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

See the American Institute of Certified Public Accountants aicpa.org/sarbanes and the Securities and Exchange Commission FAQ site http:llsec.broadday light.com/sec/index.html

U.S. Federal Sentencing Guidelines

Like individuals, organizations can be found guilty of criminal conduct, fined, sentenced to probation, ordered to make restitution to victims, and exposed to applicable forfeiture statutes (United States Sentencing Commission, 1991). Because companies can be held responsible for employee actions, and, historically, sentencing had been inequitable based on the crime, in 1991 the United States Sentencing Commission (judicial branch) established U.S. Federal Sentencing Guidelines to mitigate the potential fine range (up to 95 percent) if a company can demonstrate an effective ethics program to "prevent and detect violations of law."

Objectives of the guidelines are to develop a "good corporate citizenship, fairness in corporate sentencing, and incentives for companies to initiate crime-controlling actions." The guidelines' two primary purposes of "just punishment" and "deterrence" should be reflected in a company's ethics compliance program, including

* compliance standards and procedures reasonably capable of reducing the prospect of criminal activity

* high-level staff involved in oversight

* due care in delegating substantial discretionary authority

* effective communication to all levels of employees

* reasonable steps to achieve compliance, including systems for monitoring, auditing, and reporting suspected wrongdoing without fear of reprisal

* consistent enforcement of compliance standards, including disciplinary mechanisms

* reasonable steps to respond to and prevent further similar offenses upon detection of a violation.

For an overview, visit United States Sentencing Commission ussc.gov For a thorough understanding of the guidelines and Sarbanes-Oxley Act, consult a

Ethical behavior in the workplace is in the spotlight, now more than ever. As business climates continue to change, it's important for companies to adopt long-term and substantive changes in character and values development.

That means developing an approach called ethical architecture. Hatcher says that companies need to start by focusing on values and on systematically building a culture and climate that encourage and reward ethical behaviors.

The first step is to identify 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. Next, form strategies that help guide ethical behaviors among employees. Each strategy and driver affects each employee's activities, tasks, and responsibilities.

An organization also must have procedures, such as performance appraisals, and tools, such as a code of ethics or mission statement, to establish and reward ethical behaviors. Ongoing evaluation ensures that the ethics architecture is actually sustaining ethical behaviors.

Some leading companies are taking key initiatives such as modeling ethical behavior, using hiring and training to build an ethical climate, and making ethics a trainer competence.