Your Public Relations and Communications Community

An Ethics Month special: Measuring the impact of company ethics statements


August 31, 2012

In early June, members of PRSA's Board of Ethics and Professional Standards (BEPs) participated in a roundtable discussion via phone. What follows is an edited version of this conversation centering on the question, "How meaningful are corporate and organizational ethics statements?"

Deb Silverman, Ph.D.,  APR: Ethics Month is the perfect time to reflect on the problems that concern all of us, especially when it comes to corporate expressions of ethical values.

Nancy Syzdek,  APR: Corporate codes of ethics and standard practice are only as good as the people who follow them.
If you have a corporate leadership who stands behind its Code of Ethics and is committed to following those rules, then you’ll have an ethical company. Problems come from having corporate leadership that is only interested in the appearance, and not necessarily the practice, of ethics.
 
Nance Larsen,  APR, Fellow PRSA: Achieving ethical relationships requires direct and frank dialogue between the PR practitioner and senior leadership. Much of this relates to the practitioner’s place at the table, building that relationship of trust and taking on that advisory role.

The commitment has to start at the top, with ethical business practices being an integral part of the corporate DNA.

Pat Whalen, Ph.D,  APR:  There are going to be times that well-intentioned things will go wrong, even when you think you’re following the rules.
If you operate within an ethical culture with ethical leadership, and you have transparency and disclosure, then you’ll be able to sustain yourself through a crisis because you’ll have built that relationship with your stakeholders.

Francis McDonald, Ph.D.,  APR: This puts the communications officer in a difficult position when they know there is an ethical violation. It’s risky — consequences may result in a change in a company’s policies or cost communications officers their jobs.

Jim Lukaszewski,  ABC, APR, Fellow PRSA: There’s a study every two years by the Ethics Resource Center, based in Washington, D.C.  Their latest study talked about the fact that with more than 138 million Americans in the workforce over 18, 45 percent of  U.S. workers, observed misconduct. Sixty-five percent of those who witnessed wrongdoing reported this conduct. Of those who reported, 22 percent said that they experienced retaliation — almost nine million Americans retaliated against because they reported something unethical.  This may be stressful for the PR person, but it is more so for employees.

Mary Graybill,  APR, Fellow PRSA: Depending on the size of the company and reach of its operations, public relations may not know about the unethical practices.

Public relations often relies on managers, department heads and top executives for information about what the company and its divisions are doing and how they’re doing it.

 When they find out about unethical behaviors, fear of retaliation may leave the PR representative with limited options.  They can find another job, leave the company without a safety net, or say nothing.

Whistle-blower laws don’t always protect those who try to do the right thing or put ethics ahead of financial security.

McDonald: Are the trends showing that there are more people reporting unethical behavior, or more people suffering negative consequences? It would appear that PR professionals are in awkward situations. What is their position when unethical behavior is revealed? Their decision could determine whether or not they keep their jobs.

____________

McDonald: Education is important because our members are going to be facing some of these ethical questions. Would they know how to distinguish between what’s an ethical issue or not?

Graybill: An action may be unethical but still legal. Laws and ethics are different.

Syzdek: In the corporate environment, PR professionals should be advising leadership to go beyond the law.  Acting in the ethical spirit requires more than checking the box and doing the bare minimum. Making the choice to embrace transparency requires a strong relationship between a PR practitioner and senior leadership.

Whalen: One of the issues is conflict in the corporate boardroom. Some corporate executives that the PR person is debating are rewarded for increasing profits and share price.

So when the PR person suggests that some behavior ought to be stopped, [the executive is] immediately going to see the PR person as the obstacle to their goals. One of the smartest things that a PR counselor can do is show those corporate executives what the cost of unethical behavior is and how that unethical behavior will hurt their profit or share price.

McDonald: Is violating ethical principles worth paying the penalty, which pales in comparison to the profits that can be made?

Whalen: There is always going to be someone on the corporate side who is going to say, “Well, acting unethically may get us more money.”  We rarely use those words, but that’s what is implied.  A smart PR practitioner keeps track of all the crises that have occurred due to ethical lapses and the cost.

