How can your business direct it's focus to enabling ethical performance?
Acting ethically in the workplace is about more than protecting your bottom line. Ethical performance protects your reputation and makes you an appealing choice for new hires. All too often, however, businesses find themselves splashed across the media for irresponsible and destructive behaviour.
Chartered Global Management Accountant, an organization dedicated to promoting the science of management accounting across the world, has conducted research in the past on the best practices in terms of ethical performance. Their findings help address difficult questions such as what is ethical performance, and how should we go about measuring ethics in particular?
A Code of Conduct and Public Engagement
According to the CGMA study, employers actively seek out candidates who value ethics in the workplace when they’re hiring. 46% of employees want solid ethics in their workplace because having an ethical guideline that is followed is “the right thing to do,” and another 47% want to show that their business is ethical because it helps the business’s brand and reputation. As a result, 89% of businesses have implemented at least a code of conduct, while others have reached out further to help their communities.
Effective Communication
Despite the high rate of companies with codes of conduct, the CGMA’s study states that only 13% manage to effectively communicate this code to their employees, and nearly half never see the code of conduct at all. An ethical key performance indicator will show that all of your employees have seen and understood the code of conduct, adhere to it and that there is two-way communication with management when it comes to upholding it.
Ethical Decision-Making and Accountability
Ethical decision-making can come with many grey areas, which is why it’s best to follow a framework . When it comes to measuring whether you made the most ethical decision, you’ll have followed a series of well-thought-out steps that can help you avoid a lawsuit or the media spotlight.
Reviewing the outcome of your decision can help you reflect on what you would do differently if faced with a similar situation in the future. When it comes to tasks within the workplace, always ensure everyone is aware of their own responsibilities.
Responsible Hiring
When hiring candidates, employers need to be frank about everything pertaining to the job including salary, benefits, growth and training opportunities, and responsibilities. It affects the decision that the employee will be making, and withholding information is an unethical decision that may lead to all kinds of problems in the future. You are responsible not only for your brand but for the well-being of your employees, so don’t make promises you can’t or don’t intend to keep.
Most candidates appreciate transparency when they’re applying for jobs as it indicates employers who will be transparent with them when they work at that company. When hiring, make sure that your decision is merit-based. Nowadays, most employers will do a background check that involves social media. While candidates can be ruled out based on discriminatory attitudes that can worsen the workplace culture, they should never be ruled out because of religion, race, gender, or age.
Nurturing Workplace Culture
One of the best metrics to measure ethics in the workplace is to get feedback on your workplace culture. A good way of doing this is through anonymous employee surveys and questionnaires, where employees can air out concerns about ethical dilemmas and suggest solutions for how to make the company better. Their opinion will feel valued.
Employees want to work at a company where they feel safe and comfortable. Understanding how they feel about their current work situation will provide you with an indicator of your company’s ethical performance.
Compliance Programs
All businesses require compliance programs and many have compliance officers and reporting entities (REs) to make sure that the company is adhering to specific regulations and laws set out by the federal government. With the compliance program, you meet your requirements for reporting, record-keeping, client identification, and other know-your-client information.
The reporting entity must appoint a compliance officer, develop, apply and update written compliance procedures and policies, conduct risk assessments of the business, and document any risks of money laundering and terrorist activity finance offenses. They should also develop and maintain compliance training for employees, institute and document a plan for continued compliance training, and implement a review of the effectiveness of the training.
Anti-Corruption Training
Many companies don’t implement anti-corruption training, which means they’re missing out on a chance to install ethical KPIs. If employees and management executives are all adhering closely to the training, it indicates a company that is performing well ethically. Anti-corruption training is an absolute must, and yet it is often neglected. According to the CGMA report, the World Bank estimated that worldwide bribery has an annual cost of about US $1 trillion.
Not all forms of bribes were covered in this estimate, however; there are both monetary and non-monetary bribes, so this is a conservative number. To avoid an ethical pitfall, include anti-corruption training in your onboarding and have regular refreshers, especially for individuals in high-risk positions like Chief Financial Officers.
External Reporting and Whistleblowing Policies
Workplaces with an emphasis on ethics normally utilize an external reporting system, ensuring employees don’t have to fear retaliation if they do spot ethical misdemeanors in the office. Having such a system in place shows that management cares about the mental well-being of the employees and takes the ethical performance of their business seriously.
This allows businesses to focus on fixing the problem instead of getting tied up in much more tedious “who said what” fights. With a good whistleblowing policy in place, corruption is harder and far less frequent, and there is more compliance in the workplace.
Get in touch with us today to get started on creating an ethical culture for your organization.
