Many companies are looking to breathe more life into their staid and dusty codes of conduct.
Not too long ago, many company’s codes of conduct read like a “thesaurus,” running for pages and filled with complex words, says Diane Brown, vice president and head of operations for advisory services at NAVEX Global. Little consideration was given to how often employees actually used them. “They were the book end on the book shelf,” she says.
Perhaps that was to be expected. Many early codes were written from a legal perspective in response to the Federal Sentencing Guidelines, which urged companies to promote a culture that encourages ethical conduct and a commitment to compliance with the law.
Although the Guidelines don’t require a code of conduct, its wording “has been widely understood to mean establishing a code of conduct and related compliance program policies and procedures,” says Timothy Hedley, partner in KPMG’s forensic services and global leader for the firm’s fraud risk management service network.
Today, however, companies are no longer viewing codes of conduct as a protective legal document and they want employees to actually use them. As Brown points out, employees now can go outside their organizations and report misconduct to regulatory authorities. Social media can turn even inadvertent mis-steps into sinister-seeming affairs that harm organizations’ reputations. “You want to create user-friendly tools,” she says.
Thoughtful, engaging, well-written codes can also communicate just what organizations stand for, says Jay Thomas, creative director with The Network, a governance and compliance solutions provider. “A code of conduct is a tangible expression of your intention to operate with ethics and integrity.”
Start With the Purpose
Before hammering out their codes of conduct, organizations need to assess the risks they face, Brown says. “Evaluate the risks and make sure the code represents the priority risks.”
Another important step to getting starting on a revised, more meaningful code is careful consideration of the code’s purpose. “Your goal should be a compliance program that actually works versus one that looks good on paper,” says Ted Banks, partner at law firm Scharf Banks Marmor and president of Compliance and Compensation Consultants.
“Codes should invite readership while at the same time providing guidance on key laws, regulations, and company standards, and provide a means for employees to seek advice and report misconduct.”
Timothy Hedley, Partner, KPMG
Compliance advisers also urge companies to embrace brevity when crafting the code. Creating a beautiful 50- or 75-page book that attempts to cover all the ethically questionable situations every employee in an organization may face can mean few actually read the document, Banks says. For instance, it’s unlikely a marketing assistant for an office in Cleveland will have to contend with a foreign bribery situation. Including pages of irrelevant information can prompt employees to tune out everything—including the sections they should be reading, he says.
Codes “should invite readership while at the same time providing guidance on key laws, regulations, and company standards, and provide a means for employees to seek advice and report misconduct,” Hedley says.
One way to keep the code manageable is to focus on the principles the organization wants to guide employees’ behavior, while also providing a way for employees to obtain more information when they need to. That might be via a link employees can click, or a toll-free number they can call. “A code should be fairly short and easily understandable by everyone, but provide a path for getting more information,” Banks says.
In addition to making the code more relevant, this reflects the way in which many employees access information today, Brown says. “It’s how we all operate now,” initially looking for high-level information, such as topic overviews, then linking to more details as needed.
Going Beyond Paper
More companies are putting their codes of conduct online and also adding more multi-media aspects to bring them to life. The use of short videos, for example, can add vibrancy and clarity to some of the more important or complex ethical topics, Brown adds. When they feature an executive from the organization, they also can be tangible indications of the priority the company places on ethics and compliance. This could be in the form of a “man in the street” interview, in which the executives outline the steps employees should take if they’re facing situations that seem ethically questionable.
Brown has seen companies include other sorts of tools. One example was a crossword puzzle in which the clues were tied to the code. While this tactic might not be effective within every organization, in this case, it generated some of the highest participation rates for compliance-focused communication vehicles, she adds.
A BEST PRACTICES APPROACH
Below, The Network illustrates some best practices for the creation, implementation, and delivery of a code of conduct.
The Code should contain a message from leadership, an introduction regarding the purpose of the Code and employees’ responsibilities under it, and the company’s core values and principles. The key guidelines in the Code should address all issues relevant to your business and be organized by high-level topics or behaviors, rather than laws. The Code should also provide information regarding additional resources and where employees can go with a question or concern.
Readability & Usefulness
The document should be written in plain language that speaks to employees in a way that will resonate with them and in a tone that complements your organizational culture and employee demographics.