People may believe that acting unethically in the short term may boost profits, but in the long run, it’s going to hurt them, their reputation and likely their bottom line.  
 
Emmanuel Tchividjian: The concept that fines are just the cost of doing business is fading because the laws are changing.  The government is going after CEOs to put them in jail.  The CEO will no longer be able to claim ignorance or blame an error on the CFO. He has to sign a document that certifies that he has seen the numbers and agrees with them.

Tom Duke,  APR, Fellow PRSA: That’s a step in the right direction. Although PR professionals can act as advisors and counselors, it’s the CEO and board who have bottom-line responsibility. Many boards are removed from the daily operation of companies and need to take a larger part in  advisory roles.

Lukaszewski: The first three casualties in corporations that fail to perform ethically under these federal laws are the CEO, CFO and general counsel.

I’m starting to work with an organization called the Society for Corporate Compliance and Ethics (SCCE).  They did a survey in January to assess the stress level among compliance officers in American businesses. Fifty-eight percent said they wake up with stress every morning. Sixty percent said they are considering leaving their job and profession. Fifty-eight percent agreed they worked in an adversarial environment and felt isolated.

There is a sense of being on the firing line every single day when it comes to helping companies comply with rules and regulations.

Whalen: One of the challenges is that the majority of compliance officers are lawyers, and that is a difficult role for them. Lawyers’ jobs are to help the organization act legally and stay within the law.  Typically, they’re not trained to worry about whether or not it’s ethical, as long as it is legal.

Lukaszewski: The most powerful reason that these compliance officers’ worry goes unspoken is that nobody hears them.  They say things that matter, and important people nod and say, “thank you,” yet they go on doing what they were going to do anyway.  This is what’s driving these people crazy.

Whalen: We have to make sure people [understand] that organizations can be profitable and ethical at the same time. If people are operating under the assumption that the two can’t coexist, then we have to disabuse them of that idea.

____________

Lauren K. Gray: With the job market looming over college students, some graduating students feel they should accept any job after college.
While being hired is important, it is still important to do your research on the company.

Most companies have corporate policies, a work-ethic statement, mission statements or sets of values they align themselves with. Before you start working for a company, make sure the values align with your own. Research the history and learn as much about the company as you can. If you cannot find a lot online, it is always OK to ask.

Duke: Operating ethically should be a corporate standard on the same level as operating profitably.  They should be able to coexist. Profitability has been a short-term objective for most companies. Operating ethically is more long-term — a perception that will sustain a company into the future.

Graybill: One of the barriers we face is that capable PR professionals who can recognize ethical vs. unethical behavior may not know how to address unethical acts when they see them.

Accountants, financial analysts, lawyers, MBAs and mortgage brokers need ethics training, too. 

Lukaszewski: There is some confusion about applying ethical practices to business and economic decisions.

Visit a business school and watch what they teach. It’s almost an amoral environment. It’s about how much you make and how you effectively compete. It’s about concepts that lead to accumulating personal wealth, and being profitable by leaving aside anything that can’t be objectively measured.

____________

Duke: On an international level, there are countries and societies that have different views about what is ethical in the business arena and what is not. Bribery and payoffs are standard practices in some other countries.

When we are doing business internationally, should we play the same game as these countries?

McDonald: This [is] something to think about: the distinction between a company’s ethics and its ability to make a profit.  This is going to be a challenge, especially when people are faced with these issues more.

Lukaszewski: Ethics is taught superficially in business schools.  A couple of years ago, a group of Harvard Business School students got together and published a book — an ethics manifesto. They wanted MBA students to sign a pledge to be ethical managers of business; however, they couldn’t get many of their own class to sign. It’s a tough issue. Business schools treat teaching executive communications the way they teach ethics — sparingly.

Silverman: The MBA initiative at PRSA studied ethics in the business curriculum, and the percentage of schools that were offering ethics courses in their MBA programs was low.

