Corporate ethics starts at the top.

Moses had it easy. All he had to do for his organization’s ethics policy was to climb Mt. Sinai, wait for it to be delivered to him and then carry the tablets back down. Your organization, on the other hand, can’t afford to wait around for divine intervention when it comes to drafting an ethics policy.

Developing a code of ethics or conduct for your business is an essential step to take, and one that too few take seriously, according to experts. Many organizations take the approach that ethical behavior is just common sense.

“The pitfall for some companies is they think it’s obvious and therefore you don’t have to talk about it,” iDNA Chief Ethicist David Schmidt says. iDNA is a communications firm that assists companies in ethics training.

Developing and following an ethics policy provides your employees with the moral clarity that is often required in the workplace, where conflicting goals can sometimes lead to employees bending the rules to help the company succeed. However, it’s not simply enough to write an ethics policy; it has to be followed to the letter.

“It’s almost worse to have one and never follow it than not to have one,” says Peter Petesch, managing partner at Washington, D.C.-based law firm Ford & Harrison LLP. The firm specializes in assisting companies with human resource issues such as ethics policies.

Climbing the Mountain
Schmidt says that when companies sit down to develop their ethics policies, they should be careful not to confuse them with ethics statements. The latter are often more general and state how the company hopes to behave, but don’t get into compliance issues. An ethics policy has clear, delineated guidelines for specific situations in the workplace and details how employees will be held accountable.

Don’t get the idea, however, that you should cloister yourself away in your office like Moses did on the mountain and then emerge with the policy already set in stone. Developing an ethics policy should be a collaborative effort, with input from all areas of the company.

“One approach that I have found real successful is that you almost have focus group discussions,” Schmidt says. “You bring people together to candidly talk about the realities – what do we face at work, what are the types of values we need to live up to?”

Dean Thompson, senior strategist for iDNA, agrees. “It cannot be a top-down policy; it has to be bottom-up. It has to come from both ends.”

Schmidt says the best corporate ethics policies are created with a  great deal of employee input, because it makes them more likely to be understood and followed. Special attention should be paid to areas of the company where standards could be changing, Schmidt says. “If a company is developing a code of ethics or they wish to maintain the relevance of the code of ethics, they need to look at the areas where there have been the most change,” he says.

Forces such as globalization and advancing technology have created entirely new situations for companies, and their ethics policies have to be able to keep up with those changes. Schmidt uses the example of e-mail, which today is a widespread and accepted form of corporate communication. Ethics policies should cover what is and isn’t appropriate for e-mail, or else problems can arise. “What might be taken as a very simple offhand remark face-to-face can take on a whole new meaning over e-mail,” he says.

After the policy is put in place, a company should be aggressive about promoting it and making sure all employees understand it. “It can’t just be rolled out once [and forgotten about],” Petesch says.

Thompson says one client, a large national company, promoted its ethics policy in a subtle, yet effective, way. During its annual companywide meeting, the client placed all of its employees into teams that weren’t based on their locations, placing employees from different areas of the country on the same team. This made employees aware that their actions had wide-reaching impacts. “You’re thinking about that guy who has a family in California, or that newlywed in Boston,” Thompson says.

Honor Thy Ethical Guidelines
Once your company has determined exactly what its ethics policy is, you’re still not done yet. Establishing the compliance policy is almost as important as the ethics policy, Petesch says. “It’s terrible to have an ethics policy that simply sits on the shelf,” he says. “For publicly traded companies to have an effective policy for reporting what people believe are acts that amount to fraud on the shareholders, that’s obviously a very important element.”

Compliance is essential, but there’s no one right way to establish it, Petesch continues. “There are organizations that have separately empowered ethics officers, there are organizations that have placed that emphasis with HR, there are organizations that have placed the emphasis with the financial department or the legal department, and there are some where it’s all of the above,” he says.

“The leading companies ... have a philosophy that everyone should be his or her own compliance officer,” Schmidt says. Confidential hotlines are another preferred method for employees to report unethical behavior that also protect their identities and therefore promote reporting. He says some companies establish “employee of the month” programs that recognize employees for ethical behavior in the hopes that others will model their behavior off of them.

No matter how your company establishes compliance, experts agree that it must be consistent throughout the entire company. Petesch says he advises clients to keep the investigative portion of compliance independent from the executive team.

“If they see the officers doing [something unethical], it’s going to come back and bite them because it creates a culture of cynicism,” Schmidt says.

Petesch also warns against making the consequences of unethical behavior too rigid, saying that standards should be scaled to the severity of the situation. “If you say in a policy that you’re going to do X but you end up doing Y, it’s going to haunt you eventually,” he says.

Wandering the Desert
Unethical behavior can have a chilling influence on a company, but establishing and promoting an ethics policy can put an end to much of it. In fact, Thompson says, the vast majority of unethical behavior is committed strictly out of ignorance of the company’s policies. “It just happens to be wrong and they don’t think about it,” he says. For example, a client had one employee who was chronically late for work. After investigating, it was discovered that the company’s policy on when to come into the office was never clearly announced or promulgated.

Developing an ethics policy can give your employees guidance, and prevent them from wandering the desert without knowing they’re going in the wrong direction.