Why leaders should have ethical behaviour

1. 2. 3. It reduces pressure on employees to compromise ethical standards. It increases employees willingness to report misconduct. It improves trust and respect at all levels.

4.
5. 6. 7. 8. 9.

It protects the positive reputation of the organization.

It encourages early detection of problem areas and ethics violations. It fosters a positive work culture and improved customer service. It provides an incentive and framework for ethical decision making. It increases pride, professionalism, and productivity. It enhances your ability to attract and retain high-quality and diverse employees.

10. It helps ensure the long-term viability of the enterprise.

Bonus Reason,
11. Its purely and simply the right thing to do!

An Example

Enron established good values but

WALK THE TALK

they just didnt

Rights of Business Partners

Fairness and ethical behaviour transactions and dealings Respect and courtesy

in

all

business

Transparency in sharing of information

Commitment to shared growth based on long-term goals and performance

Contractual rights Empowerment to voice genuine concerns based on verifiable evidence

Benefits of Managing Ethics as a Program

There are numerous benefits in formally managing ethics as a program, rather than as a one-shot effort when it appears to be needed. Ethics programs: Establish organizational roles to manage ethics Schedule ongoing assessment of ethics requirements Establish required operating values and behaviors Align organizational behaviors with operating values Develop awareness and sensitivity to ethical issues Integrate ethical guidelines to decision making Structure mechanisms to resolving ethical dilemmas Facilitate ongoing evaluation and updates to the program Help convince employees that attention to ethics is not just a kneejerk reaction done to get out of trouble or improve public image

Guidelines for Managing Ethics in the Workplace

The following guidelines ensure the ethics management program is

operated in a meaningful fashion: Recognize that managing ethics is a process. The bottom line of an ethics program is accomplishing preferred behaviors in the workplace. The best way to handle ethical dilemmas is to avoid their occurrence in the first place Make ethics decisions in groups, and make decisions public, as appropriate Integrate ethics management with other management practices. Use cross-functional teams when developing and implementing the ethics management program. Value forgiveness. Note that trying to operate ethically and making a few mistakes is better than not trying at all.

MYTHS ABOUT BUSINESS ETHICS

Ethic is a personal, individual affair not a public or debatable matter. Business and ethics do not mix. Ethics in business is relative.

Good business means good ethics.

Information and computing are immoral.

INCULCATION OF ETHICS AMONG EMPLOYEES

Provide people with rationales, ideas and vocabulary to help them participate effectively in ethical decision - making processes. Help people make sense of the environments by abstracting and selecting ethical priorities. Provide intellectual weapons to do the battle with advocates of economic fundamentalism and those who violate ethical standards. Enable employees to act as alarm systems for company practices that will not meet societys ethical standards. Enhance conscientiousness and sensitivity to moral issues and commitment to finding moral solutions. Enhance moral reflectiveness and strengthen moral courage. Increase peoples ability to become morally autonomous ethical dissenters and the conscience of a group. Improve the moral climate of firms by providing ethical concepts and tools for creating ethical codes and social audits..

SETTING THE SIGNPOSTS

PEOPLE AWARENESS AND INVOLVEMENT REINFORCEMENT AND COMMUNICATION SENIOR MANAGEMENT COMMITMENT POLICY ALIGNMENT CONCERNS AND EMPOWERMENT ETHICAL RESPONSIBILITY & GOVERNANCE

SIX TENETS OF ETHICAL RESPONSIBILITY 1. Use every forum at your disposal to communicate Tata values and
lead from the front. Encourage your next levels to do the same down the line. 2. Ensure that policies and practices are aligned with Code of Conduct in Letter and spirit. In case of doubt, seek clarifications from superiors or Ethics Counselor. 3. Address without retribution any concern brought to your notice. In case of any possible or actual violation of Code of Conduct, deal with it firmly and consistently to send right signals. 4. Discourage any relationship or placement, which may, directly or indirectly lead to a conflict of interest . Ensure full disclosure if any such relation exists or arises. 5. Promote transparency and accountability at all levels in your operations through positive examples, inducements and deterrent action as necessary. 6. Avoid giving any impression, which might be seen by a third party as seeking undue privilege by virtue of position. Be a role model to other

Six Cornerstones
1 Train, communicate and reinforce encourage ethics driven work culture Demonstrate Senior Management commitment 2

lead from the front

Share values with partners / community members build trust for mutual growth Empower voice of stakeholders resolve genuine concerns Promote Ethical Corporate Governance

Objectives of MBE Program

3 4

align policies and practices Measure Effectiveness is MBE program working?

VALUE CREATORS
Leadership with trust Respect for others Proactive thinking and positive attitude Confidence, courage and character. Initiative and openness. Commitment to consumers. Social conscience. Discipline, integrity and pride in work.

VALUE DESTROYERS
Anger, envy and grudge. Frustration, cynicism and despondency. Arrogance, split behavior and idleness. Greed, guilt and bias. Complacency, indifference and diplomacy. Intolerance, uncertainty and closed mindset.

How HR Managers in global business can help their firms to be successful and minimise ethical conflict Know and comply with local laws and regime related to finance tax and employment Be sympathetic to local customers Be aware to global pressure group that are relevant to their industry Maintain and accommodate diversity within the company through work practice Management System, Employees benefits & PMS

Practical steps that HR Manager can take up to tackle the ethical risks
Take conscious responsibility for the flow of information and data in & out of organization Understand legal responsibilities and liabilities Monitor use of both electronic and manual method of concern resolution mechanism Communication involvement & empowerment on discussions of the issues and the mode of encourages feedback Undertake reputation studies to undertake how is brand is perceived Active manage stakeholders relations monitoring expectations & performance levels

Account for the non-financing performance of organization and reporting mechanism

Develop & implement policies for CSR or corporate citizenship

Concern Resolution
A structured process is in place for dealing with concerns raised
Concern received in Ethics Office by

Mail

Internet / Intranet

Phone

Personal Interview

Unknown

Source

Known (Whistleblower) Discuss protection issues (if any)

Concern (with apparent merit) registered under relevant clause of TCoC for further action

Concern (without substance/evidence) recorded, rejected and closed

Concern directed to appropriate agency for investigation/response

CLOSE

Concern Resolution (contd)

Internal Audit Human Resources

Security

Concerned Divisional Heads

Follow-up concerns not responded within 30 days

Review investigation report/response

Recommend action including system improvement to divisional heads

Action Requir ed

Summary of action to whistleblower

Follow up action taken

CLOSE

How to develop Ethical Culture Execute leadership attention to ethics Perculating down the line leadership & individual & ethics Fair & transparent approach & treatment Openness about values & ethical aspect

Ethics and values integrated into organization decision making

Ethical behaviour rewards Unethical behaviour punished Unquestioning obedience and authority Is organization focused on stakeholder interest