Why ethics?

Clearly defined core values are a must for success. Here's why - and how - to lead an ethics initiative.

When I spoke recently to association executives about the benefits of ethics programs, one finally asked the question everyone wanted answered: "Given all my existing challenges, with the limited time, personnel, and financial resources my organization can bring to any given initiative, how high a priority should I - can I - give to a member ethics program?"

I listed the many benefits an ethics program could bring to his association and its members, but in retrospect, I believe he was asking an even more fundamental set of questions.

I think he wanted to know how he could persuade his leadership to make ethics a priority. He was also asking how he could justify the expense in light of limited organization resources. My questioner was concerned that such a project would seem peripheral to the association's mission or even contrary to members' business interests.

Lastly, I also heard him saying, "This all sounds like a wonderful idea, but on my list of priorities (or my board's), it currently does not rank in the top 10, and I am likely only to accomplish the top 5-7."

Making the case

One way of persuading association leadership that an ethics initiative is important is to point to for-profit sector accomplishments in the last 20 years. In corporate America, two events spurred companies to invest in comprehensive ethics drives. First, defense procurement problems in the mid-1980s led to the Defense Industry Initiative on Business Ethics and Conduct (DII), a nationwide self-regulation effort by defense and aerospace contractors.

DII members pledge to develop, implement, and communicate a code of ethics to all employees; provide orientation and training programs on the principles addressed by their code; and create internal reporting mechanisms and voluntary disclosure procedures. In addition, the more than 50 signatory companies openly share ethics and compliance best practices with each other and routinely offer operations information in a public accountability report.

Second, the Federal Sentencing Commission passed the Federal Sentencing Guidelines in late 1991, providing economic incentives for organizations that institute "effective program(s) to prevent and detect violations of the law." The commission also recommended steps organizations could take to develop such programs - many of which constitute the corporate compliance-oriented programs seen today. (The guidelines set substantially lower fines for companies with effective programs to detect and prevent corporate wrongdoing.)

Since the 1980s, companies have added a great deal to the predominantly compliance-oriented perspective the guidelines laid down. In essence, they explicitly recognize that ethics and values are the foundation of any organization's compliance effort. Interest in ethics also helped put compliance efforts into perspective, showing that compliance is critical in a comprehensive ethics and integrity initiative.

Ethics initiatives thus have become a vital factor in corporate management. They simply make good business sense. Beyond the example set by some for-profit institutions, why is it important for your association to launch an ethics program? There are five fundamental reasons to do so.

The five imperatives

Associations fill a unique role: They are able to address entire industries, to represent many with one clear voice, and to effect change. Associations' responsibilities are also great. Your industries may vary, but an association's mission is to support its members - to provide the resources, knowledge, and expertise they need. An industrywide ethics initiative is exactly the kind of leadership that can be meaningfully supplied by associations.

Why provide such leadership?

The moral imperative. Nearly everyone prefers to operate in an environment where they can act with personal integrity - where people can behave in accordance with their values. An ethics initiative examines the degree to which the current working environment meets that standard, determines where the workplace falls short, and supplies the steps to create such an environment - by correcting the shortfalls.

The pragmatic imperative. Good ethics is also good business. An ethical working environment minimizes employee distrust, anger, hostility, and fear. An ethics initiative often clearly defines the sources of negative elements in the work environment. It also sets standards for dealing with external stakeholders such as members, suppliers, and competitors.

The legal imperative. The Federal Sentencing Guidelines prescribe staggering fines, as well as opportunities to mitigate such fines, in an effort to encourage effective ethics programs. "[A]n effective program to prevent and detect violations" minimizes exposure of the organization and its officers and employees. It lessens the likelihood that individuals within the organization will unintentionally place the organization or themselves in legal jeopardy.

The perceptual imperative. Perception is reality; if others perceive your industry (or organization) as ethical, they will treat it more favorably. Likewise, being perceived as unethical could be damaging to your organization. An effective ethics initiative serves the organization when others recognize that you work actively to set and meet the highest ethical standards in everything you do.

