The Power of Professionalism Case Study

Presented by Janette Minnaar

Janette@ethicssa.org

Agenda

Compiled by Dr Bruce Weinsteinwww.theethicsguy.com

Agenda

1. Ethics quiz

2. Case study

3. The law, corporate rules and ethics

4. Governing corporate ethics

Ethics Quiz

Compiled by Dr Bruce Weinsteinwww.theethicsguy.com

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1) You wake up one morning with the flu. Would you:

The flu is contagious and potentially deadly. The ethical obligations to prevent harm to others and to treat ourselves with compassion require that we stay home and rest when we have the flu. Loyalty to one’s company and the desire to avoid being a burden to one’s co-workers are noble impulses, but you’ll do more harm than good by going to work when ill. Although working at home is better than dragging yourself into the office, you are entitled to convalesce when you are not feeling well. Everyone, including you, will be better off if you take a few days or even longer to restore your health.

a) Stay at home and rest? b) Stay at home and work? c) Go to work, but avoid socialising with people? d) Go to work, but socialise only with the people you do not like?

Most Correct Answer: a) Stay at home and rest.

Source: www.theethicsguy.com

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2) You are having breakfast in a crowded restaurant and overhear two colleagues discussing confidential information about a client. They mention the client by name. Would you:

a) Mind your own business?b) Talk to your colleagues about the matter and leave it at that? c) Report your colleagues to a supervisor?d) Secretly record them with your cell phone’s video camera and post the clip on YouTube?

Most Correct Answer:

b) Talk to your colleagues about the matter and leave it at that.

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No one likes confrontations, but sometimes it is better to do something rather than nothing. This situation is such a time. Most likely, your colleagues are not doing this intentionally, but the client’s right to privacy and the reputation of your company may both be damaged if you do nothing. Unless the policy at your work place requires you to inform a supervisor, however, blowing the whistle is not the right thing to do if this is a first offence. After all, you have not given your colleagues a chance to correct their behaviour. Talking with your colleagues directly is the best way to honour your responsibilities to all parties. Saying something such as “I couldn’t help but notice that you were talking about some confidential things from work, and I wonder if I could hear it, maybe other people could too” will almost certainly do the trick. The duty to protect confidentiality is derived from the obligation to prevent harm and respect others. But if your colleagues tell you to get lost (or words to that effect), then it may be time to bring the matter to the attention of the appropriate person/s at work.

Most Correct Answer:

b) Talk to your colleagues about the matter and leave it at that.

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3) While driving you to lunch, your friend takes out her Blackberry and starts checking her e-mail. Would you:

Fiddling with a Blackberry, or any other cell phone, while driving is illegal and can harm both you and the people with whom you come into contact. As a witness to such behaviour, you not only have a right to speak up, but you have an ethical obligation to do so. If you do it in a respectful way, you will help your friend and prevent injury to her, yourself, pedestrians, and other drivers. If your friend ignores you or makes a rude remark, tell her to pull over and get out. You are sitting in the “organ-donor” seat after all.

a) Ask her to stop doing that?b) Ignore it? c) Tell her to pull over and let you out? d) Grab her phone and toss it out the window?

Most Correct Answer: a) Ask her to stop doing that.

The Power of ProfessionalismCase study

Article by Prof Frank Navran

The facts

• An engineer argued that his status as a licensed professional prohibited him from knowingly engaging in bad engineering.

• He was held to a higher standard, because he was a professional and that was the reason for his being hired.

• His profession’s code of professional conduct clearly outlined those higher standards. Specifically, the code prohibited him from knowingly engaging in “bad” engineering.

• These “ethical canons”, the engineering code of ethics, gave him standing and the correct language to use.

• It also gave him legitimacy to demand that the job be done right.

Shared standards

• Although not everyone in a company has professional standing, everyone can benefit from having shared ethical standards to guide them in decisions and ensure that every choice made at work reflects the highest ethical standards.

• “Professionalism does not require that we be part of a formal profession. It simply means that we will do our best every time, and that we will guide our decisions and actions by a set of shared principles that rise to the expectations of those whom we serve.”

• “Professionalism is available to all of us. It is the standard we should expect of each other, of those we lead, and of those who lead us.”

A professional versus being professional

• There are two definitions of “professional”: If you are doing work for which you are paid, you are a

professional. If you meet a prescribed standard of conduct in the performance

of that work, meet or exceed expectations regarding how you will behave in the execution of that work, you are being professional.

• This addresses not only the outcomes of the work, but also the manner in which the work is performed.

• It is expected that you will perform your work according to commonly held values. such as honesty, integrity, fairness, respect, compassion, courage, and accountability.

He

A professional versus being professional (2)

Commonly held values include:

• Honesty;

• integrity;

• fairness;

• respect;

• compassion;

• courage; and

• accountability.

Which of these values would be the common values in the financial planning industry?

A professional versus being professional (3)

• There is a reasonable expectation that you will perform your duties to the best of your ability, and a timely manner, in accordance with the best practices and to the highest ethical standards.

• In other words, irrespective of your function, your job title, your education/qualifications or your status within the organisation, you will behave as a professional.

• In summary: Professionalism presumes a set of standards in both the technical nature of the work we do and the ethical standards regarding the way do it, and extends beyond the boundaries of law and rules.

