With some easy to understand examples!
Let’s take the headache out of this confusion!
Many times, “Code of Ethics” and “Code of Conduct” are used interchangeably.
But hold up. There are slight differences. Each has their slight nuance… doesn’t everything?
A Code of Ethics lays out a company’s and its leadership’s decision-making.
A Code of Conduct lays out the do’s and don’ts of employee’s actions.
Both represent two common ways that companies self-regulate.
Each are typically associated with large companies, and provide direction to the company, and its employees, to help establish a public image of good behaviour.
But really, a ‘Code’ can benefit any sized company. After all, wouldn’t any company want to establish a great public image with good behaviour?
In layman’s – example:
Code of Ethics – the organization is committed to protecting the environment and being a ‘green’ company, so employees should make the most ‘green’ decisions possible when faced with problems.
Code of Conduct – don’t leave the kitchen tap running hot water while you wait for your Lean Cuisine to cook in the microwave.
Sort of like that.
A Code of Ethics is sometimes referred to as a value or principal statement. It’s typically shorter in length than a Code of Conduct, and is a little more generic in content.
It’s meant to give direction to a board of directors and provides general principles to help guide behaviour.
A Code of Ethics may simply state, ‘any director shall not engage in criminal activities’.
This publicly disclosed document works on the basis of “treat others as you would like to be treated.” When faced with ethical dilemmas or debatable situations, what’s articulated in the Code of Ethics can help guide decision making.
The Code of Conduct adds all the flavour to a Code of Ethics. If in the Code of Ethics, directors must eat potatoes for dinner, then the Code of Conduct states those potatoes must be roasted with salt and pepper.
This document is generally longer in length than a Code of Ethics and gives specific examples of acceptable behaviour. It’s also geared towards employees (although board members and senior management aren’t immune to its specifics). In other words, everyone must have salt and pepper with their roasted potatoes!
If, as above, the Code of Ethics states that any director shall not engage in criminal activities, the Code of Conduct will lay out exactly what a criminal activity is.
For example, no employee (or director) shall be in the possession of illegal drugs, or influenced by alcohol.
Another example would be, a Code of Ethics may state that directors may not bring harm to employees, vendors, clients, etc.
The Code of Conduct would more specifically state that no employee may discriminate against someone due to their religion, marital status, gender, race, etc.
The Code of Conduct outlines specific behaviours that are required or prohibited as a condition of ongoing employment.
Codes, along with other measures, have helped some companies dig themselves out of very deep holes, and have helped many companies build a healthier work climate and reputation.
There are similarities between a Code of Ethics and a Code of Conduct. They are both used in an attempt to encourage specific forms of behaviour by employees and the board. The guidelines behind ‘ethics’ are there to provide guidance about values and choices that influence decision making. Regulations behind ‘conduct’ state that some specific actions are appropriate, others not so appropriate. In both cases, the organization’s goal is to lay out an acceptable range of behaviors from all employees.
But the differences are in the details. Both are used in an attempt to regulate behavior in very different ways. Ethical standards are generally wide-ranging and non-specific. They are designed to provide a set of values or decision-making approaches that enable the board to make independent judgments about the most appropriate course of action. Conduct standards generally require little judgment; here’s what you can or can not do. You obey or incur a penalty, and the code provides a fairly clear set of expectations about which actions are required, acceptable or prohibited.
Many smaller businesses can survive without a formal code of ethics or code of conduct. If a business has 1-10 employees, generally everyone is talking with each other and interacting with each other every day. So communicating appropriate behaviour is much easier. However, as smaller businesses grow their employee numbers, ethical hazards and risks can increase, so having these documents, a Code of Conduct to start, can help shape cultural expectations about behaviour. And they also serve as a solid marketing tool for potential business partners or clients.
Either way, whatever type of Code an organization chooses to employ, it’s critical that it is treated consistently in every instance of wrongdoing. The Code needs to apply to every employee from the ground up, and no matter how small the violation, appropriate discipline needs to take place. For example, if your Code stipulates that theft of company property is prohibited, and an employee takes home a pack of post-it-notes from the supply inventory, well, technically that’s theft, and should be treated as such.
Although in this case a stern talking to might suffice.
Check out our newest eBook: why a whistleblower hotline on its own may not be enough.
To organizations that want to promote a speak-up culture but don’t know how
Most of us agree that implementing a whistleblower hotline is a good thing. You can’t argue with facts like putting fraud off to another day only increases its damage.
Or how about those organizations with reporting hotlines, where employees can report on fraud earlier, that suffer way less damage compared with those organizations without reporting hotlines.
Let’s put to rest some fears and answer some questions many have about whistleblower hotlines. If you’re a business looking to implement a new hotline and reporting program, here are few suggestions.