The change imperative. As the business sector changes at an ever-increasing rate, the only true constants are the values and principles the industry (or the organization) holds. An ethics initiative helps define those core standards and ensures that your employees have a stable foundation for making critical decisions in the absence of policy, procedure, or precedent.

Getting started

Now that we know why organizations should have an ethics program, the question is how to develop one. To begin, every association - no matter - its size, no matter its industry - must ask itself these key questions. (For details, see sidebar, "The Seven Questions. ")

1. Why do good people do bad things?

2. What are our organization's values?

3. Have we adequately articulated our values internally and externally?

4. Does our organization have written ethics policies, procedures, or structures?

5. To whom is our organization accountable?

6. What is success?

7. Is ethics a leadership issue in our organization?

Associations have grappled with these questions (and their answers) for years. A 1996 ASAE survey reports that 52 percent of associations today have a code, of ethics governing their industries and professions. Historically, however, association executives have not led the charge to develop comprehensive ethics programs. In 1980, only 16 percent of association codes were implemented at an executive's directive, and more than half of the codes were developed at the request of association members. This was the surprising finding of a 1980 study conducted by the Ethics Resource Center, Washington, D.C., which looked at association codes of ethics.

At that time, the association community reported that more than half (57 percent) of its codes had existed for 15 years or more, and 72 percent of those required members to accept the code.

But a code is only one of several components required for an effective, evolving ethics program (see sidebar, "Key Ethics Program Components"). The following two examples of industrywide efforts highlight other elements.

Fostering ethical health care

The American Hospital Association, Chicago, began its organizational ethics initiative in 1995. Faced with dramatic changes throughout the health care field, AHA stepped up to help members define a set of values by which they could measure and make ethical decisions. In its Management Advisory, on Ethics, AHA states that "health care institutions, by virtue of their roles as health care providers, employers, and community health resources, have special responsibilities for ethical conduct and ethical practices that go beyond meeting minimum legal and regulatory standards."

Because of these special responsibilities, AHA's leadership felt driven to provide tools members would need to implement a comprehensive ethics initiative.

AHA convened a member task force with a wide cross section of representatives - from small rural clinics to large. urban health care centers. The result? A case statement that calls each and every member to ethical behavior.

Several case statement highlights are worth studying. It affirms that "all organizations have an obligation to operate ethically"; that "ethics programs are a means of meeting and improving public confidence and trust in health care institutions"; and that "a commitment to a sustained ethical environment can be a direct force in heightening the excellence, efficiency, productivity, and morale of any health care organization."

The case statement continues, "All those who would presume to foster such an essential public good as health also must assume the responsibility of public trust." Since such trust goes beyond legal or purely business obligations, the statement focuses on the core notion that "it is essential that all health care organizations operate in a caring and ethical manner."

The organization has also produced

* the Guidebook for Implementing An Organizational Ethics Initiative;

* a self-assessment tool to help gauge each member organization's ethics efforts and culture;

* an ethics survey for health care organizations to self-administer; and

* a collection of exemplary hypothetical situations for member use.

Future plans call for regional interactive workshops for members to learn more about the nuts and bolts of implementing health care ethics programs and to share best practices.

A model environmental code

The Environmental Industry Associations, Washington, D.C., recently initiated a landmark, industrywide model code of ethics for the $70 billion waste industry.

EIA developed its program, "Doing Our Best - A Matter of Integrity," in consultation with the Ethics Resource Center and with an EIA Research and Education Foundation grant. The program includes a model code of conduct, values statement, and ethical principles; it also offers helpful tips member companies can use to implement and reinforce the code. EIA reports a positive response both within and outside its membership.

Planned communication reinforces the entire program time and again through coverage in EIA's monthly magazine, WasteAge; newsletter articles; and conference seminars.

