A corruption resistanceresource: Guideline

Codes of ConductThe next stage

Codes of conduct 1

Codes of Conduct

The next stage

March

2002

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This publication is available in other formats for the visionimpaired. Please advise of format needed, for example large printor as an ASCII file. It is also available in HTML format, atwww.icac.nsw.gov.au

ISBN 0 7310 7247 2

March 2002 Copyright in this work is held by the Independent Commission Against Corruption. Part III, Division 3

of the Commonwealth Copyright Act 1968 recognises that limited further use of this material can occur for the

purposes of 'fair dealing', for example; study, research or criticism etc. However, if you wish to make use of this

material other than as permitted by the Copyright Act 1968, please write to the Commission at GPO Box 500,

Sydney NSW 2001.

Thank you

The assistance of the following is appreciated:

Dr Andrew Brien

The Audit Office of New South Wales

New South Wales Premiers Department

Office of the New South Wales Ombudsman

Public Sector Management Office

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Contents

Foreword ................................................................................................4

Chapter 1: Reviewing and maintaining an effective code of conduct ............5

Chapter 2: Developing an effective code of conduct ..................................7

Chapter 3: Implementing your code of conduct .......................................10

Codes of conduct check list ....................................................................15

Appendix A: Got an Ethical Problem? ......................................................16

References and further reading................................................................18

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Foreword

Almost every public sector organisation in NSW now has a code of conduct an achievement to be

proud of.

A code of conduct helps staff to identify the boundaries between desirable and undesirable behaviour.

Codes of conduct are important tools in organisational development. They are part of a range of

organisational tools and strategies that together help build and sustain organisational integrity and

strengthen agency resistance to corruption.

The Independent Commission Against Corruption (ICAC) wants to help agencies to take their

organisational development even further by making the most of their code of conduct. Having a code

of conduct is a significant beginning. Developing a living, practical and well-understood code of

conduct will help to take organisations to the next level.

This publication looks at how to make codes of conduct more effective and relevant to NSW public

sector agencies and local councils. It complements the model codes produced by the Premiers

Department and the Department of Local Government.

Codes of conduct the next stage outlines the steps to take to:

Review your code,

Structure a good code of conduct, and

Implement your code successfully.

I hope that agencies use Codes of Conduct the next stage to get the most out of their code of

conduct.

Please let us know how useful you found this publication there is a form at the end if you would like to

provide some feedback.

Irene Moss AO

ICAC Commissioner

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Chapter 1: Reviewing and maintaining an effectivecode of conduct

A code of conduct is an important part of the overall organisational framework that helps to build and

strengthen agency integrity and corruption resistance.

A code will be the most effective if it is integrated into an organisations culture and its principles

embraced by management and staff and reflected in systems and processes. A codes value also

depends on its ongoing use and relevance.

ICAC investigations invariably uncover substantial breaches of codes by public officials. The public

officials in the witness stand usually claim that they were either not aware that a code of conduct existed,

or that their organisations code was irrelevant.

What our investigations have taught us about codes is that simply having a code of conduct is not

enough it must be developed and implemented effectively, then regularly reviewed.

Three steps to a more effective code of conduct

There are three basic steps to creating a more effective code

1. Review your existing code for currency, relevance and accessibility (this chapter)

2. Develop a revised code with a style and structure that meets the particular needs

of your organization (Chapter 2)

3. Implement your code in a way that will make it an accepted and well-used tool

for influencing decisions, actions and attitudes in your workplace. (Chapter 3)

Maintaining relevance with regular reviews

Most public sector agencies in NSW have a code of conduct in place. For most agencies, the first step

towards a more effective code is to review and update an existing code of conduct. Periodic reviews are

also a good way to ensure the code remains relevant.

Some of the key steps to reviewing a code of conduct are:

give one person responsibility for overseeing the review process

obtain senior management support for the review process

develop a review plan including key tasks, allocations of responsibility and timeframes

develop an effective communication strategy to ensure staff are informed about the reviewprocess and its purpose

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give all members of staff the opportunity to participate in the review, for example through a staffsurvey, staff focus groups or even an anonymous suggestion box.

consider seeking input into the review process from a limited number of clients/members of thecommunity that deal with your organisation

draft the revised code, incorporating the results of the consultation process and public sectorvalues and standards. (See Chapter 2 for more information)

arrange a launch for the revised code. Introducing a new or revised code of conduct is animportant organizational event. The launch should reflect this.

devise an implementation plan to build understanding and acceptance amongst code users andhelp ensure that it is actively used in peoples day-to-day work . (See Chapter 3 for moreinformation)

Ineffective approaches to codes of conduct

The develop and file approach where codes are developed but then filed

away in an induction manual. When this happens, organisations de-value

their codes and staff can become cynical about the codes usefulness.

