Implementing Ethics in the
Workplace:
Creating the Process
(Abridged version)
a program of the
Greater Omaha Business Ethics Consortium
at Creighton University
Sponsored by
The Seven Sentencing Guidelines
1. Having Standards
2. Assigned Responsibility - Adequate
Resources
3. Due diligence in Hiring
4. Communications and Training
5. Monitoring, Auditing, Reporting
6. Promotion and Enforcement of Ethical
Conduct
7. Reasonable Steps to Prevent Misconduct
The Challenge is Doing More with Less
1. Have a Plan - preferably a long range plan
2. Have support at the Top and an “Ethics Team”
3. Get an Ethics/Compliance Committee Chartered
4. Put in place a “Code of Conduct”
5. Get a Helpline Set Up
6. Communicate to Managers/Employees
7. Do Some Training - E-Mail,Web,Video,
8. Attend Other Meetings or Training Sessions
9. Give Leaders Ethics Messages to Send Out
10. Use the Company Website Extensively
11. Follow in the Wake of Critical Events
12. Regularly Report on Numbers, Issues to Mgt.
Every Company is Unique
Leadership
History
Culture
Policies
Practices
People
Regulatory Environment
Gallup Organization Findings
Tone at the Top
VALUES
One of the
Seven Demands of Leadership
Gallup Research Based Findings
During nearly forty years of research and
tens of thousands of interviews, Gallup
has determined the
Seven Demands of Leadership.
These are behaviors of individuals who
are perceived as leaders within their
organizations, communities and
nations.
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WHAT GREAT LEADERS DO MOST
- the most commonly expressed demands
Gallup Organization
VISIONING
7
D
E
M
A
N
D
S
MENTORING
BUILD A CONSTITUENCY
CHALLENGING EXPERIENCES
MAKING SENSE OF EXPERIENCES
STABILIZING VALUES
KNOWING SELF
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Allocation of Time
For Creating Alignment
Gallup Organization
Typical
0-5%
90-100%
0-5%
Identifying
Core Values
Drafting & Redrafting
Statements
Creating
Alignment
Desired
10-20%
0-5%
80-90%
Identifying
Core Values
Drafting &
Redrafting
Statements
Creating
Alignment
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Organization and Personnel
How to Manage
Organizational Ethics?
1. Create a formal program w/resources
2. Put someone in charge of it
• General Counsel
• HR director
• Internal auditor
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Report to…
•
•
•
•
CEO
Board of Directors
Committee of the Board of Directors
Senior Executive
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Support for Managing
Organizational Ethics Programs
Ethics and Compliance Officer Association
http://www.theecoa.org/
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Compliance
with Laws
SWEET
SPOT
Compliance and Ethics Program
Ethical
Behavior
BCBSNE Compliance Organization
Board of Directors
Audit & Compliance Committee
Corporate Compliance Officer (VP Level)
Compliance Department (with dedicated Staff)
Compliance Cross Functional Team Members
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Responsibilities
1.
Provide Guidance and Answer Questions

Create and Assist in Creating Policy & Procedure

Develop and Deliver Training

Foster Awareness & Encourage Ethical Behaviors
2.
Respond to Auditors and Regulators
3.
Respond to Complaints (Receive/Investigate/Document/Resolve)
4.
Liaison with the Board of Directors
5.

