How to hone managerial ethics in employee relations

Have you ever wondered what workplace ethics is all about? Does it sound like a lofty topic that’s reserved for law, medical and business school students, or does it play a critical role in your daily life as a senior or operational leader in your organization? If you guessed the latter, you would be correct. Far from lofty theories or moral judgments about what you should or shouldn’t do in a particular situation, workplace ethics is very practical and covers a large swath of topics that impact your daily decisions more than you may know.

First, a definition. Ethics are the values and principles that shape the workplace, the total of an organization’s beliefs, motivators and moral guidelines in action. Ethics embrace questions such as “can I do this?” versus “should I do this?” In short, workplace ethics is what happens when nobody else is looking. The key, of course, lies in ensuring that management teams and individual contributors across the enterprise are aligned in the practice of healthy workplace ethics and morals in their decision making and behaviors.

The Sarbanes-Oxley Act ushers in workplace ethics

Ethics teach us how to live our lives and conduct our businesses morally and ethically, but these standards change over time. When it comes to corporate America’s business-reporting landscape, however, an attempt to codify workplace ethics became real and concrete in 2002. Specifically, when the Sarbanes-Oxley Act, or SOX, was passed, it stated that publicly traded companies were highly encouraged to publish corporate ethics statements in the forms of “codes of conduct” that confirmed their obligations to report accounting irregularities or conflicts of interest that could negatively impact their financial statements.

Further, SOX stipulated that CEOs and CFOs who knowingly misrepresented their (publicly traded) company’s financials in quarterly or annual reports could go to jail and pay steep personal fines for what is known as “defective certification” or “willful noncompliance.” This provided fuller transparency to the investing public, who purchased companies’ stock based on those organizations’ published financial statements.

But SOX went further. As a “corporate ethics statement,” it was obliged to address ethical working conditions and, as such, included details surrounding discrimination, harassment and retaliation, which clearly impacted HR departments around the nation. In doing so, SOX went far beyond the “letter” of the law (i.e., the legal standard) and spoke directly to the “spirit” of those laws (i.e., the ethical standard), thereby providing publicly traded companies with far more discretion and latitude in interpreting employee misconduct, managerial “bad acts” and the concept of acting outside the course and scope of any leader’s managerial authority.

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SOX was such a practical law governing publicly traded companies that many private employers opted to adopt “codes of conduct” as well. The reasoning was simple: Policies and procedures may document the letter of the law (i.e., facts and rules), but codes of conduct incorporate the spirit of the law (i.e., the intention or design of the rules). They cast a much wider discretionary net in capturing the spirit and essence of goodwill in the workplace and thereby provide employers with a lot more discretion in mitigating and resolving workplace challenges and problematic individual behaviors.

Practical considerations in workplace ethics

Workplace ethics impact day-to-day leadership issues, including:

  • How to distinguish between employee performance and conduct challenges
  • Differentiating between sameness and consistency in employee acts and behaviors
  • Workplace due-process obligations (i.e., progressive discipline prior to termination versus the employment-at-will termination standard)
  • Diversity of thoughts, ideas and voices, and proper ways of expressing and encouraging differing perspectives in a “psychologically safe” way
  • Interpreting the impact of social movements on corporate behaviors, including the #MeToo, #TimesUp, #BlackLivesMatter, #BlueLivesMatter, #HimToo, #HeForShe and #OrangetheWorld initiatives
  • Whistleblowers versus character assassins: how to conduct yourself when the target of meanspirited employee allegations
  • Corporate social responsibility and environmentalism: opportunities to make the world a better place
  • Gender pay equity in addition to pay transparency: equality of opportunity and pay parity, including stronger internal promotion practices
  • Jobs-for-felons programs and corporate America’s responsibilities in rehabilitating ex-offenders and minimizing recidivism
  • Artificial intelligence, especially in terms of data that is bias-free and ethically acquired.

Hone your ethical lens

Virtually any workplace matter that holds deep meaning for workers can and should be captured through a moral or ethical lens, including work/life/family balance and remote work, volunteerism and good corporate citizenship, and mental wellness and well-being initiatives.

When workplace ethics inform an organization’s basic and most strategic decisions, it creates and sustains a culture based on trust, collaboration, and accountability.

When ethical and moral considerations are openly discussed and shared among departments and teams, it creates a greater sense of inclusion and belonging. When senior executives and frontline operational leaders are held to the highest standards of workplace ethics, everyone can do their best work every day with peace of mind.

Consider building and honing your ethical muscle to make it a prominent part of your leadership brand, and making discussions surrounding ethical and moral leadership a core driver of your organization’s culture and philosophy.

Paul Falcone is a corporate management trainer, certified executive coach and international keynote speaker. He is the former CHRO of Nickelodeon and author of Workplace Ethics: Mastering Ethical Leadership and Sustaining a Moral Workplace (HarperCollins Leadership, 2022).