The big stick approach. A code should include sanctions for substantial

breaches, but focusing too much on discipline can alienate staff and create a

them versus us attitude.

A lack of management commitment can create a cynicism among staff

that may erode ethical standards rather than improve them.

A code developed without staff involvement risks being regarded as

irrelevant because staff may feel it was imposed on them.

Sometimes an organization responds to an ethical crisis by updating its code

of conduct. A code of conduct is not a quick fix solution to ethical problems.

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Chapter 2: Developing an effective code of conduct

A code of conduct will be more effective if it is well-structured and written in a style that suits the intended

readers.

Dos and Donts of developing a code

Do:

start with your organisations values

be relevant, practical and deal with real issues

use model codes as a starting point only

make the code enforceable

write it in plain english.

Dont:

try to cover too much

create the code as an industrial instrument.

1. Start with values

A good place for your code to begin is with an explicit statement of the values your organisation wishes

to operate by. Everything else in the code should be built on this.

There are many sources of guidance on values, including the Premiers Department Model code of

conduct for NSW public agencies and Code of Conduct and Ethics for Public Sector Executives, the NSW

Ombudsmans Principles of Administrative Conduct and the ICACs model of public duty.

Of course, the code must embrace the fundamental public sector values and standards. These values

hopefully will coincide with the values expressed by staff during the codes development. If they do not,

some preliminary work will be necessary, such as ethics awareness training to help staff understand

public duty principles.

Everything in your code should link back to your organisations values. For example, the need to

disclose possible conflicts of interest flows from the need to put the public interest ahead of private

interests and the need to declare and record gifts and benefits flows from the need for honesty,

openness and accountability.

2. Make the code of conduct practical, helpful and relevant

A practical and relevant code of conduct will promote an ethical ideal as a model of behaviour and

also acknowledge the realities of the work environment. Think about any areas of specific concern or

risk in your organisation and deal with them in your code. For example:

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regulatory organisations could include information to guide staff members with wide

ranging discretionary powers

organisations that handle large quantities of public money may need guidelines so staff

exposed to identified risks can understand what behaviour is expected

organisations should provide general guidance on how to resolve ethical dilemmas that

are not specifically dealt with in a code. The ICAC has produced guidelines for public

officials faced with an ethical dilemma at work. (Appendix A) This information could be

an annexure to a code of conduct.

Include relevant examples to help staff assess what behaviour is acceptable. For example, in

addressing hospitality, provide examples of what may and may not be accepted by staff. Hospitality

might be a simple working lunch, or it might extend to a valuable banquet. While it may be within the

bounds of a code for a public official to accept the former, in some cases it would be unacceptable to

attend the latter. Ultimately, these matters have to be decided on a case by case basis. Your

organisation should aim to spell out what is acceptable and what is not.

3. Use model codes issued by central agencies as starting points only

Model codes, such as the Premiers Departments Model Code of Conduct for NSW Public Agencies

and the Department of Local Governments Code of Conduct, are useful starting points when

developing a code of conduct. However, an off the shelf solution which doesnt take into account the

unique ethical dilemmas faced by your organisation might not be the most appropriate or effective.

The Premiers Department encourages organisations to depart from their Model Code of Conduct for

NSW public sector agencies to take into account local needs and circumstances.

4. Make your code enforceable

A good code of conduct will guide staff aiming to uphold high standards of behaviour. It will also

include sanctions and outline the disciplinary processes resulting from breaches of the code.

Sanctions show that staff are accountable for their actions and warn that poor behaviour has adverse

consequences for individuals. However, sanctions should be used only as a last resort when people

have substantially breached the code.

5. Keep your code simple, direct and positive.

Write your code of conduct in plain english, use direct speech and have an inclusive and positive style.

Your code will be more effective if staff can quickly and easily read and understand it.

Consider including a preamble to your code noting that it applies equally to all staff, including the

CEO or General Manager and senior management.

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A local council in NSW added the following introduction to its code of conduct to promote

ownership of the code amongst staff: Our code of conduct applies equally to everyone

in Council. It is designed to help us maintain our reputation for integrity and fair dealing

and give us a basis for making day to day decisions.