In the planning stages is a pilot program to bring together industry leaders, providing a catalyst to encourage adoption of industrywide ethics standards. Benchmarking surveys of an initial 10-15 companies will provide comparison data for surveys planned for after program rollout in 18-24 months.

Play a role in the future

What have the 1980s and 1990s meant for association ethics programs? Did the scandals of the 1980s and the sentencing guidelines have a ripple effect on U.S. associations? Do associations provide more aggressive ethics leadership now? Have associations begun addressing both compliance and values?

What is your association's position on codes of ethics? Do you have one? Do you have a comprehensive program for your members? Do you need one?

Join us in answering these questions and others in the ASAE/Ethics Resource Center survey accompanying this article. Help us benchmark ethics challenges in the association community. We will then compare those data against similar surveys in corporate America. You can help us understand trends in association ethics programs - strengths as well as weaknesses, how far we have come, and what work we have left to do.

RELATED ARTICLE: Find Out What and Why

By completing the ethics survey printed with this article, you will help the association community begin to benchmark a critical aspect of the character and role of associations. We also think you'll find the survey questions interesting to consider.

Please fill out the survey, which appears on pages 32-33, and mail it to the Ethics Resource Center, Data Processing Unit, 8325 Brubaker Dr., Roanoke, VA 24019, or fax it to [phone].

Results of the survey will be published in a future issue of ASSOCIATION MANAGEMENT.

RELATED ARTICLE: The Seven Questions

1. Why do good people do bad things?

* To meet goals or deadlines.

* Because of lack of organizational loyalty.

* Because of how "success" is measured.

* Because of specific incentives.

* They feel entitled.

* They believe that rules don't apply to them.

* They believe that the act is not illegal or unethical.

* They believe that the activity is in the organization's best interest.

* Peer pressure.

* A lack of resources.

* Because "the cause is just."

* Fear.

2. What are your organization's values?

* Does your organization have clearly articulated vision and mission statements?

* Have you also articulated your organization's values?

* If you asked your staff, donors, members, suppliers, and other stakeholders what your organization stands for, what would they say?

3. Have you adequately articulated your values internally and externally?

* Do you have a written ethics code/credo?

* Have staff and other stakeholders had an opportunity to provide input into the code/credo?

* Are the ethical implications of decisions or policies openly discussed in meetings?

* Is ethics a factor in hiring, promotion, and termination decisions?

* Is ethics a component of regular training?

* Do you regularly articulate your organization's values through communication channels?

* Do stakeholders' values significantly differ from those of your organization?

* Is there a large gap between your organization's existing values and those to which you aspire?

* Is there a large difference between management and staff values?

4. Does your organization have written ethics policies, procedures, or structures?

* Do you have written policies that further reinforce your organization's ethical values?

* Do you have procedures in place that employees can follow when asking an ethics question or reporting an ethics concern?

* Do you have an ethics management and reporting structure?

5. To whom is your organization accountable?

* Who are your stakeholders?

* To whom does your organization owe specific obligations?

* Who can hold your organization accountable?

6. What is success?

* How is success defined within your organization?

* What do stakeholders, employees, board members, and donors perceive as success?

* How do you measure success?

* What incentives do you have in place?

* What effect do such incentives have?

7. Is ethics a leadership issue in your organization?

* Does your organization's leadership regularly communicate the importance of ethics to fulfill your mission?

* How does your organization's leadership walk its talk?

* Does your leadership make ethics a priority issue when it is appropriate to do so?

RELATED ARTICLE: Key Ethics Program Components

The following 12 components are necessary to develop, implement, and manage an industrywide, comprehensive ethics program.

1. Focus on ethical leadership

2. Vision statement

3. Values statement

4. Code of ethics

5. Designated ethics official

6. Ethics task force or committee

7. Ethics communication strategy

8. Ethics training

9. Ethics help line

10. Ethical behavior - rewards and sanctions 

11. Comprehensive system to monitor and track ethics data

12. Periodic evaluation of ethics efforts and data

Michael G. Daigneault is president of Ethics Resource Center, Washington, D.C.