures, videos, posters, and newsletters.
11. Ensure that the governing board Noun 1. governing board - a board that manages the affairs of an institution
board - a committee having supervisory powers; "the board has seven members" reviews the ethics program at least quarterly.
Employee and volunteer misconduct, fraud, scandal, corruption, and litigation are real threats to every association. But you can take an affirmative, active approach that will greatly minimize these threats. Don't be complacent about your organization's code. Remember, your ASAE standards of conduct require you to actively promote ethics within your association and industry. Don't wait. Spread the message and take charge. The rewards are substantial.
RELATED ARTICLE: Nine Reasons to Ride the Ethical High Road
1. To demonstrate and reflect your organization's commitment to and expectation of ethical behavior.
2. To encourage ethical decisions and responsible behavior.
3. To preserve the public's confidence in your organization and its products and services.
4. To provide an organizational conscience that helps staff and volunteers responsibly face and overcome the ethical challenges they encounter in the association's service.
5. To improve morale by strengthening your organization's relationship with employees, members, and the governing body.
6. To mitigate possible fines and penalties under the United States Sentencing Guidelines.
7. To provide a framework for resolving ethical dilemmas before they develop into serious litigation, fraud, or corruption.
8. To protect your profitability.
9. To reduce the threat of employee misconduct, fraud, scandal, corruption, and litigation.
Louie V. Larimer is president of The Latimer Center For Ethical Leadership, Inc., a Colorado Springs, Colorado The City of Colorado Springs is the second most populous city (after Denver) in the state of Colorado and the 48th most populous city in the United States. The city is the county seat of El Paso County. , firm consulting in organizational ethics and compliance issues. E-mail: email@example.com.