Reaping What You Sow - Center for Farm Financial Management

Transcription

1
Copyright © 2010 by the Center for Ethical Business Cultures®
Ethical Business Cultures:
Reaping What You Sow
Minnesota Crop Insurance
Conference
Ron James
President and CEO
Center for Ethical Business Cultures
15 September 2010
Celebrating over 30 years of business commitment to ethical cultures.
Copyright © 2003 by the Center for Ethical
Business Cultures®.
1
About the Center for Ethical
Business Cultures
Mission
To assist business leaders in creating
ethical and profitable business cultures at
the enterprise, community and global levels
Background
931 year old nonprofit organization
9Began partnering in 1988 with University of St. Thomas
9Member of the Advisory Group to the US Sentencing Commission
9Advises Boards and Executive Leaders on “Tone at the Top”
9Building a Bridge Between Thought and Practice Leadership
Why is it Important?
Organizations that build an ethical culture:
9 Do it because it’s the right thing to do
9 Outperform organizations that don’t
9 Reduce their exposure to ethical lapses
that cause breakdowns
2
Goals for the Session
Examining and Learning How to Use Different
Ethical Approaches in Business
Scanning the Environment to Examine the Trends
in Ethics in Business
Insights into How Organizations Build and Sustain
Ethical Cultures
To highlight how building an ethical culture adds
value to an organization
Examining Ethical Approaches
3
Keep Out
Extremely Dangerous
High Voltage!!!
As the new mayor of Happy Hills, would
you direct that this sign be:
9Taken down or altered?
or…
or…
9Not taken down?
7
Ethical Approaches
Consequences
9 What will be the effects of the proposed
action on any stakeholders?
Absolute Principles
9 Will the proposed action be in alignment
with universal ethical principles?
Synthesis
9 Both stakeholder consequences and
absolute principles must be considered.
8
4
Ethical Approaches
Beyond the Absolute Principles and Consequential
approaches:
9 Duties – Obligations to a community of common
interests, i.e. fiduciary responsibility
9 Rights – Fair distribution of opportunities and wealth or
basic freedoms and liberties
9 Interests – (Consequential) Harms and benefits to the
interest of parties affected
9 Virtue – (Absolute Principles) A positive trait of
character including prudence, impartiality, courage,
justice, and belief/trust
Scanning the Environment
5
Who Do You TRUST?
How much do you TRUST each institution to do what is right?
(2008 - 2010)
Percent
America’s
Europe
Asia
US/Canada/Brazil
France/Germany/Russia
China/Japan/India
Business 2008
58/49/61
30/35/42
54/61/74
Business 2009
36/45/67
30/34/52
62/63/71
Business 2010
54/na/62
36/40/42
62/57/67
Govt. 2008
39/39/22
35/27/38
79/45/49
Govt. 2009
30/51/51
34/36/48
72/45/42
Govt. 2010
46/na/na
43/43/38
74/na/43
Source: 2010 Annual Edelman Trust Barometer
Confidence in Leaders
Source: Harris Poll March 9, 2010
6
Purdue
Pharma
PurdueNews
Pharma
Ethical Breakdowns in the
Bristol Myers-Squibb
Worldcom
Worldcom
Enron
Enron
Tyco
Tyco
HealthSouth
HealthSouth
Global
GlobalCrossing
Crossing
Arthur
ArthurAnderson
Anderson
Adelphia
Adelphia
Bristol Myers-Squibb
Bank
Bankof
ofAmerica
America
JP
Morgan
JP MorganChase
Chase
Take-Two
Interactive
Take-Two Interactive
Software
Software
Royal
RoyalDutch
DutchShell
Shell
Reliance
Communications
Reliance Communications
The
TheMcLaren
McLarenGroup
Group
Mattel
Mattel
UBS
UBS
Societe
SocieteGenerale
Generale
PetroChina
PetroChina
AGA
AGAMedical
MedicalCo.
Co.
Citibank
Citibank
Bear
BearStearns
Stearns
Sanlu
Sanlu
Bernard
BernardMadoff
Madoff
Morgan
MorganStanley
Stanley
Putnam
Putnam
Qwest
Qwest
UnitedHealth
UnitedHealthGroup
Group
BUCA
BUCA
Siemens
Siemens
Hewlett
HewlettPackard
Packard
Parmalat
Parmalat
Cendant
Cendant
Computer
ComputerAssociates
Associates
KPMG
KPMG
Hyundai
HyundaiMotor
Motor
Boeing
Boeing
American
AmericanRed
RedCross
Cross
Johnson
&
Johnson &Johnson
Johnson
13
How Do You Measure-Up?
Rating the honesty and ethical standards
of people and professions (very high/high):
9Nurses
9Medical Doctors
9Policeman
9College Teachers
9Bankers
9State Governors
9Lawyers
9Business Executives
9Congressman
9Car Salesmen
83%
65%
63%
54%
19%
15%
13%
12%
9%
6%
Source: Gallup Poll. December 2009. Honesty and Ethics
7
Two Languages of Business
Financial
Performance
Behavioral
Performance