It has to be secure
An organization that incorporates a whistleblowing service into their operations wouldn’t want confidential internal matters to be made public due to improper handling of data. The security of the program chosen is worth the due-diligence. It needs to guarantee the integrity of the reported case and the protection of sensitive data – preventing the possibility of fraudulent additions or omissions of details.
A whistleblower wanting to speak out against unethical behaviour within their organization would be concerned about their anonymity, and the repercussions that they feel may occur if their identity is known. Therefore, a guarantee to keep the whistleblower anonymous would provide benefit to the individual who wishes to file a report confidentially. It would also likely benefit the organization as it is able to take more corrective actions if more reports are filed, making the company more ethical and compliant.
Organizations with a reputation of having poor ethics would likely be willing to improve their perception in the public’s eye. Therefore, reputation-enhancement is another value that is fundamental in ethics reporting programs. A subscribing organization can use the service as a form of promotion, improving their ethical image in the eyes of others, and potentially leading to a brighter future.
Company stakeholders that may have their time eaten up managing an internal whistleblowing program by juggling in-person complaints that compete with their other job duties, will improve the complaint investigation processes, and save time, with a more efficient third-party system. The response time of a powerful web-based portal allows management to come to quick, yet thorough solutions to ethical issues within an organization. A fast response enables an organization to solve problems in a reasonable time frame, making any necessary changes before the reported incident dramatically affects the company.
Ease of use
An easy-to-use whistleblowing program enables a larger number of individuals to voice their concerns when they might not have been able to before. The software used should be intuitive, yet powerful, because the degree of accessibility of the system is believed to increase the willingness of whistleblowers to come forward, allowing an organization to become more ethical.
Large organizations with complex internal structures and needs, would likely not be very interested in hotline services that are rigid in their implementation. A third-party able to tailor-fit a program benefits clients that have varied organizational needs. In order to effectively promote the usability of the service to all of their employees – no matter how different their roles are – the subscribing organization will need the program they use to be tailored to each department’s specific features and needs.
Doesn’t everything boil down to price? Many companies keeping close attention to financial spreadsheets would be likely to implement their own whistleblowing program, rather than a third-party service that charges a premium price with hidden fees. But hold on. Not all third-party providers charge an arm and a leg and have fees that suddenly pop up when the client asks for something. Finding a provider that is all-inclusive is a huge bonus. The service and all of its features, such as customizability, software training, and implementation should be all included in an annual subscription price, with no hidden or extra fees for additional services.
If you don’t quite know what type of program you want, you’re not alone. The important things is the provider you choose should be able to deliver a simple system that can be customized and scaled to best serve you and your business needs.
#EnvelopeGate… yes it has its own hashtag
Of course something so utterly shocking is going to get its own hashtag.
By all accounts in the media coverage so far, on the Oscar flub that is sure to go down in history, one simple employee mistake that would go against anybody’s better judgement (certainly under these circumstances) is allegedly to blame for why the Internet blew up, and is still aflame over the ‘best picture’ Oscar award blunder… and will be talked about for some time!
If anything, the gaping jaws strung along the first few rows of the stage, belonging to Meryl Streep, Matt Damon, Salma Hayek, and Dwayne Johnson (my personal favourite expression), say it all.
A Super Duper OOPS!
What you can count on is this is the biggest screw up in Oscar history! And you can chalk it up to a star-struck employee.
The theory is this PwC employee got side tracked by being in close proximity to Emma Stone, and decided to snap a pic.
Here’s how it works for the Oscars. PwC uses two complete sets of the winning envelopes, with one placed on each side of the stage. A PwC partner was handling one side of the stage, and another partner was handling the other. One partner, awed over Emma Stone’s recent Oscar win, handed actor Warren Beatty the wrong envelope announcing what he thought was the winner of best picture. The envelope in question was actually Best Actress in a Leading Role… the very recent Emma Stone win (remember, two sets of envelopes, one at either side of the stage).
This alone, many feel, is a mix-up waiting to happen… wait, it did!
Theoretically, this very envelope should have been sent to the back of the pile, to make room for the next winning envelope next on the agenda.
The story is that this partner in question posted on Twitter a photograph of Ms. Stone backstage shortly after she won the award for best actress, and this, minutes before the mix-up happened. The employee got sidetracked and lost focus.
So like any organization, it comes down to an honestly simple mistake an employee allegedly made, but one that will have such a huge and lasting impression on the company PwC, and The Academy.
There’s got to be a lesson to be learned in here somewhere. Every situation provides learning opportunities.
It may ultimately end up boiling down to human error. Something that can happen in any company, in any industry. No company is immune, whether a mistake is made intentionally or not.
The reputational damage can be very severe.
