Do the right thing: ethics training programs help employees deal with ethical dilemmas

HR Magazine, Feb, 2005 by Kathryn Tyler

Three days before Senator Paul Wellstone died, he told me, 'Keep doing what you're doing,'" speaking about ethics, recalls Nan DeMars, an ethics speaker and author in Minneapolis.

Wellstone, who died in a plane crash in 2002 while campaigning for re-election to the U.S. Senate from Minnesota, told DeMars, "I have a conversation with each employee on the first day: 'If I get puffed up with the importance of being a senator and slide off the ethical compass, I want you to shore me up.'"

"If every boss would have that attitude with every employee, we would be far ahead" in creating an ethical workplace culture, DeMars says. Wellstone, she says, understood the importance of having ethical discussions with employees, an increasingly popular concept.

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Spurred by corporate scandals and surveys showing how little employees trust executives, many companies have started establishing codes of ethics governing the way they operate.

Ethics training at corporations gained traction in the mid-1990s in response to the Federal Sentencing Guidelines for Organizations (FSGO) of 1991.

"FSGO set minimum standards in order to lessen penalties if an organization is found responsible for misconduct," says Patricia J. Harned, president of the Ethics Resource Center (ERC), a nonprofit organization in Washington, D.C. Although voluntary, "many companies comply with FSGO, which requires implementation of a code of conduct, ethics training, high-level oversight, establishment of an ethical culture and periodic measurement of program effectiveness," she adds.

Ethics training got another boost with the passage of the Sarbanes-Oxley Act of 2002, which requires publicly traded companies to disclose whether they have adopted a code of ethics for senior officers.

"More for-profit companies have provided ethics and compliance training than ever before," says Harned, citing 2003 research by the ERC showing that 54 percent of employees say their organizations provide ethics training.

Today, companies are revamping their ethics training programs in response to an amendment to the FSGO of 1991, which went into effect Nov. 1, 2004. This amendment outlines much stricter ethics training requirements and emphasizes creating a legal and ethical company culture.

"Companies are moving away from the notion of having 'ethics programs' and focusing on encouraging a culture committed to ethics and compliance," in which ethics is part of almost every business discussion, says Dov Sideman, chairman and CEO of LRN, a legal and educational consultancy in Los Angeles.

The Benefits

Most companies begin ethics training to comply with legal mandates and to gain liability protection. While that is a strong rationale, the training may also improve employee morale, recruitment and retention.

With ethics training as a foundation, ethical issues "will be dealt with before they become serious concerns," says Stephen M. Paskoff, Esq., president of ELI, an ethics training company in Atlanta. "Your organization will develop a reputation of fairness," candidates will want to work for you, and other companies will want to do business with you.

"People want to work for leaders they trust," adds Dwight "Ike" Reighard, chief people officer at HomeBanc Mortgage Corp., a financial institution in Atlanta.

DeMars agrees: "When employees walk out of an ethics workshop, they feel proud of their companies. They feel empowered" to make the right ethical decisions.

The Logistics

To establish an ethics training program, first set standards for ethical behavior at your organization and determine what you want the training to accomplish, says Paskoff. Companies should outline goals for the training and produce documents to support it, such as a code of ethics.

To be effective, the training must be mandatory for all employees. "All members of an organization should participate--from the boardroom to the shop floor. If leadership is exempt, it sends a clear message to employees that some people are exempt from the rules," says Harned.

Ethics training should include the following: a copy of the organization's code of ethics, a discussion of relevant compliance laws, an ethical decision-making model, resources for help and role-playing scenarios.

A code of ethics. Employees should receive a copy of the code of ethics and should understand the underlying meaning. Marty Taylor, vice president of organizational services for the Institute for Global Ethics, a nonprofit organization in Camden, Maine, says strong ethics programs cover five elements: responsibility, respect, fairness, honesty and compassion. Your company's code of ethics should define these elements and set the appropriate behavioral standard.

Other hot ethical topics are workplace romance, e-mail appropriateness, Internet use, confidentiality, security and harassment--physical, verbal and emotional, says DeMars.

Compliance laws. Employees must comprehend laws that apply to their jobs. For instance, managers who conduct applicant interviews need to know if any questions are illegal. Employees who receive vendor gifts must understand the legal limits--or the limits placed by employers--on the dollar value of any gifts.