In the final analysis, it is the people of a company who determine whether the firm conducts its business in an ethically responsible way – from the very top and on down throughout the ranks. There have been many awful examples of CEO’s who have ruined their firms and the lives of many thousands by their unethical actions. And there have been plenty of instances where an unprincipled employee deep within the organization has engaged in rogue behavior that has cost millions while severely harming a company’s reputation for ethical business and good leadership.
Sure people are people, and there are all types, and it is impossible to control everyone’s behavior all the time, and problems do happen. Yet the companies that organize and structure their human resource functions to support their commitment to ethical business practice have a better chance of avoiding serious problems.
The video clips and transcripts for this section illustrate the awareness of the “people” issue by top executives, and we can also see how companies have established creative personnel practices to filter out “bad” actors. Some companies go to great lengths to hire the right people who are a good fit with the firm’s values and ethical culture and then to inculcate in them the company’s core ethical values. Continuous training provides reinforcement, as do reminder “contracts” in which employees acknowledge in writing their understanding of and adherence to ethical codes. Employees are given guidance not only about what to do in certain ethical situations, but they are also directed to persons who can help them in confidence to sort through ethical dilemmas. KPMG systematically incorporates ethical behavior into the promotion process, and we hear from companies who have made it a policy to stand by employees who choose to do the right thing even if it means losing business.
You’ll find many good and creative ideas that may stimulate your thinking about how to address these people problems and ethical business behavior.