Listen

Report
Keep Current on and Facilitate Compliance with Laws and Regulations
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Communication & Training
Getting the right message out
What is communicated?
Ethics Materials:
Mission
Values
Code of conduct/ethics
Policies
Decision methods
Your culture
Ethics program:
Who is the Ethics Officer? How to
make contact?
Senior Management
Commitment to Ethics:
Why organizational ethics matters?
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Methods of Communication
Evaluate current ethics communication lines
– Formal and informal
– downward, upward, and two way
Clear, consistent, credible messages across
communication lines
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More about Methods of
Communication
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Hiring Announcements
Website
Email
Brochures
Meetings – Formal & Informal
Orientation sessions
Newsletters
Manuals
Code Handbooks w/certifications
Badges and Wallet Cards
Key Fobs
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Ethics Training
Design for individual groups
Groups:
– new recruits
– existing employees
– top management
– local management
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Ethics Training
 Live
 Computer based
 Trainers
 Certification
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Helplines/Hotlines
Getting Started, Outsourcing, Case
Management, Operational Flow,
Processes, and more
Factors and Features
Introduction
• What – is a helpline/hotline and what do you need to do
to establish one?
• Why – set up a helpline/hotline?
• Who – should answer the line?
• How – does a helpline/hotline work?
• When – can you expect to fully implement a
helpline/hotline?
• Free Advice –vendor selection, positioning, themes,
questions
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What…. A Helpline/Hotline Is and
Some Alternative Reporting
Mechanisms
• Helpline…. a confidential toll-free telephone number for employees
or others to report suspected violations of law or company policy
and to answer policy questions
• Hotline – focuses on the reporting of suspected violations and
emergencies
• Consider departmental needs/requirements (Safety, EEO, Audit,
Environmental, HR)
• Evolution of reporting channels
–
–
–
–
–
From post office boxes
To confidential faxes
To voice mailboxes
To confidential e-mails
To web-based reporting systems
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What …. You Need to Establish a
Helpline
• Senior Management Support and some Money
• Understandable Guidelines for using the Helpline that Reflect your
Organizational Values and Policies
• Multi-function support (Communications, HR, IT, Law, EEO,
Operating, Audit, etc.)
• Designated Support Personnel
• Accountability and follow-up
• Communications and Employee Awareness
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Union Pacific’s Values Line
• Established in 1994 and is outsourced (third-party
service)
• Covers 55,000 employees
• Is a “business conduct” report line
• Does not primarily support Safety, Emergencies,
Environmental, Payroll or HR services (internal lines)
• Supports EEO, Audit, Policy and Employee Relations
reporting
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Why….Set up a Helpline or
Hotline?
• Understand the objectives
• Increased emphasis on organizational ethics and compliance–
carrot and stick incentives
• Establish formal monitoring, auditing and reporting systems
• Provide anonymous channel for reporting suspected violations
(which may otherwise be unreported)
• Raise awareness of commitment to ethical conduct
• Establish a proven, effective tool for protecting company
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Why… Set up a Helpline or Hotline?
Legal and Regulatory Requirements
• Federal Sentencing guidelines – One of seven steps in an effective
ethics and compliance program
• SEC implementing rules
• New York Stock Exchange proposed listing requirements
• Sarbanes-Oxley Act (enacted 2002)
– Sections 301 and 806
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Who …. should answer the line?
Decision Process
• External
–
–
–
–
–
24/7/365
Anonymity
Multilingual
Perceived confidentiality
Vendor Features
• Internal
–
–
–
–
–
–
–
Staffing/budget
Time constraints
Employee trust
Knowledge of Policies
Translation services?
Training/Turnover
Software
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Who?….Analyzing Vendors
• Vendor Selection Process
– Talk with people who have lines
– Visit Vendor Websites
– Review intake process/procedures
– Request proposals, review best practices
– Include your IT department
– Perhaps absorb existing call system(s)
– Consider hidden costs, extra reporting
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How…. Does a report line work?
- Call is placed to the UP Values Line
designated toll-free number (800-998-2000) OR shared toll-free
number
– Helpline personnel records information according to general
protocol or your specific design (EEO, FMLA, etc.)
– Classifications, information, key issues
– Case is reported to you and/or others via e-mail or web links
– Case management data is summarized each month or through
ad hoc reports
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Operational Key Points
•
•
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•
•
•
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•
•
Spread Out the Work
Expect 1-2% of Employees to call/yr
Who Calls the Line?
Types of Calls, Categories
Anonymous versus Identified (20/80)
Sufficient Investigation Resources
No Retaliation for good faith reporting
Confidentiality to extent possible
Follow up is essential
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Types of Values Line Reports
Jan. 1 - Aug. 31, 2006
Theft & Drugs
1%
Pay
4%
Safety
4%
Supervision/Relations
Discrim./Harass.
Job Perf./Fitness
Threats/violence
0%
3%
Other
Policy
1%
Smoking
Union/CMS/Discipline
6%
Union/CMS/Discipline
Smoking
1%
Supervision/Relations
66%
Safety
Pay
Policy
11%
Theft & Drugs
Discrim./Harass.
3%
Threats/violence
Job Perf./Fitness
Other
Butch Ethington Ombudsman
402-544-2113
595
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Questions?
• Cost – $1,500 to $30,000+ per year + your time
• Reports – see handouts
• Vendors – The Network, EthicsPoint, Lighthouse,
– Allegiance, and many more.
– See handouts of hotline best practices
• Helping to maintain a culture of integrity
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Enforcement
Ensuring Observance
Putting into practice
Making it happen
Enforcement
• Reality: Codes and rules without
enforcement and adherence are useless.
• Question: How do we ensure compliance
with legal rules and corporate policies?
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Why should you enforce?
You have Two Choices:
• Corporate Enforcement
• Government Enforcement
• The best enforcement is self-enforcement!
• Better your company do it than the EEO,
SEC, IRS, court, etc.
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Types of Enforcement
The best policy is to prevent wrongdoing
1. Getting Compliance (preventative)
•
•
•
•
Training and Education (‘I didn’t know’)
Review: Audit for compliance and quality
Incentives: compensation and recognition
Model: Leadership talks, and walks the talk
2. Punishment (responsive)
•
•
•
Clear Sanctions in place
Ethics Committee (method in place)
Someone with oversight responsibility
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Implementing Enforcement
• Consistency is Important across Firm
– Cross-check from HR for termination issues
• Codified Policy is helpful
• Yet, Flexibility is important also
• Realize Firing is sometimes correct action
for sake of firm.
• Unions usually have process/expectations
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Correcting Problems
• Sentencing Guidelines also require that you
have a method of remedying ethical problem
areas in your corporate culture
• Examples:
–
–
–
–
Ethics committees
Ombudsman
Ethics Officer
Stated Corporate Policy On Correction Procedure
GOBEC www.omahaethics.org
The Seven Sentencing Guidelines
1. Having Standards
2. Assigned Responsibility - Adequate
Resources
3. Due diligence in Hiring
4. Communications and Training
5. Monitoring, Auditing, Reporting
6. Promotion and Enforcement of Ethical
Conduct
7. Reasonable Steps to Prevent Misconduct
Wrap Up Discussion
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