Reputation is consistently ranked as a top concern among business leaders. The 2008 Edelman Trust Barometer revealed that 90% of respondents believe that a company's overall
reputation is an important factor in building trust. A January 2008 Wall Street Journal headline cautioned, "As Economy Slows, Reputation Takes On Added Meaning."
But, considering the importance of reputation, why does it have such a nebulous definition? More important, if reputation ranks so highly as a business concern, why does its
kissing cousin--ethics--slide to the bottom of organizations' priority list?
Communications executives are widely accepted to be the protectors of reputation, be it through their work in crisis management, branding, media relations and corporate social
responsibility. "We are an industry that keeps talking about reputation management. We sell reputation management," says Ann Higgins, president of Utopia Communications. "It's
easy to say we care about reputation, but what does that mean? We complain about being called flacks, and yet we're not cleaning our own house."
She makes this comment in reference to the results of the PR News/Counselors Academy Ethics survey, in which respondents' answers revealed a number of stark
inconsistencies in the way their organizations approach reputation in relation to ethics. For example (for more results, see page 2):
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When asked how their organizations measure reputation among various stakeholders with regard to ethical performance, 49% claimed to review press clippings. Only 27%
conduct formal research on a period basis, and 20% don't measure this at all. "The fact that we're still reviewing press mentions to measure reputation is a huge concern," Higgins
says, suggesting that this approach is far too primitive and doesn't do justice to the importance of ethics relative to reputation.
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87% of respondents' organizations have a written ethical code of conduct, and 100% of these executives require that employees review the code and formally acknowledge that
they have done so. However, while these numbers seem encouraging, Higgins points to other research that suggests "that just telling people [to read] a code of conduct isn't
enough. They need practical training on how to incorporate that into their day-to-day work." [For tips on how to do so, see page 6.] Only 58% of respondents have formal ethics or
compliance training for employees.
These statistics barely scrape the surface of the dangers of haphazard ethics policies and compliance training, especially considering the seemingly natural link between formal
codes of ethics and strong reputations. To really drill down into improving ethics training internally and reaping external rewards accordingly, consider these best practices.
*Make it official. Only 42% of the PR News/Counselors Academy survey respondents have designated ethics officers within their organization--a troubling reality
considering the challenges this immediately creates from the get-go. After all, how can ethics training and compliance be executed and enforced if no one takes the lead? Grant the
position to someone who is already on your staff if you don't have the budget to create a completely separate ethics position. "It can be assigned to someone within the agency or
corporation," Higgins says. "It just has to be clearly communicated to the entire team that this person [is in charge], and that the position is taken seriously."
This officer must integrate the code of ethics into all employee communications. "The real benefit of a well- thought-out code of ethics is it removes a great deal of ambiguity
among employees and establishes a clear overall framework for living out the organization's values," says Elise Mitchell, president and CEO of Michell Communications Group. "If
communicated effectively, the code should also help employees make better day-to-day decisions and avoid mistakes that can happen when they are forced to use their own
judgment."
*Be careful what you wish for. Reporting directly to the CEO is usually considered to be a grandiose accomplishment among communications professionals, many of whom have long
struggled to be thought of as strategic advisers. The majority of survey respondents (75%) whose organizations do have designated ethics officers say that said officers report
straight to the top. But is this a good thing?
When it comes to ethics and reporting structures, managers should consider a different approach, as going straight to the CEO may discourage many employees from being
forthcoming. Once you have designated the ethics officer role to someone, create a structure in which all ethical violations are not communicated directly to the CEO.
"If you look at the headlines about [former White House press secretary] Scott McClellan's new book [What Happened: Inside the Bush White House and Washington's Culture of
Deception], you will understand why people don't [want to report] ethical violations directly to the CEO," Higgins says, referring to McClellan's admission that the Bush
administration operated like a tight-knit inner circle that repeatedly deceived him and encouraged him to lie.
"If the CEO is creating the organization's culture and it is a 'bubble culture,' then [asking people to report ethical violations directly to that CEO] doesn't do you much
good, does it?"
(For suggestions on how to configure the reporting of ethics violations, see sidebar.)
*Recalculate your thinking. As Higgins previously stated, having employees skim the organization's code of ethics isn't enough, as this doesn't guarantee that they will know
how to apply that information in the event of a violation. Thus, training is essential, but many organizations--42%, based on the PR News/Counselors survey findings--don't
have a formal program in place. Of these 42%, the most common reason for skipping ethics and compliance training is a lack of budgeting, which, by Higgins' standards, is a gross
miscalculation.