Level of Engagement
High-impact designs deliver. Call-outs that feature high-level information, pull-quotes for added emphasis, company-specific questions and answers, and other eye-catching design elements draw employee attention to key points and dramatically increase usability and retention. Seamless compliance to your corporate branding standards makes your Code uniquely your own.
Your print-version Code must also be available as an interactive online version with one-click links to more detailed company policies, reporting tools and contact information. Easy online navigation from your corporate intranet gives your employees instant access to your Code and the information they need for ethical decision making.
Keep in mind that local laws and cultures may vary in some of your operations. Think about whether what you have written will be interpreted correctly and understood as you intended for it to be. Additional explanation may be necessary for guidance that may be inconsistent with practices of the local culture. Tailor your Code to reflect country-specific information, legislation and regulations, when necessary. The Code should be provided in as many languages as your employees speak as their first language. Utilize proven, comprehensive translation services to ensure sensitivity to any cultural nuances.
Certification tracking offers an added layer of due diligence, allowing you to verify receipt and review of the Code by every employee. Track compliance for each employee, and send reminder notifications to ensure compliance. Key requirements, such as Code certification and training should be mandatory, but remember that if you say something is mandatory, you must be prepared to follow through on that requirement, even when it hurts.
Bringing Your Code to Life
Training is an integral part of a comprehensive Code of Conduct program. If your employees aren’t aware of your Code, if they don’t understand it and live it, how can they be expected to uphold its principles and policies? Look for training that offers high-impact, interactive exercises that fully immerse employees in the training experience and provides real world examples that help employees apply the Code in their day-to-day work.
Source: The Network.
Another benefit of many interactive and online tools is their ability to provide user data, Thomas says. Compliance professionals can track such statistics as the number of employees reading the code and the views per page.
Creating a Partnership
Developing a code of conduct that’s engaging as well as substantive and accurate usually requires a partnership between employees with expertise in compliance, legal, communication, and education. “You want to present information so it’s interesting to the average employee, not a lawyer or compliance geek,” Banks says.
That requires writing in a style that’s accessible and an “authentic expression of company’s expectations and commitment,” Thomas adds. Employees are likely to dismiss any code that seems at odds with their day-to-day environment on the job. That can be the case if the document includes language that’s not used anywhere except within the code, he says.
The code should be written at a level most employees will comprehend, Thomas says. That typically means a high school reading level. It’s not always an easy goal to meet, as just the word “compliance” can bump up the reading level. To employees who aren’t immersed in the topic, the concepts can appear a bit foreign, at least at first. Again, engaging experts in communication and adult learning can help in conveying these messages in ways the majority of employees can easily grasp.
Along with the text, an engaging, attractive design can boost a code’s appeal and resonance. It’s one aspect, however, that many organizations don’t give proper attention. “Some companies forget the design piece, because they’re just so happy to have crossed the finish line,” in terms of actually writing the code, Brown says. But the design can be critical in garnering an initial positive reception from employees.
Feedback and Dissemination
Once a code is drafted, the job isn’t done. Leading companies gather feedback from employees and use what they learn to revise the code. Asking a cross-section of employees for reaction while the code is under development can provide a roadmap to the areas in which improvement is needed. “Listen to employees,” Brown says. “They’re the ones you want familiar with the document.”
Equally important is making sure mid-level managers have a strong understanding of the importance of the code, Brown says. “They’re your first line of defense.” They need to be able to identify behavior that might go against the code, and also know how to find additional information or whom to contact with questions. Effectively conveying this information can require live training or a train-the-trainer approach. These sessions also can show all employees how the compliance initiatives reach into every level of the organization, she adds.
When it comes to disseminating a code of conduct, Banks suggests organizations send employees the code, along with notices that in a reasonable amount of time—maybe ten days or two weeks—they’ll follow with a quiz that covers the high points. Only after they’ve passed this will employees be able to certify their understanding of the code and their willingness to abide by it. Also at this time, they’ll be provided an opportunity to disclose any potential conflicts of interest. “Repeat annually for all employees,” Banks says.
The goal is to create sustained commitment to the code of conduct so it drives behavior and attitudes based on integrity, ethics, and fairness. “You want to connect the code to the higher aspirations of the company,” Thomas says.