Most of you will work for firms that already have a code of ethics. That’s great, but most firms with an existing code will not have reviewed them for at least a few years, probably several. In the next three posts, I want to look at what you should be thinking about when undertaking such a review. And this look is going to take for granted that you may well tweak line X or phrase Y of your code from time to time, and concentrate instead on the more fundamental questions that can help your firm turn its code of ethics from a piece of paper often left in a desk drawer, into something that will prove more meaningful and valuable to your firm.
A good review would start with the question that employees sometimes ask about a code of ethics: what do we need a code for? It’s a question that may be presented as a challenge, but it’s also vital that the firm, in weighing up whether their code is achieving all that it might do, makes sure it knows its answer to that question from the outset. That answer will influence how seriously your code is taken within the firm, what the code will need to cover and what tone it should adopt. Here are four reasons I often hear cited about what a firm’s code of ethics is there to achieve:
- to make the values more explicit (in other words, the firm ‘giving voice to its values’);
- to give confidence to your key audiences that you know what ‘doing the right thing’ means in practice;
- to provide guidance to your own people on the expectations the firm has for how they should carry out their work;
- to make clear to your people that they should take those expectations seriously, with references to what will happen should they ignore them.
These four examples are a mix of aspirational and practical, and that’s a mix worth keeping with. Codes that are nothing but aspiration seem insufficiently grounded in the day to day reality that employees experience. And if they come across as only about employees not doing this, or not doing that, then they lose touch with the whole idea of values.
Who in the end though decides what the code of ethics should be there for? It is the firm of course, for the code is owned by them and its commitments will be used to hold their executives to account. And it is the chief of those executives who should put pen to paper and write the first paragraph of the code of ethics. The message she should be communicating is her ethical vision for the firm: in other words, the ethical dimension to what she wants the firm to achieve.
It’s important that the chief executive makes this effort and doesn’t delegate it. It is she that must give clear ethical leadership, and be seen to give it. And if something puts your firm in the news, then it’s the chief executive who has to be able to explain that ethical vision on the morning radio. Getting her to talk about it first in your ethics policy is a small but significant start.
And that ethical vision needs to address head-on the question of ‘what do we need a code of ethics for’. Vague or inconsequential ethical visions invite employees to follow their chef executive’s example and not bother either. So, what sort of message does the ethical vision in your firm’s code of ethics send out?