By linking rules and regulations to principles and purpose, organizations can gain the trust of their employees and the public and establish a reputation for integrity.
To work in an ethical culture is to show up each day knowing that from the very top of the organization on down, there is a shared understanding of what doing the right thing means.
But it’s not about just memorizing rules or having a clear set of standards. It’s not even about having a code of conduct. All of those are very important, but alone, they represent a culture of compliance.
In a compliance culture, people know the rules of the road and the consequences of breaking them. But compliance cultures generally are focused on regulations and restrictions and legal definitions of right and wrong.
The best ethical cultures do more than enforce awareness of and obedience to rules. They view rules and codes as starting points but aim higher. They connect ethical conduct to their guiding principles and purpose as an organization.
Employees in that scenario don’t just protect the organization from harm; they look at how they can act in ways that do the most good for those whom they serve — because it represents who they are.
Going beyond compliance to establish a culture of integrity
One of my favorite writers on business ethics, Harvard’s Lynn S. Paine, differentiates between cultures of compliance and cultures of integrity, and has written about why integrity is far more meaningful:
From the perspective of integrity, the task of ethics management is to define and give life to an organization’s guiding values, to create an environment that supports ethically sound behavior, and to instill a sense of shared accountability among employees. The need to obey the law is viewed as a positive aspect of organizational life, rather than an unwelcome constraint imposed by external authorities.
In the integrity approach, mission, purpose and values are drivers of the organization’s ethical compass. And believe me, we need a navigational tool, because ethics isn’t just knowing right from wrong. Many ethical decisions aren’t as clear-cut as “Don’t lie, cheat or steal.”
Ethical decision-making is a process that involves weighing and balancing multiple “rights” and “wrongs,” which often arise in the very same situation. There are many scenarios in which making the right choice isn’t clear-cut. For example:
- Acting swiftly versus acting deliberately
- Promoting transparency versus protecting personal privacy
- Protecting the bottom line versus donating to the community
- Thinking about short-term success versus focusing on long-term sustainability
The role of leaders in instilling an ethical culture
Whether issues involve personnel, policy or the response to scandal, tragedy or breaking news, leaders should model the values of the organization in their actions. This again shows why a culture of compliance-based ethics is necessary but not sufficient.
The best leaders respect the laws that govern their industry, but they know that laws don’t require empathy. Or apologies. Or changing things that are perfectly legal but perfectly wrong, like workloads that burn people out or supervisors who are relentlessly negative or disorganized.
Employees may bristle when they’re told about codes, rules and regulations and then asked to sign statements documenting that they’ve been briefed. They may feel that the real goal isn’t a values-driven organization, just one that protects the company from harm and allows the organization to blame the staff, not the leadership, if things go wrong.
When people at the top of the organization embed values and purpose in their everyday conversations and decisions, the codes and rules become part of a bigger infrastructure of integrity, rather than just tools of compliance.
Reaping the gains of an ethical culture
Creating and sustaining a strong ethical culture may seem daunting, especially if you feel you lack sufficient education in ethical decision-making, but you can do it. If you need help, there’s a great free resource from the Markkula Center for Applied Ethics at Santa Clara University (full disclosure: I serve on one of the center’s volunteer advisory boards).
A healthy culture of ethics and integrity pays benefits. Those you serve have greater confidence in your trustworthiness. Your staff members aren’t just proud of their standards but also can articulate and act on them.
To this day, I remember what one of my staff members told me when we debriefed a challenging situation he’d handled perfectly. He had been faced with a tough ethical decision in the field that had to be made in a split second. There were no managers nearby to consult. “I just thought about our values,” he said. “Then I knew just what to do.”
3 examples of how to use ethics to guide difficult organizational decisions
Here are two real-life instances and one conceptual example that show how an ethical culture can help organizations deal with challenging situations.
1. The pandemic caused many businesses to pivot to remote or hybrid work environments. They couldn’t apply rules that were made for a pre-COVID-19 world. They had to consider the safety of both their employees and those whom they served.
CDC guidance was helpful but not all-encompassing. For instance, employers had to rely on their core values to decide how to support employees who were struggling with home pressures — or illness or grief — while still keeping the business running smoothly and as profitably as possible.
2. When assessing a complaint made about one employee by another, organizations have to look at more than just rules and laws. What constitutes a fair process for adjudicating the situation? Who should be involved? What is proportional punishment for a violation? How does the company balance transparency about decision-making with the desire for privacy on the part of those most affected by the situation (especially a victim)?
3. When organizations have policies that come under public scrutiny, how do they respond? It happened to FedEx in April, when its no-cell-phones-while-on-duty rule was questioned after the mass killing at its Indianapolis plant. In such a situation, does the organization weigh the competing values as it determines whether to change or continue the policy?
FedEx is reportedly keeping the policy and has explained what it believes to be the important safety values involved. Other safety- and productivity-minded companies have considered the issue and shared their decisions. This openness addresses ethicist Sissela Bok’s “test of publicity”: Could your decision withstand the scrutiny if it were made public for everyone, especially those affected by it, to see?