New world: print, post, and pray just won't make it anymore regarding ethics codes. An ethics architecture is needed. Here are some guidelines

T+D, August, 2003 by Tim Hatcher

So, what distinguishes an Enron from a Southwest Airlines? Enron and its ilk mistakenly separated compliance from values. They tended to reduce ethics to a checkmark on an audit report or the number of employees trained. Says Gilman, Enron's compliance-oriented code of ethics wasn't based on values, but on three Ps--print (a code of ethics), post (on bulletin boards and the company Website), and pray (that employees read and adhere to it). So, even if a company has a well-developed code of ethics and does plenty of ethics training, people consistently doing the right thing is hit or miss if the focus isn't on values and on systematically building a culture and climate that encourage and reward ethical behaviors. Values are hard to teach, but they can be reinforced and ethical behaviors can be rewarded. Sticking with the example of Enron, managers were rewarded more for making the deal than doing the right thing. At companies such as Royal Dutch Shell, meeting financial targets results in rewards but so does managers' values-based performance. At Guardsmark, a Memphis-based security firm, ethical leaders are developed by example through executive modeling. Guardmark's code of ethics is rewritten annually, with input from employees, and applies to all team members. In those and many other companies, values are becoming an integral part of employee and management development and assessment.

Critics of values development declare "there's no way to teach ethical values. People come to organizations with their values already intact." Gilman responds that may be true, but HR has a responsibility to shape employee expectations and companies can mold employees' behaviors because expectations form behaviors; as behaviors change, so do values.

The role of training--and this is important--is to develop positive behaviors through clear ethical expectations. And training can do more than establish expectations: It can set up behavioral objectives through performance-based training that shows employees exactly what behaviors and attitudes are expected. Performance-based training tied to HR-related reward structures, such as annual performance appraisals, can help employees attain and master ethical behaviors and seek rewards for behaving in an ethical manner.

In addition, a system of ethical checks and balances is an important phase in the development of a values-based culture. Several HR-related activities can be arranged into a systematic approach to build an ethical climate. That approach, called an ethics architecture, is based on a synthesis of current approaches to corporate ethics and is designed to keep companies from becoming another Enron, though it's not a guarantee.

Building an ethics architecture

Compliance and values. An ethics architecture starts by identifying all compliance and values drivers-items that create the need for a focus on ethics. They include compliance, laws, rules, regulations, principles, and best practices. An example is the U.S. Federal Sentencing Guidelines. But more than compliance, there needs to be a focus on values that the organization considers critical to success, such as trust and loyalty. These values originate from the industry, the company, the culture, and employees and can be operationalized in a clear code of ethics.