Misconduct at Work
16
2003
Source: Ethics Resource Center's 2009 National Business Ethics Survey
2005
2007Copyright © 2010 by the Center
2009
for Ethical Business Cultures
®
8
Reporting Misconduct
17
Source: Ethics Resource Center's 2009 National Business Ethics Survey
The Disconnect
Overall
Where I work, people
do not “get ahead”
unless their behavior
clearly demonstrates
company’s values.
Where I work, ethical
issues discussed w/o
neg consequences.
Senior
Mgmt
Manager
NonMgmt
66%
57%
48%
77%
72%
60%
Source: Kenexa WorkTrends 2008
9
Knowing you would never be caught, would you
act unethically to make more money or get ahead?
Source: Junior Achievement/Deloitte Poll December 2007
* Yes and Not Sure combined
Cheating Among MBA Students
56% of MBA candidates surveyed
admitted they had cheated at least once
9 “culture of greed within MBA schools”
schools”
9 “get it done at all costs”
costs”
9 “shifting priorities from meeting customers’
customers’ needs to
protecting shareholders profits”
”
profits
Over 16 years, on every study of cheating,
except one, business students led the way
Source: McCabe, Butterfield & Trevino, September 2006
20
10
Top 5 Drivers of Unethical Behavior
Pressure to meet unrealistic business
objectives
Desire to further one’s career
Desire to protect one’s livelihood
Working within a cynical, demoralized
environment
Ignorance that the act was unethical
Source: AMA/HRI The Ethical Enterprise, 2006
21
Driving Ethical Culture:
The Regulatory Response
9 Sarbanes-Oxley Act of 2002
9 Public Company Listing Exchanges
9 United States Sentencing Commission
“…requirement that an organization shall promote an organizational culture that
encourages ethical conduct and a
commitment to compliance
with the law.”
Source: Amendments to the Sentencing Guidelines; May 10, 2004
22
11
A Collective View:
The Regulatory Response
9 Setting the
“Tone at the Top”
9 Ethical Culture
9 Codes of Conduct
9 Conflicts of Interest
9 Disclosure/
Transparency
9 Board Independence
9 Audit
9 Compensation
9 NominatingNominating-Governance
9 Auditor Independence
9 Consulting
9 Audit and Tax
Building & Sustaining Ethical Cultures
12
What is an Ethical Culture?
Based on Integrity
Discerns and chooses right versus wrong
9 Laws and Regulations
9 Societal Standards
Reaches for the higher standard in the gray
areas when all options seem right
25
Characteristics
in Building &
Ethical Mindsets
Sustaining an Ethical Culture
Values
Values
Driven
Driven
Self
Interest
Leadership
Leadership
Effectiveness
Effectiveness
Balancing
Balancing
Stakeholder
Stakeholder
Interests
Interests
Market
Based
Evolving Enlightenment
Source: Based on Chapter 2 “Mindsets & Culture” in Conscience
and Corporate Culture Copyright © Kenneth E. Goodpaster
Process
Process
Integrity
Integrity
Long-term
Long
Long-term
Perspective
Perspective
Assessment
Corporate
Conscience
Ethical
Culture Law
Based
13
Stakeholder Reciprocity
Balancing
Stakeholder
Interests
Community
Investors/
Owners
Competitors
Customers
Employees
Your
Organization
GovernmentGovernmentRegulatory
Suppliers/
Carriers
Environment
27
27
Modeling Ethical Behavior is Crucial
Leadership
Effectiveness
Leadership is the key ethical culture factor
Leaders must set the tone by “talking the
talk” and “walking the talk”
Top management is generally perceived to
exert more pressure on “getting the results”
and not on “how the results are achieved”
This translates into get the results “at all
costs.” “The ends will justify the means!”
28
14
Integrity Through Leadership
Leadership
Effectiveness
Integrity Relates to Employee Loyalty:
34% of employees rated as Truly Loyal vs. 36%
as High Risk
9 91% of truly loyal believe their organization was highly
ethical
9 35% of high-risk believe their organization was highly
ethical
Source: Walker Loyalty Report for Loyalty in the Workplace Sept 2007
Laying the Foundation
Values
Mission
9 Purpose
Vision
9 Image of the future
Values
9 Principles that guide behavior
Ethics & Compliance Codes
9 Legal and regulatory compliance and beyond
30
15
Shaping Organizational Culture
Process
Integrity
Values
9The shared norms and beliefs of the organization
that define acceptable behavior
9Inspirational and directional in nature
9Gives individuals a context to reflect on how their
personal values align
Ethics and Compliance Codes of Conduct
9The standards of behavior established to insure