"Agencies say they don't have the budget for [ethics training], but they do have the budget for off-site retreats, or for sessions on how to write press releases," she says.
"We are the guardians of our clients' reputations, but we don't have the budget to teach [our employees] how to do that? It's a sad state of affairs."
How, then, do you justify training budgets to senior management? Just crunch some numbers. The U.S. Sentencing Commission recently revised the federal sentencing guidelines.
Now, if an organization gets in trouble for a breach of ethics, attorneys can bring forth a code of ethics, and a judge could mitigate fines by up to 85%. (Take the 2003 scandal
in which Fleishman-Hillard's Los Angeles office was charged with overbilling its client, the Los Angeles Department of Water and Power: The agency had to pay millions in damages,
but might have paid less had its attorneys brought in a standing code of ethics.)
"If you look at budget and ROI and you're not doing ethics training, you're not living up to your fiduciary duties," Higgins says. "Not having the budget isn't a good argument
anymore."
*Spin the training wheels. So, now that the argument for an ethics training budget has been made, it's time to get the program up and running. Here are a few must-have elements
in any effort:
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100% involvement: Every employee, from the CEO to the receptionist, must be involved in training. Break the staff into groups, and make sure these groups contain a
mixture of senior and junior people. This will incorporate different perspectives and approaches to decision making.
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Wash, rinse, repeat. One-time training is pointless, as laws are constantly changing. All codes of ethics must be updated to acknowledge these changes, and training
programs should follow suit.
The moral of the story is that communications executives--and businesspeople as a whole--don't give ethics training and compliance the attention they deserve, especially in an
environment in which reputation is so important.
"If [PR people] want to be trusted advisers, why are we still focusing on tactics?" Higgins says. "We need to be proactive."
CONTACTS:
Ann Higgins, [email protected]; Elise Mitchell, [email protected]
PR News/Counselors Academy Ethics Survey Results
1. How does your organization measure its reputation among its various publics with regards to its ethical performance (select all that apply)?
Review positive/negative press mentions 48.9%
Conduct formal research on a periodic basis 26.7%
Don't measure reputation 20.0%
Hybrid approach 2.2%
Don't know 2.2%
2. Does your organization have a designated ethics officer?
No 57.9%
Yes 42.1%
3. Does your organization have an ethical code of conduct in writing?
Yes (proceed to questions 3a and 3b) 87.2%
No (proceed to question 4) 12.8%
3a. Do you require all employees to review the code and acknowledge that they have done so?
Yes 100%
No 0%
3b. How often is the code updated?
At least annually 55.9%
Every few years 32.4%
Rarely 11.8%
4. Does your organization have a process in place for reporting ethical concerns or violations?
Yes (proceed to questions 4a--4d) 71.8%
No (proceed to question 5) 28.2%
4a. Is the reporting anonymous?
Yes 76.7%
No 28.2%
4b. Is the reporting confidential?
Yes 96.7%
No 3.3%
4c. Does your organization have a non-retaliation policy for reporting ethical concerns?
Yes 96.4%
No 3.6%
4d. Does your organization keep a record of ethics concerns and violations?
Yes 92.9%
No 7.1%
5. Does your organization have formal ethics or compliance training?
Yes (proceed to questions 5a--5c) 57.9%
No (proceed to question 6) 42.1%
5a. Is the training mandatory for all employees?
Yes 84%
No 12%
No response 4%
5b. How long is the typical training session?
1-3 hours 54.2%
Less than one hour 37.5%
No response 4.2%
Longer than three hours 4.2%
5c. Do you employ an outside consultant for the training sessions?
No 73.9%
Yes 21.7%
No response 4.3%
6. What type of organization do you work for?
Agency 54.5%
Corporation 33.3%
Nonprofit 12.1%
Reporting Ethics Violations
If you want to develop a system for reporting ethics violations that encourages employees to be open, consider these options:
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A 1-800 number: Ketchum has a 1-800 number that employees can call to report ethics violations anonymously and without the fear of being "outed."
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An internal ethics committee: Ruder Finn takes this approach, in which its ethics officer, Emmanuel Tchividjian, acts as a trusted liaison between employees and the
internal committee, which ultimately decides on a course of action.
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An outside board of advisers: This is a good option for smaller organizations, as it doesn't necessarily cost money. If you have a network of professional contacts who are
willing and able to participate, they can be called upon in the event of a violation. That they are non-employees and therefore objective adds credibility.
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Digital platforms: Set up anonymous e-mail systems, wikis or intranets through which employees can report a violation or lodge a complaint.