Using aspirational language and including fundamental guiding principles will help your code of

conduct work as a benchmark for ethical behaviour. If your code is seen as just a set of rules, the reader

will assume that only those issues addressed in the code are of concern. Anything the code does not

mention then becomes acceptable. Staff members who look for loopholes will defeat a prescriptive

code. Similarly, the lack of guiding principles will leave the reader without direction when a new

situation arises.

6. Dont establish the code as an industrial instrument

This may seem at odds with the earlier point that a code must be enforceable. While substantial

breaches of the provisions of a code should be able to be dealt with, the purpose of a code should not

be to create an industrial instrument with a schedule of offences that can be used against staff. If your

organisation needs to detail workplace procedures, put this information into a separate document.

7. Dont try to cover too much in the code of conduct

Try not to include too much detailed information in your code. For instance, in your code, refer briefly to

your organisations protected disclosures policy and procedure rather than include them. Consider

generating separate documents when you need to deal with specific problem areas in detail.

An agency reviewed its code of conduct. It was over 80 pages long and dealt with topics

in great detail. A staff survey about the code revealed that most members of staff had

not read the document as they found it unwieldy and difficult. The agency shortened the

revised code to make it more reader friendly. Many of the sections were made into

stand-alone policies and procedures, and simply referred to by name in the new code.

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Chapter 3: Implementing your code of conduct

Sound implementation is crucial to a codes success. Implementing a code of conduct is an ongoing

process that is just as important as the developmental phase. Successful implementation programs have

some common features.

Common features of successful codes of conduct

senior management support the code and lead by example

staff are involved in all stages of code development and implementation

support mechanisms are in place to encourage the use of the code

code of conduct (and general corruption awareness) training is ongoing

the organisation continually promotes its ethical culture (a code of conduct is an

important tool in this)

the code is enforced when necessary

the code is regularly reviewed.

The diagram on the facing page shows how specific organisational features work together to influence

ethical culture. These features tend to be interdependent. Therefore, a code alone will not successfully

influence behaviour if other key features are missing or inconsistent with the code.

You can use the diagram as a framework to guide the implementation of your code.

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Administrative structures Lines of communication Work structures Supervisory, accountability

and decision-making systems

Resources Avoid high pressure or

under-resourced areas withcustomer service delays

Enough resources forcorruption resistancestrategies

Corporate strategies Risk Management Plans that

address corruption risks Fraud management plans eCorruption strategies monitoring and review

programs

Systems, policies andprocedures Internal reporting, grievance

handling and complaintshandling

Internal auditing andinvestigation

Recruitment and performancemanagement

Policies including Gifts andbenefits, Conflicts of interestand others

External environment Guarantees of service Statements of business

ethics Guidelines on dealing

with the agency Complaints handling

Training and development Induction Ethical awareness and

decision-making Leadership Ethical component to all

training and development

Public duty valuesServing the public interestActing with integrity Honesty Openess Accountability Objectivity (fairness) CourageDemonstrating leadership

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1. Senior management leading by example

Wholehearted management support for a code of conduct is important. This means leading by

example, supporting those follow their lead and being critical of those who do not.

Stories of ethical action by top management are a useful strategy for setting the ethical tone. Stories

educate and inspire staff and quickly become fixed in the corporate culture. Conversely, stories of

management displaying doubtful ethical conduct, for example, accepting generous hospitality from

private sector bodies, can have a very damaging impact on ethical standards throughout an

organisation.

2. Involving staff

Involve staff in any code review and when developing and implementing new codes. The code is more

likely to be practical and relevant to the workplace if staff are fully consulted. Openly encouraging each

person to contribute to a codes development also helps to engender a culture of trust.

The process of reviewing a code or developing a new one is a good opportunity to reinforce an ethical

work-place culture. Discussing and defining ethical behaviour will build a sense of purpose and support

amongst staff wanting to do the right thing. Staff involvement in developing the code can also be one

of the best forms of ethics training as it opens up discussion about ethical issues in the organisational

context.

3. Entrenching a code of conduct

Your organisation needs an infrastructure to support the code of conduct and mechanisms in place to

encourage the codes use. These will help staff deal with issues that can sometimes slip between the

cracks of a code.

A good start could be to have designated individuals who can help staff apply a code. It is useful for

staff to being able to talk to a person or people knowledgeable about the values of your organisation

and its code. A trusted and respected senior manager could be available for confidential consultation;

or a process established to help members of your organisation find an honest broker for this purpose.