The number of PR courses in the MBA programs also was low and [there was] nothing pertaining to PR ethics in the MBA curriculum.  That’s in sharp contrast to the centrality of ethics in PR programs.

I’m doing a study now with another professor on the role of ethics in PR programs in the United States.  We have found that virtually all have an ethics course or unit in the PR curriculum. It’s generally embedded in all PR courses, so the students will encounter ethics material at different points in their academic career.

Lukaszewski: There has to be a connection in teaching ethics in PR programs, and at the same time teaching students how to establish their credentials, credibility and stature to gain the access and influence they must have to impact business decisions.

____________

Lukaszewski: One activity area of business that’s become sophisticated is corporate social responsibility.

Companies count these activities as a kind of supplemental self-validation of their behavior and integrity. Many produce annual or biennial CSR reports. It’s become a staple of corporate PR activity. It is hoped that these “good deeds” will offset harm or damage done, or at least buffer the reputational damage that might occur.

Whalen: We have to be careful here — especially when we’re talking about social responsibility — because there are lawsuits from shareholders who say it’s not the corporation’s business to be giving corporate funds away to various charitable causes.  The courts have ruled in favor of the programs because the company also benefits, but this raises an ethical question for some.

Duke: The general public overwhelmingly believes that companies should sponsor CSR programs to better their communities. Companies are a vital part of the various communities in which they operate, and a corporate citizen of not only the United States, but also the world.
Companies who have green programs, scholarships for the disadvantaged, adopted schools, employee volunteer programs and other initiatives benefit from these, but so does the nation. Many companies do this in a spirit of commonwealth.

McDonald: Even so, we have our work cut out for us.  There are business practices or decisions where some don’t consider the ethical aspects — even something as simple as calling in sick when that is not the case.

Lukaszewski: There’s a book called, “The Honest  Truth About Dishonesty: How  We Lie to Everyone — Especially Ourselves” by Dan Ariely.
[He says] we are becoming a society where many feel entitled to game the system, cut corners and ignore rules. Studies by ethics experts demonstrate that seemingly inconsequential predicate actions can lead to more serious behaviors — if not by these individuals, by others mimicking those who act dishonestly.

Silverman: Living up to corporate or organizational ethics statements and intentions is challenging. PR education is working to address some of these issues. One of the most promising developments is that PRSA has spearheaded the rollout of MBA-level reputation management courses at five best-in-class universities.

This pilot program is a key achievement as PRSA works to educate future CEOs and business leaders on the strategic value of public relations — part of a larger effort to promote the Business Case for Public Relations. We seek to achieve more meaningful corporate ethics statements, and more ethical corporate behavior and leadership.

Clearly, there is a long way to go. Perhaps our discussion will inspire even more intensive efforts in sectors where our colleagues practice.
 

The following BEPS members participated in this discussion:

  • Tom Duke, APR, Fellow PRSA, Ohio
  • Lauren K. Gray, President of PRSSA, North Carolina
  • Mary Graybill, APR, Fellow PRSA, California
  • Nance Larsen, APR, Fellow PRSA, Alaska
  • James E. Lukaszewski, ABC, APR, Fellow PRSA, Minnesota
  • Francis C. McDonald, Ph.D., APR, Virginia
  • Deborah A. Silverman, Ph.D., APR, New York
  • Nancy C. Syzdek, APR, Nevada
  • Emmanuel Tchividjian, Ex-Officio, New York
  • Patricia T. Whalen, Ph.D., APR, Florida

 



Comments

No comments have been submitted yet.

Post a Comment

Editor’s Note: Please limit your comments to the specific post. We reserve the right to omit any response that is not related to the article or that may be considered objectionable.

Name:
Email:
Comment:
Validation:

To help us ensure that you are a real human, please type the total number of circles that appear in the following images in the box below.

(image of five circles) + (image of eight circles) =

 

Training Webinars Included With PRSA Membership!

Broaden your skill set with access to more than 50 live and on-demand webinars in 2014.