CEO Honesty is the Best Corporate Policy

Posted: Jun 23, 2008 12:01 AM

Imagine landing a new job and in reviewing the company's employee manual you see a sentence that reads: "While XYZ Co. believes in strong ethics, it really doesn't have guidelines or ways to check if our employees are being ethical on the job."

That would certainly wake you up.

It also would be refreshing and more accurate than companies today that contend they are honest and forthright, but don't really know for sure. And, simply having a corporate policy that says you ought to behave ethically in your job really means nothing unless the company is vigorous in supporting that and penalizing those who violate its standards.

A new survey of 4,000 corporate human resource officers and workers finds that only 43 percent said their organizations include ethical conduct as part of an employees' performance appraisal. The survey by the Society for Human Resource Management and the Ethics Resource Center says human resources officers want to be part of the solution to make companies more ethical.

Susan Meisinger, president and CEO of the Society of Human Resource Management, says human resources has a role in writing ethics and compliance programs as well as disciplining ethical breaches. Meisinger thinks - and she might be right - that human resources professionals can benefit companies if they are brought into early conversations about planning ethics programs.

The SHRM/ERC study found that only 23 percent of human resources workers say their companies have a thorough ethics program in place while 7 percent say their companies have none at all. You have to admire that human resources professionals think they are part of the solution here.

They can be, but they can't do it alone. Ethics programs don't succeed because some people in the human resources department think they are a good idea.

They succeed and thrive in companies where the chief executive recognizes the need for ethical behavior, makes it a corporate value and then creates an environment that supports that. That includes disciplinary action when unethical behavior is detected.

Ethical behavior is very difficult to police, which is where human resources officials are going wrong. They need to dig deeper than saying we all have to act fairly and treat others with respect. Human resources simply doesn't have enough clout to pull this off. It needs to have all of the company's top executives buy into the need for ethics and then act that way themselves.

You don't dictate ethics. Each worker decides on their own how ethically they will treat co-workers or customers. If they don't recognize a need to do that, they simply won't.

It doesn't matter that human resources has a rule against it. Look around you own workplace, human resources probably has a lot of rules that are broken every day by workers and nothing is done about it.

It sounds trite to say that good behavior by the chief executive is a springboard to creating an ethical business. But almost all companies with strong ethics have that chief executive as a role model. People respect it when a CEO walks the talk. Unfortunately, it happens too rarely in our corporate world.

So, let's applaud human resources for trying to do something in the best interests of the company as well as society. But let's also realize that human resources's involvement is only one part of success plan.