Your organisation may choose to establish an ethics committee, which should ideally include staff

representatives as well as management representatives. If you adopt this approach consider whether the

committee is an advisory or decision-making body and resolve issues such as confidentiality before

forming the committee.

Support the code of conduct with accessible policies and procedures dealing in more detail with

important areas covered in the code. In this context, you might consider:

Conflicts of interest

Gifts and benefits

Internal reporting

Secondary employment.

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4. Tips for training and education about codes of conduct

There are many opportunities for workplace training in ethical conduct.

Code of conduct and corruption awareness training

Training in codes of conduct is crucial for new starters. Focus on the benefits of maintaining a corruption

free environment, such as the value of personal and organisational integrity. Let staff know that any

form of corruption is unacceptable and that help is available to resolve ethical dilemmas.

Training in codes of conduct can be relevant and challenging. For example, scenario-based training on

corruption prevention usually works well. Relevant case studies can promote vigorous discussion and

help participants recognise and deal with ethical problems that may arise in their workplace.

The training should also cover relevant corruption risks and how to report corrupt conduct.

As well as introducing staff members to your code of conduct at the recruitment or induction stage,

refresher training is important. This does not always need to be training in the formal sense. For

instance, team meetings could be used as a forum to discuss workplace problems and their relationship

to the code. This will help to ensure that the initial message imparted during induction is not lost.

Positive statements and memos from a CEO responding to particular incidents are also an effective way

of educating and motivating staff.

ICAC research indicates that statements from a CEO about his or her own stance on

ethics have more impact on employee decision making in the workplace than do

employees own ethical beliefs and goals.1

Induction training

Always incorporate a discussion of the code of conduct in induction training. This is the time to try to

establish new staffs understanding of the ethical standards expected. Cover the meaning of corrupt

conduct and the need to avoid it, resolving conflicts of interest and how to report problems. Make staff

aware of the support available to deal with possible corrupt conduct, including internal reporting

procedures and protected disclosures, and the option of contacting the ICAC for advice.

Other staff training

All activities of an organisation have an ethical dimension. All staff are likely to face ethical challenges

at some time in their employment. All training can incorporate consideration of the related ethical

challenges and shows how the code of conduct might apply in the particular situation.

1 ICAC (2000) Ethical culture survey results

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5. Ongoing promotion of an ethical culture through your code of conduct

Take every opportunity to promote your organisations ethical culture. Promote the ethical message

contained in a code of conduct as part of this strategy. Possible promotion strategies include:

include the code in information packages sent to job applicants

refer to the code in job interviews and make an awareness of public sector values a job selection

criterion

attach a copy of the code to the letter of offer to a prospective staff member

regularly include segments from the code in staff circulars and newsletters and link them to topical

ethical issues

produce summary versions of the code that can be carried by staff

issue the code to contractors and specify observance of relevant provisions in the contract

inform clients of the relevant contents of the code

explicitly consider the code in the context of policy and procedural reviews

include features of the code in the corporate plan, enterprise or award agreements, or

performance agreements and refer to the code in key policies and procedures

ensure that the code is readily accessible to all members of staff.

6. Enforcing the code of conduct

An organisation needs to be seen to deal effectively with unethical behaviour. This sends a clear

message to staff about the importance of maintaining high ethical standards and also offers support to

those who are doing the right thing.

Codes can be ineffective if sanctions are not enforced. The ICACs research publication Ethics: the Key

to Good Management points out that while codes of ethics and conduct are important for clearly

identifying the boundaries of desirable behaviour, the existence of a code is not always in itself sufficient

to stop unethical behaviour.

Managers must be prepared to deal with breaches of a code if the code is to be effective. If managers

do not deal effectively with substantial breaches of a code, the perception of staff could be that

management is not serious about discouraging unethical behaviour.

A key finding of a recent ICAC ethical culture survey was that staff who knew about

their code of conduct and believed that workplace rules and procedures were

enforced, perceived that their senior executives were more encouraging of honest

behaviour.2

However, too much emphasis on penalising bad behaviour implies staff cannot be trusted. The

challenge is for an organisation to balance trust for its staff with staff accountability.

2 ICAC (1998) Ethics: the key to good management

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Codes of conduct check list

Is the code of conduct written in plain english?

Does it use aspirational language?