Brands go to extraordinary lengths to protect their image and reputation. History is littered by examples of reputation failures, like Lance Armstrong, and business giant BP following the Deepwater Horizon oil spill.
Most companies have employees scattered in all directions, with varying degrees of responsibilities. It can be hard to get a handle on absolutely everything each employee does from day to day in their roles.
This is why it is so important for companies to set in motion a strong Code of Ethics. The rules and protocol that should govern how each employee, from the top down, conducts their daily business.
It’s also equally important that the company ensures that each employee, from new recruits, to those who have been employed a while, know and understand the importance of the Code of Ethics, and how it is used to ensure that every employee get the most from their jobs, and the jobs get the most from the employees.
It might also be a lesson learned for the Oscar Award process to not have duplicate winning envelopes – which many agree played a factor in the mix-up. There’s always room for process improvement after all, ways to help employees improve, not make mistakes.
This is not to say that PwC hasn’t done its due diligence on training employees on the Code, and other processes.
Mistakes are bound to happen. This one just happens to have been viewed by millions. And now millions are judging PwC, including existing clients.
PwC will be busy for a little while patching up a reputation and trying to move on from an event that will more than likely leave a permanent scar.
So perhaps the lesson in this unfortunate event is for every company to ensure their Code of Ethics and other policies are up to date, and that their employees are aware of these, and have acknowledged them.
Employees should know what the company deems unacceptable or unethical behaviour, and use this knowledge in how they conduct their daily activities.
The downside for this partner employee, he’s got to live with the judgments coming at him right and left for a long time. On the bright side, he’s got a totally amazing story to share for many years.
Denoting an outstanding or supreme example of a particular kind of person or thing.
If by outstanding example you mean brushing off numerous [alleged] reports of harassment, discrimination, a toxic culture, and massive favouritism, then yeah, definition covered.
That’s how it’s coming across to an outsider anyway, when a former employee’s only audience isn’t Uber HR and management itself, but the public and media.
Uber, the ride-share company, is in the news again. This time they’re scrambling to investigate shocking allegations of sexual harassment reported by a former employee.
Former Uber engineer Susan Fowler, laid it all out on her blog. In it she spews forth a plethora of alleged incidents. From receiving sexual company chats from her manager on her first day at work, to numerous meetings with HR bringing these incidents to their attention, only to be told the incidents don’t matter, stop complaining and get back to work.
“When I reported the situation, I was told by both HR and upper management that even though this was clearly sexual harassment and he was propositioning me, it was this man’s first offense, and that they wouldn’t feel comfortable giving him anything other than a warning and a stern talking-to. Upper management told me that he “was a high performer” (i.e. had stellar performance reviews from his superiors) and they wouldn’t feel comfortable punishing him for what was probably just an innocent mistake on his part.”
Ms. Fowler’s post goes on to claim numerous times she, and others, came forward with reports of harassment and discrimination to HR and management, only to be told this was the first anyone had ever heard such claims before.
And now, Uber’s co-founder and CEO Travis Kalanick, is scrambling to figure everything out.
This is the point in this post where we veer away from the alleged activity Susan Fowler, and other female employees experienced at the hands of management. Although important as it is to shed light on it, that’s the very point.
How is management’s unbiased investigating going to be anything but less stressful than it already possibly is, without victim proof that hasn’t been tampered with, or HR’s proof that the situation was blown way out of proportion.
Much of what Ms. Fowler documents in her blog can be easily massaged, edited, or deleted altogether, lessening the behaviour of management ignoring reports, and heightening the perception that Ms. Fowler was just whinging about her job.
This is where WhistleBlower Security is supposed to come in promoting the importance of ethics reporting hotlines, case management systems, and whistleblower policies. But the proof is in the pudding here.
Ms. Fowler had no other place to file a report, other than spilling the beans on her blog, for all the world to see, and people to judge Uber by.
So now, not only is Uber trying to piece this complex puzzle together, they also have to play the reputation damage control card too. And this isn’t the first time reports of harassment have been cited.
This is the irritatingly frustrating part an outsider sees in the internal running of a company. Why is there no place for employees to file anonymous reports, and why isn’t management taking these reports more seriously?
It’s as simple as ‘I’m thirsty, so I’m going to drink water now’.
We have a company, we need to implement a reporting hotline now.
Employees have potentially more power in the daily activities of an organization than anybody truly really thinks about. Employees outnumber management. Employees know about things that are happening that management may not. They need a place to bring concerns to anonymously and safely.
You can’t get any more tone from the top than Uber’s CEO and co-founder taking action to figure out what happened in this instance. Unfortunately, he can’t be in every place at once. That’s why it’s to important that tone from the top filter down to senior management, and lower management.
