Business ethics is a buzz term that has been batted
around more than once in various risk management trade publications, but
what is it exactly? Stated simply, it can be defined as knowing what is
right or wrong in the workplace, making the distinction, and then doing
the right thing. It is the establishment of fundamental ground rules or
principals for our work lives with some guiding parameters that allow
flexibility to address a wide array of business situations. Through
implementation, business ethics will instill in your employee workforce a
sense of doing business responsibly.
So how do you do this exactly? The first step is to
develop and establish a formal code of ethics or a code of conduct – it
is broad in scope and generally agreed to up front. Policies and
procedures are set up and designed to provide guidance in a wide array
of situations. These procedures are devised to resolve ethical dilemmas,
but they don’t always cover every circumstance.
If there is still a remaining doubt as to a best
course, it is often a good idea to get a collective wisdom opinion, i.e.
discuss it with others. Sometimes one person may be too close to the
problem to be able to clearly know the best course of action. An open
and frank discussion with others in your risk management department may
help.
So specifically, what and where are the problems? They
generally arise from two major areas. First are the lapses in ethical
behavior caused by greed, such as kickbacks/bonuses received from an
agent or insurance carrier in exchange for being given an account.
Secondly are lapses due to honest ignorance – these are tougher to
recognize but will appear most often as questions of a conflict of
interest. Generic examples might include accepting large gifts or favors
from vendors your county deals with. In reality, the course of action
is made much easier once a code of ethics is established – so that if
there is any degree of a conflict of interest, then that person should
recuse themselves and not be the individual making the decision in
question.
You might ask, why bother with having a code of ethics
in the risk management department for local government? Full disclosure
and integrity are vital components for establishing and keeping the
public’s trust, which forms the basis for all successful business
relationships.
So what are the benefits of an ethics program and
having a formal code of ethics? They directly affect and promote the
highest standard of business practice. Through their use it develops an
awareness and sensitivity as well as integrates ethical guidelines into
the decision-making process with established mechanisms for resolving
ethical dilemmas.
Drilling down, specific risk management examples of
issues that should be addressed in the risk management code of ethics
might include the following.
• Endeavor to provide balanced and accurate reporting
of all conditions including those that might reflect adversely on your
own risk management department
• Do not present information in such a way as to
influence a certain outcome or decision, and if possible present
alternative options based on solid facts and reasoning.
• Avoid conflicts of interest or even the appearance of a conflict of interest
• Follow your own code of ethics as it pertains to entertainment and gifts from third-party service providers
• Avoid at all costs the intent and appearance of
unethical or compromising practice in all relationships, actions and
communications.
• Do not do business with any organizations in which the risk manager or any family member has any financial interest.
An ethics roadmap provides a strong positive public
image for those who work in the public sector – regardless of whether or
not you are an elected official. Honesty builds trust, which translates
into successful relationships in both business and at the personal
level. Many of your decisions are already made in advance, by simply
having the code in place before specifics necessitate their use.