Does it have an inclusive and positive tone rather than a focus on compliance and discipline?

Does it state the objectives of the code? Is its content consistent with the stated objectives?

Does it provide a statement of values?

Does it provide general principles to assist with ethical decision-making?

Does it provide behavioural standards?

Is it relevant to your organisation and does it provide practical examples?

Does it explain why upholding the code is important?

Does it refer to other key policies and procedures (for example, policies on internal reporting,

accepting gifts and benefits and conflicts of interest)?

Does it include sanctions for unethical behaviour?

Was it developed in consultation with a range of staff?

Do all staff members have a copy of the code or easy access to the code?

Is the code publicly available? Do you ensure that your organisations clients and the

community know about it?

Does your organisation run code of conduct training sessions tailored to particular groups,

using case studies and examples?

Do managers value and actively promote the content of the code, and lead by example?

Is there an infrastructure in place to support the code? Is there someone to whom staff can turn

to assist with interpreting the code?

Is the code regularly reviewed and updated? When was it last reviewed? Did staff participate in

the review?

Are new provisions included in your code of conduct as the need arises? When did this last

occur?

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Appendix A: Got an Ethical Problem?

There are many types of ethical dilemmas that you, as a public official may face in the course of your

work. One of these may be when somebody in the course of your work asks you to do something you

think is questionable or not quite right. If this happens consider the following options:-

Consult your Code of Conduct or other relevant guides or policies that relate to the decision

making area, to see if they help to guide you in resolving the dilemma

Clarify with the person seeking to influence you or instructing you, exactly what you are being

asked to do

Ask for the request or instructions to be put in writing

If the person is not your supervisor, involve your supervisor in the matter

Give the person seeking your assistance or giving you instructions verbal and written advice

about the implications of the request or instruction

Document all exchanges on the issue

Seek advice from other people not directly involved, such as a trusted senior officer, the ICAC,

Ombudsman or Audit Office. You can contact these agencies anonymously if you wish.

If the above options fail, consider lodging a grievance using the grievance mechanisms in your

agency or making a protected disclosure as set out in your agencys Internal Reporting Policy

Remember - you have the right to question any instruction or direction given to you which

you think may be unethical or wrong. It is illegal for someone to instruct you to do

something unlawful.

Some useful numbers for you to note: Related Policies

Grievance handlers in your organisation

Name: Ph: Internal Reporting Policy

Name: Ph: Grievance Policy

Independent Commission Against Corruption

(02) 8281 5999

The Audit Office

(02) 9285 0155

NSW Ombudsman

(02) 9286 1000

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Contacting the ICAC

The ICAC offers a corruption prevention advice service on the form, content and implementation of

codes of conduct prepared by NSW government agencies and local councils. Please contact the ICAC

Corruption Prevention Duty Officer on (02) 8281 5999 if your organisation needs assistance in

reviewing its code of conduct.

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References and further reading

Articles

Brien, A. (1997) Regulating Virtue: Formulating, Engendering and Enforcing Corporate Ethical Codes,

Professional & Business Ethics Journal, Vol. 15 No. 1, pp.21 52

Longstaff, S. (1994) Why Codes Fail: and Some Thoughts About How to Make Them Work!, in N.

Preston (ed.) Ethics for the Public Sector, Federation Press, pp 237 246

Publications

Department of Local Government (1994) Code of Conduct (Practice Note 6)

Independent Commission Against Corruption (1998) Ethics: The Key to Good Management

Independent Commission Against Corruption (1999) Tips from the Top, Senior NSW Public Sector

Managers Discuss the Challenges of Preventing Corruption

Independent Commission Against Corruption (2001) The First Four Steps

Independent Commission Against Corruption (2001) Corruption Troubleshooting

New South Wales Treasury (1997) Risk Management and Internal Control Guidelines and Strategies for

Improvement

Premiers Department (1997) Model Code of Conduct for NSW Public Agencies

Premiers Department (1998) Code of Conduct and Ethics for Public Sector Executives

Legislation

Annual Reports (Departments) Regulation 1995

Annual Reports (Statutory Bodies) Regulation 1995

Independent Commission Against Corruption Act 1988

For the latest ICAC publications and resources, check www.icac.nsw.gov.au.

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Foreword Chapter 1: Reviewing and maintaining an effective code of conduct Chapter 2: Developing an effective code of conduct Chapter 3: Implementing your code of conduct Codes of conduct check list Appendix A: Got an Ethical Problem? References and further reading