Weaving Ethics into corporate culture: Ethics keep companies and their employees connected and productive

Communication World, June-July, 2002 by Dean Williams

In the 1990s, Nike endured some of the most intense criticism of any corporation for its labour practices. That was the same time that Maria Eitel joined Nike Inc. as the new vice president and senior advisor for corporate responsibility.

"That experience forced us to decide who we were when it comes to corporate social responsibility, and forced us to really figure it out," acknowledged Eitel. The Nike executive was in Toronto last year to participate in the third annual Canadian Business Ethics Summit, a gathering of business leaders, ethics practitioners, academics and non-governmental organization (NGO) representatives from Canada and the United States organized by EthicsCentre.ca.

THINK OF YOUR EMPLOYEES

People have asked Eitel how all the negative publicity hurt business. The obvious answer would have been that it damaged Nike's brand and maybe sales, but her response was both surprising and illuminating: "The way it hurt our business was that it hurt our people. Individual employees at Nike started to wonder what kind of company they were working for and what message was being sent about the people who worked there."

Corporate social responsibility (CSR) and ethics had to be more than just optics and PR, said Eitel. They would have to be implemented at every level of the corporation.

"As long as companies perceive CSR as something 'on the side'-- away from the main business decisions--they will continue to be vulnerable," said Eitel, noting that it is in their everyday business activities that companies have the biggest impact on society.

The challenge for Nike is that the company has to deliver, nor just for public consumption, but internally to the staff, because ultimately they are the ones who have the energy, creativity and skills to create, market and sell its products.

WALK THE TALK

David Simpson of Inerpraxis has noted that Toronto Hydro CEO Courtney Pratt came to the same conclusions when he was with Noranda in the late 1980s and early '90s. Noranda won a lot of awards and positive public recognition outside the company for its social and environmental responsibility.

"Despite all the positives and public recognition, we were still having the spills internally, we were still having the errors, we were still having our accidents," Pratt recalled in his dinner speech at the 2001 Business Ethics Summit.

The company needed to get reality in line with its public image.

"We realized for us to truly be a leader, we needed the total company to be involved. We needed each employee to work consciously to be environmentally responsible and see himself as an environmental ambassador in his community," said Pratt.

If a company is serious about its ethical image, its vision, values, mission and strategy have to become part of its corporate culture, and that means selling those things to employees.

Ultimately Noranda turned its environmental efforts into a competitive advantage, said Pratt. "It helped us in selling our product. It helped us in recruiting and retaining employees. And we believe that ultimately it helped us in creating shareholder value."

COMMUNICATE INTERNALLY AND EXTERNALLY

"The simple fact is that public relations plays an invaluable role in strengthening corporate reputation by helping to communicate ethics effectively both within and outside an organization," said Michael Coates, CEO of Hill and Knowlton Canada, who also spoke at the summit.

"When a company wants to reinforce consistent, ethical patterns of behaviour, effective communication among members of that organisation can make the difference between success and failure," added Coates. "For a company to behave ethically, it must live and breathe its code of conduct, train its personnel and communicate its code through its visioning statements. It cannot just print a manual that sits on a corporate shelf."

As for Nike, Eitel's challenge is to communicate the company's ethics and social responsibility not just to external critics, but to Nike's 500,000 employees in 58 countries. Eitel insisted that Nike has learned that taking the easy way out is not an option.

Like so many businesses and organizations, Nike and Noranda grew to appreciate that a code of ethics is not meant to sit on the shelf and gather dust. It has to become a part of the culture. It doesn't just keep you out of trouble; it has the potential to increase morale, productivity and shareholder value.

Tom Niles of Langdon Starr Ketchum has made the point that it's our obligation as business communicators to argue against short-term PR victories that go against the public interest. After all, your employer/client isn't in it for the short term...and neither are you.

Ethics isn't a PR tool that business communicators dust off in case of emergency. If you're in business for the long term, IABC's Code of Ethics must be an integral part of who you are and what you do. Yes, it can help to keep you out of trouble, but it's so much more than that. IABC's Code can help you to do your job better...if you let it.