The role of ethics in management is dependent on the level of responsibility a company or public enterprise is willing to take. There are two approaches to be considered - the pro-active and the reactive.

The pro-active approach is characteristic of a company that believes strongly in its mission as being moral and of benefit to society. Good corporate governance is visible and apparent.

The company or enterprise is aware of its role and is continually making strides to deal with ethical issues and behaviour. Ethics is a process and is continually managed on a cost-effective basis. The company policy on honesty and ethics is alive in the organisation.

The re-active approach on the other hand is indicative of the company that reacts to the immediate situation rather than anticipating it. This re-active and passive approach leads to deviant behaviour by failing to face up to responsibility. The approach is one of dealing with unethical behaviour, dishonesty, theft and fraud erratically and as it occurs.

The result is a lack of planning, a lack of management guidelines and an extremely costly experience. The cost involved is directly attributable to treating the result of the problem and not the cause of the problem, unethical behaviour, dishonesty, fraud and theft.

The companies described above represent the two extremes found in the corporate world. The profit orientated on one hand and the socially responsible and human safety orientated on the other. Which of the two follow good corporate governance principles as outlined in the King 2 and 3 reports?

Unethical behaviour is costly

Consider the costs involved directly attributed to unethical behaviour

The cost of unethical behaviour in one form or another can have devastating consequences if the problem is not dealt with pro-actively. Ethics must be managed pro-actively on an ongoing basis rather than re-actively.

Treat the problem, the unethical behaviour and not the result. The process can start by training all on ethics and the management of ethics. Consider the consequences and the cost of delay?

In recent discussions with some clients the question was asked “How do we bring our Ethics and Fraud policy to life? How do we implement it and give it life”?

Is this the case in your company? Have you implemented a policy and just circulated it to the staff and management or have you spent time in launching it, giving it meaning, substance and life?

In many instances managers have been presented with a Fraud, Ethics or Honesty policy and no guidelines as to how to implement it. The policy ends up in the “to do” items on the desk.

The result is that employees do not know about it, they have no specific details about the policy content and therefore cannot be expected to take it seriously. Management is lost as to how to implement and manage it.

Ethics, Fraud and Honesty are topics best not spoken about. Managers shy away and hope the problem will disappear or that someone else will have to deal with it.

Fraud, Theft and Dishonesty continue to plague our society, our place of work, our local councils, our police force, and our government departments. Dishonesty is rife and little is being done about it.

Most companies admit that there is a problem with dishonesty. The problems range from minor instances to some major loses that run into millions. Companies, Local Councils, Government, the S/A Police will all admit to having Fraud and Honesty policies.

Most will admit to having a “zero tolerance on fraud and dishonesty” but most will also admit to the fact that nothing has been done to bring the policy to life, to giving it meaning and substance.

So what can be done?

* Educate all employees and discuss the contents of the Fraud Policy

* Define exactly what dishonest behaviour is and develop a clear ethical vision.

* Cultivate a climate of honesty in the workplace by encouraging employee “buy-in”

* Discuss the consequences of dishonest behaviour and at the same time highlight the benefits of being honest

Most people want to be honest, most people want to be ethical but many do not realise that their actions are in fact dishonest. Theft, misuse of telephones, abuse of sick leave and other forms of dishonesty are all ways of getting back at the employer, of evening the balance and of eradicating the perceived injustices of the past.

These perceptions need to be addressed and discussed in order to achieve any degree of success. Employees will only take ownership of what they understand and believe. Change will only happen when there is “buy-in”.

Des Squire (Managing Member)
AMSI and ASSOCIATES cc
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