Serious about its code of ethics - NYNEX Corp.'s code of business conduct

HR Magazine, Sept, 1994 by Beth Rogers

NYNEX makes ethical conduct a priority by developing a value-based code and allocating people and money to ensure that everyone knows how the code affects them.

Ethics and core values are fundamental to an organization's reputation in the marketplace, says Graydon Wood, vice president of ethics and business conduct at NYNEX. "When it comes to the bottom line, your reputation--the trust that people have in your business--is directly translatable into market share and therefore into corporate success," he says.

In 1993, NYNEX won the first Business Ethics Award given by the Center for Business Ethics at Bentley College in Waltham, Mass. Today, its ethics team works together to ensure uniform application of NYNEX standards. Michael Hoffman, executive director with the center, says the public has a heightened sensitivity to ethical violations. Corporations that try to strengthen their ethical culture need to be recognized and commended in a public forum.

The NYNEX Code of Business Conduct is based on the company's core values-quality, ethics and caring for the individual. The document evolved from a 1990 ethics initiative that established the company's Office of Ethics and Business Conduct and an ethics team representing the company's 80,000 employees. Wood says it took a year to put the code together, including four months to write the initial draft. The draft was submitted to 1,600 employees for their comments including criticism; the company also ran focus groups to get other employee input. All employees have a copy of NYNEX's Code of Business Conduct and, in a company survey last year, 98 percent of them said they were familiar with it.

In 1991, all employees received ethics training, which started with a one-day briefing for top and middle managers and half-day training for all other managers. Non-management employees attended half-hour sessions.

"As a corporation," says Wood, "you have an obligation to widely disperse your values, to widely disperse your standards and expectations in a code of conduct, to communicate and train on those values and standards and to continuously reinforce those values and standards in all communications material."

EVERYONE NEEDS A POLICY

Bentley's Hoffman adds that all businesses would be well served to have their own ethics policy. He says there is no boilerplate code of ethics, but plenty of codes can be used as models. One ethics sample people could use is the Federal Sentencing Guidelines, passed in November 1991. These guidelines govern mandatory, sentences that judges have to mete out if a company is found guilty of doing something illegal or immoral. Penalties can be reduced only if the corporation cooperates with the investigation, or if the corporation can demonstrate that it has done all it can to set an ethical tone such as through the development of an ethics program.

Standard components of an ethics policy might include appointing someone to oversee ethical and compliance programs, training employees about ethics and instituting a hotline or safe reporting system that allows employees to safely report problems or violations. Hoffman feels that the principle of harm is a good guideline: If you think you're going to harm someone, don't do it.

Wood says that a whole set of values, including ethics, is important not just to NYNEX but to business in general. Wood calls NYNEX's core values of quality, ethics and caring for the individual "a fundamental foundation and guidance for action in the business."

NYNEX's code, to a certain extent, is specific to the telecommunications industry when it focuses on things like privacy of communications. Other coverage is generic, notes Hoffman, and includes employee privacy, diversity and sexual harassment--some of the ethical hot-button issues for U.S. employees. NYNEX's code also covers such areas as safety, alcohol and drug abuse, political contributions, competitive information, espionage and sabotage. One section deals with conflicts of interest as they pertain to relationships with customers and suppliers, consultants, gratuities, outside employment, and family and personal relationships.

Wood admits that companies as large as NYNEX can never fully protect themselves against the "renegade" employee. The key thing, however, is how a corporation responds to transgressions. An investigative and disciplinary process that deals with issues in a uniform and equitable fashion, notes Wood, can't prevent wrongdoing, but can help a company take action in a "clear and consistent manner."

ETHICS OFFICERS ON THE RISE

The whole concept of business ethics is about 20 years old, but the field is maturing as colleges and universities add courses in business ethics. The role of ethics officer is even more recent and is still evolving.

The Center for Business Ethics just formed an Ethics Officers Association to further disseminate information and knowledge. Most officers come from within the company, usually from legal, human resources or auditing areas, and most of them have not had any training in the classical definitions of ethics found in philosophy and theology. Wood says that for an ethics officer, the most important criterion is possessing a broad knowledge of the corporation.