And employees need to know and understand that management have their backs when it comes to bringing forward ethical complaints and violations.
If ever Uber is in the market for a trusted third-party ethics reporting hotline and case management system, WhistleBlower Security will gladly provide a super awesome program where employees can anonymously report to, and management can use to seriously investigate complaints. Perhaps with one, public scrutiny will be eased. That’s a huge win.
Ernst & Young’s Global Fraud Study finds that there remain obstacles in using internal reporting channels. One obvious deterrent is the fear for personal safety.
Other respondents to the E&Y study highlighted their loyalty to their company as a main reason for not coming forward to report fraud, abuse, or other instances of questionable behaviour.
Management and boards need to recognize how misplaced loyalty plays a role in helping employees hide unethical behaviour and prevents them from coming forward to report concerns.
When an organization has upper management’s complete support of a whistleblower system that encourages employees to come forward and anonymously report instances of wrongdoing, it won’t have too much of a hard time keeping employees motivated and productive.
There is a risk in maintaining a culture of silence:
An anonymous hotline where employees can come forward to report any wrongdoing can give an organization early disclosure on issues and concerns that can be investigated and remedied before the media gets wind of it, thereby protecting the organization’s reputation.
If employees know that there’s a place where they are encouraged to report any perceived wrongdoing without fear of retaliation, it can boost employee morale. And if those employees know that any perceived wrongdoing, whether proven or unproven, will be investigated, this proves the organization’s commitment to an open culture. Boosted employee morale equals happier and harder working employees.
External vs. Internal
Employees might be less likely to use an internally created whistleblower hotline because they are unsure if it’s safe, and they fear retaliation. A hotline provided by an external provider offers a completely neutral atmosphere for reporting incidents. It’s safe, unbiased, and provides complete reporting for analysis.
Externally provided whistleblower programs cost much less that one created in-house. An internally created system requires constant training, maintenance, fixing and editing, costing the organization time and money and taking those in charge of it away from other tasks. A third-party provider does all the hard work, has sourced the telephony, and can take the heavy lifting away from the company, thereby decreasing cost, maintenance, and time.
Do you want to keep your employees happy?
A recent article published on Inc.com raised six Human Resources mistakes that cause a company’s best employees to take the nearest EXIT, and keep on going without looking back.
Among these bad HR practices were making employees feel uncomfortable in the workplace, choosing when and to whom rules apply, disregarding personal needs, removing room for growth, and not giving any feedback at all.
Certainly these are practices that act like a giant brick wall that employees have no way of scaling. So they are going to turn around and head in the opposite direction. Possibly right to your competitor.
And these are your best employees.
We spend a lot of time at work. The environment we are working in and the relationships we form with co-workers, including management, are very important.
At work, if an employee isn’t getting the same treatment as their co-workers, or are made to feel uncomfortable in their work environment, they are going to move onto the next company.
“Happy and balanced employees are the most high-performing and productive, and there is no relationship so important as the one that exists between employers and employees.”
So one mistake to really take note of, that HR departments and companies without HR departments make is not providing channels for employees to voice complaints and grievances.
There are a number of benefits to having an internal complaint system, or one provided by a third-party.
They encourage a speak-up culture. If there is wrongdoing happening inside your organization, there’s at least one person who knows it’s happening. If that employee feels like they can’t come forward because they feel the culture prevents it, then perhaps the next employee in line will also feel unable to report on the next issue that comes up.
Companies should want to know about misconduct sooner. Knowing about misconduct sooner enables organizations to put a stop to it earlier. If every time an employee leaves a company because they feel the culture prevents them from performing at their best, perhaps the next employee will feel the same way and also leave, and so on. You’ll run out of humans eventually…
Plus the toxic event that started the misconduct will continue if left unchecked.
Allowing employees to voice complaints helps management understand a possibly deeper issue. It’s one thing to know that a certain type of wrongdoing is taking place. But why is it happening in the first place. If it wasn’t reported, how long before things really have the potential to blow out of control?
Giving employees the ability to voice complaints is the best method of generating the most comprehensive communication about issues that can potentially prevent employees, and the company, from meeting performance goals. If a company is losing it’s best employees, it then has to focus constantly on replacing that employee, instead of attacking the company goals.
If an employee does end up leaving a company and moving onto the next because of one of these HR mistakes, that might be the least concerning issue the company has to deal with. What if that employee left because of a more serious violation they couldn’t speak up about. The company could potentially be facing legal issues should the employee choose to take their concerns outside the company. Employees may inform HR or management about an issue, but nothing gets done, or the concern isn’t taken seriously.
As the article suggests, these are Human Resources mistakes. However, if the company culture, and tone at the top turns a blind eye to these mistakes, then ultimately a company will lose out because their best employees have left.