compliance with the law, regulations, and rules
9Prescriptive in nature with specific well defined
expectations of behavior
Federal Sentencing Guidelines
9 Established by the United States Sentencing
Commission (USSC) in 1991 with focus on
compliance
9 Imposes fines, sentencing to probation, orders
of restitution and public notices of conviction
9 Offers incentives for organizations to “do the
right thing”
9 Updated to emphasize ethical conduct in 2004
32
16
The Seven Minimum Steps
1. Establish standards and procedures
2. Make high-level individuals
responsible
3. Exercise due care in delegating
authority
4. Provide communication and training
5. Utilize monitoring, auditing, and reporting
6. Consistently enforce through discipline
7. Take appropriate corrective action
33
Marketing
Hiring
Human
Resources
Sales
Incentives
Evaluation
Advancement
Finance
Recognition
Purchasing
Production
Communication
34
17
Building the Ethical Culture
Linking & aligning Mission, Vision, Values
and Ethics & Compliance
Leadership
Education & Training:
9
9
9
9
Governing Authority
Senior Management
Mid Level Managers
Front Line Employees
Connecting systems and incentives to values
Surveying for feedback
35
Do Ethical Cultures Add Value?
18
Global Employee Perspectives:
The Ethics Index
The Ethics Themes: Integrated to
form an Ethics Index
Ethics themes benchmarked through
Kenexa’s WorkTrendsTM with employees
around the world
Globally
9 By Country
CEBC Ethics Themes:
U.S.
9 Senior management practices ethical
conduct
9 Company serves interest of multiple
stakeholders
9 Co-workers behavior consistent with
values
9 Able to discuss ethical
issues/concerns
9 Must demonstrate company values to
get ahead
9 Multi year trends
9 By Industry
9 By Job Type
9 Correlated to business
performance and employee
engagement indicators
37
U.S. Integrity/Ethics Trends
2005
80
70
60
59
2008
67
66
61
2007
60
63
59
58
53
53
50
52
51
50
43
37
40
30
20
10
0
Multiple
stakeholders
Sr. mgmt
supports ethics
Source: Kenexa WorkTrends™ 2008
38
Coworkers
live values
Ethics
discussed freely
Must live values
to advance
Note: values represent percent favorable
19
CEBC Integrity QuickCheck™
U.S. Job Type
> 5 points
above norm
Executive/senior manager
75
Manager
67
Supervisor
±5
points
of norm
63
Professional
62
Technical
62
Clerical
61
Sales
60
Service
> 5 points
below norm
54
Laborers
54
Operators
53
Skilled trades
39
51
The 1st Element
Laying the Foundation
Data Illustration:
The behavior of the people I work with is
consistent with my company’s mission,
vision and values.
Executive
Manager
Frontline
75%
63%
57%
Source: Gantz Wiley Research WorkTrends 2008
40
20
The 2nd Element
Effective Leadership
Data Illustration:
My senior management supports and
practices high standards of ethical
conduct.
Executive
Manager
Frontline
78%
73%
68%
41
The 2nd Element
Effective Leadership
Data Illustration:
Where I work, ethical issues and concerns
can be discussed without negative
consequences.
Executive
Manager
Frontline
77%
72%
62%
42
21
The 3rd Element
Balancing Stakeholder Interests
Data Illustration:
My company strives to serve the interests
of multiple stakeholders not just the
shareholders (financial performance).
Executive
Manager
Frontline
77%
72%
65%
43
The 4th Element
Process Integrity
Data Illustration:
Where I work, people do not “get ahead”
unless their behavior clearly demonstrates
my company’s values.
Executive
Manager
Frontline
67%
57%
50%
44
22
Impact of Ethics
U.S. Employees
Strong Ethical Culture
100
93
92
Weak Ethical Culture
92
92
90
90
83
80
70
60
50
40
30
16
20
14
15
14
10
8
10
0
Pride
Overall
satisfaction
Advocacy
Retention
Reputation
improvement
Performance
improvement
Note: values represent percent favorable
45
Questions?
46
23
For Information on CEBC
Phone the Center:
651-962-4120
Fax the Center:
651-962-4042
Email the Center:
[email protected]
Visit the Web:
www.cebcglobal.org
Write the Center:
1000 LaSalle Avenue, TMH 331
Minneapolis MN 55403-2005
USA
®
®
48
24

Reaping What You Sow - Center for Farm Financial Management

Transcription

Similar documents

Peter J. Crosa ETHICS

Peter J. Crosa ETHICS

Summary - Institute of Business Ethics

fantome windjammer

School Social Work National Model Brochure

Presentation English Dortmund 2014

Lukman Hakim

PowerPoint - SHRM

Bridging the GAP

Napp Code of Ethics