It may come as no surprise that ethics are an important component of business. However, in today’s troubled world, corporations seem to have lost this “common knowledge,” and have instead swapped it with an obsessive drive for profits – at any cost.  To understand how imperative ethical behavior is, you have to consider the impact that this has on “trust”, because that’s what it all comes down to.  An employee or consumer will not want to invest their time or money in a company they don’t trust, and if there is no investment, there is no company.  Simple.

Although it is always easy to pinpoint the exact reason (s) for the failure of a corporation, it is slightly more difficult to put a finger on the causes of success.  Especially when it comes to ethics as a guide to good behavior – or as a ‘brake’ to ethical transgressions. But here is the finger:  Human Resources (HR).  HR, for all purposes, should be the department responsible for establishing an organization’s ethical work environment.

Below are some fool-proof steps to follow to ensure that a company and its employees are engaging in ethical conduct. They are based on the 5 simple, yet immutable, leadership principles outlined in my 2010 #1 Canadian business best seller, “A Tale of Two Employees and the person who wanted to lead them”

Articulate an ethics code.

HR should clearly define what constitutes acceptable and unacceptable behavior in their organizaiton – in clearly stated, unequivocal terms – by creating an ethics code.  For this to work properly, it must be made widely known, repeated regularly and pertain to all employees, regardless of their standing – and that includes the CEO and Board of Directors!

Ethics and the hiring process.

Once an ethics code is established, it should be a main tool in the hiring process – not just a reference or insert in the prospective candidate’s interview package.  All job candidates should be asked to express their personal ethics and be given the chance to discuss, clarify and even challenge their potential employer’s code.

Ethics and role descriptions.

The ethics code should also be referenced in each job description for both new and current employees.  Additionally, HR should have every employee agree to and sign a copy of the code.  These copies should be kept on file, and updated annually, to ensure each employee is reminded about and understands what the organization’s ethical expectations are from them.

Ethics training and development.

A corporation cannot rely on an employee only knowing what is expected of them.  It must be ingrained by simulations, case examples, role playing, etc.  Practice makes perfect, right? Right!

Align the ethics code with performance management.

It’s an inviolate management axiom that ‘what gets rewarded, get done’. Adjusting an organization’s performance management system to include ethical behavior, therefore, is an important HR activity for reinforcing the ethical behaviours desired.  To further enforce ethical behavior, HR needs especially to monitor ethical outcomes and correct any transgressors.

By following these few – relatively simple – steps, HR can help create a trust-worthy business environment and, in so doing, play a major role in restoring the faith of consumers and employees in our modern corporations.