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Internal codes of best practice e.g.code of conduct,

conditions of service

Internally enforced:

disciplinary procedures

Company specific and detailed

Corporate governance

King I - III

Objective:long term

sustainability and success

Higher standard of expected conduct

in enterprise

Ethics of governance - King 3

Ethics is the reason for corporate governance. Therefore, corporate governance is grounded in ethical values.

The ethics of governance requires that all decisions and actions of the board and executive management be based on the following four basic ethical values, often known as RAFT:

•Responsibility: The board should assume responsibility for the assets and actions of the company and be willing to take corrective actions to keep the company on its strategic path.•Accountability: The board should be able to justify its decisions and actions to shareholders and other stakeholders who require it to do so.

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Ethics of governance - King 3

•Fairness: In its decisions and actions, the board should ensure it gives fair consideration to the interests of all stakeholders of the company.•Transparency: The board should disclose information in a manner that enables stakeholders to make an informed analysis of the company’s performance.

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The governance of corporate ethics - King 3

•The King 3 Report on Corporate Governance, published in South Africa, in 2009, requires organisations to build an ethical culture with a trusted reputation in order to prevent, reduce, or eliminate misconduct (unethical or unlawful conduct).•Chapter 1 of the King 3 Report states that companies must:

– involve ethics in all company aspects and activities;– the board must show strategic ethical leadership; and – ethics must be actively managed in the company.

•This is achieved through a prescribed ethics-management programme.

Resource: Refer to section 1 to 5, King 3 report

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The governance of corporate ethics - King 3 (2)

King 3 proposes four main steps to an ethics-management programme:

1. Assess the current culture;

2. choose and codify your values to support a healthy culture (code of ethics);

3. institutionalise your chosen values; and

4. regularly evaluate and report on the effectiveness of your formalised standards.

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The governance of corporate ethics

Step one: assess

•Step one is to assess your organisational ethics risks by identifying beliefs, practices and conduct that have an impact on the company’s ethics performance.

•A document review (to establish, for example, whether the company has a code of conduct or a gift policy and whether it is up to date) may also be conducted.

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The governance of corporate ethics

Step two: Choose and codify corporate values

•If no defined values are in place, choose collective values and standards.

•The values chosen are those principles, standards and actions that the leadership in an organisation consider to be worthwhile and important.

•The values/standards set should become an integral part of the company’s identity (“who we are”) and culture (“how we do things”).

•These values are “empty” if they are not part of the strategy and daily operations of the organisation (must be “lived”).

•A company’s ethical values should permeate all decision and actions and be visible in the way in which the company treats its internal and external stakeholders.

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The governance of corporate ethics

Step two: Choose and codify corporate values (2)

•Once an organisation’s values have been assessed and new values have been chosen, the organisation should codify these values. •These values or standards are formulated in a code of ethics/conduct to provide the foundation and direction for business practice, to guide staff in terms of desired conduct and “formally” to express standards to all stakeholders.•Ideally, a code should balance positive and negative risks by linking core ethical values to rules and guidelines.

Source: Prof Willem Landman, former CEO, EthicsSA

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The governance of corporate ethics

Step three: Institutionalise the values

•The company’s code of ethics (and related policies) should be institutionalised by integrating the code (and related policies) strategically and operationally into the company culture (the way things are done).

•It is not enough to develop the company’s ethical standards and simply to proclaim the company’s commitment to the standards (print, post and pray).

•The operational components of an ethics programme typically consist of:

– Ethics-management structures and offices, such as an ethics office;

– a communication strategy to internal and external stakeholders;

– a whistle-blowing facility to report unethical and illegal conduct; and

– an ethics-training programme.

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The governance of corporate ethics

Step three: Institutionalise the values (2)

•An ethical culture is also built by:– Executive leadership;– structures of authority and responsibility;– formal decision-making processes;– hiring and promotion of talent;– performance management and review; and– disciplinary procedures.

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The governance of corporate ethics

Step four: Assess effectiveness of ethics programme

•It is recommended that an assessment/audit of a company’s alignment of its strategies and operations with its chosen ethical standards take place.

•A company may use its internal audit department to assess the efficiency and effectiveness of its ethics systems.

•The objectives of internal ethics auditing are:

– Quality control of ethics performance;

– evaluation of the adequacy and effectiveness of systems and procedures; and

– assessment of the quality of progress in ethics performance.

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The governance of corporate ethics

Step four: Assess effectiveness of ethics programme (2)

•The objectives of external ethics auditing are to:– Meet legal compliance standards;– build trust and credibility; and– provide credible information for decision-making by

stakeholders.

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The governance of corporate ethics

Step five: Reporting and disclosure

•A company’s ethics performance needs to be reported and disclosed to internal and external stakeholders. •The objective is to reinforce and enhance the company’s ethical culture.•Such a report should be clear, credible and comprehensive.

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The governance of corporate ethics

Step five: Reporting and disclosure (2)

•It is furthermore recommended that independent verification and assurance of a company’s ethics performance be done. •Independent verification of the systems and processes underpinning the ethics performance of the organisation will enable an assurance statement. •Assurance requires the application of a clear set of principles and standards for evaluating a company’s ethics performance. •This process is aimed at providing stakeholders with verified information in order to form opinions and enable decision-making based on the disclosed information.

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Thank you very much for your attention!

Questions?

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