It seems the public’s faith in many U.S. businesses, banks and financial markets has been eroded because of reported management failings, continued bankruptcies and repeated financial crises. Sadly, trust in corporate management, boards of directors and political leaders seems to be at a low point.
What led us to such a low point in our moral beliefs and our moral conduct? Perhaps a systemic change in our business culture, the pressure of progress, demand for quarterly profits, amplified demand for growth, a series of bad decisions that over time moved business culture in the wrong direction, maybe self-promotion and greed.
The business community cannot attain its potential economic value without a never-ending obligation to the highest level of ethics and social responsibility. This commitment is not an option and must be driven by executive management, the source of power in all corporations. Ethics must be reestablished as the cornerstone of the firms’ operating standard, and the only place to start this process is the very top.
Over the years there has been a resurgence of interest and attention given to Ethics. Occasionally becoming a subject of national debate, at times being considered as an on or off concept, Ethics is a complex, multi-layered concept that demands thoughtful deliberation and a continuing uncompromising commitment.
Ethics has slowly evolved into modern-day standards of social mores and legislated into laws. Stated business principles have also advanced into codes of conduct and professional standards by different business and political associations. All too often, these are ignored by business executives for the reasons mentioned above.
The objective of establishing an Ethics policy is to set guidelines for all employees to follow. It is the responsibility of all to be familiar with and to abide by both the letter and spirit of the policies. Of course, it is not possible for a single set of standards to cover all and every situation.
Executive management should not only be marching in the “Ethics” assembly, they should be leading the parade! To be held in elevated regard and considered a professional who makes a valuable contribution to their industry, executive management must establish and maintain a high level of trust.
Whether a small local business or a corporate giant, management is strongly encouraged to adopt a written Code of Ethics. It should be displayed in conspicuous locations, in every location and every administrative office, and provided to all new hires. The Code of Ethics should be on display and readily seen by all officers, staff and clients.
The following four management ethos will establish the underpinnings of a strong ethics culture. This list is not meant to be all-inclusive, but it is hoped it will outline the groundwork of instituting a strong ethics policy.
Loyalty: Satisfied loyal customers will return to the same business every time they wish to make another purchase. Why? Because of the extraordinary service provided. Word of this positive experience will spread throughout the community and will become a consistent source of repeat business. Customer loyalty is developed by consistently delivering a remarkable experience to the customer. In other words, demonstrating loyalty to the client.
Transparency: The firm’s executive management must be committed to creating an unprecedented level of openness and transparency in all their business dealings. Openness will strengthen the firm’s position and promote perceived usefulness and competence. Transparency requires accountability and provides important information for clients’ consideration,
Privacy: Management must clearly understand that the client expects and deserves privacy and security for their business, personal and financial information; consequently, management is expected to take all steps necessary to protect sensitive information that has been entrusted to the firm by the client. To that end, the firm must adopt standards and procedures intended to prevent misuse of customer information.
Conflict of Interest: Arguably “Conflict of Interest” is a true ethical dilemma, perhaps the single biggest challenge associated with ethics. Conflicts of interest are not, by themselves, wrong or even unusual. It becomes an issue only when management decides on their interest over the client’s interest — and then it may become a big issue with far-reaching ramifications.
It must be remembered, the suggestions outlined in this article are management’s responsibilities and duties to the company, the employees customers — ethically, morally and legally!
Garry Barnes is a director at PW Partners Consultancy, headquartered in Salt Lake City; managing director FBO Sales, Scottsdale; and freelance writer. He is former president and CEO of banks in Arizona, California and Utah. He has taught at the university level and is a frequent writer and lecturer on banking, finance and real estate matters.
Barnes has served on the U.S. Small Business Administration National Advisory Council and received the SBA Arizona Financial Services Advocate of the Year award.
