Code of Conduct for the 21st Century Business

The purpose for creating a business Code of Conduct for business owners is to protect themselves from lawsuits and to ensure good workplace and public relations; more and more businesses are creating codes of conduct for their employees to follow. Courts enforce and determine whether an employee’s actions were negligent are using effective codes of conduct.

Protects the Public

An effective code of conduct can protect the public as well as employees. The code of conduct should ensure that the employees act professionally and reliably when interacting with the general public and with each other.

Specific and Comprehensive

Codes of conduct that use specific language are more effective because they allow employees to see exactly what actions the company allows. A comprehensive code of conduct also ensures that the employee knows many of the possible situations he/she may face.

Penalties

Enforcement should include penalties even up to loss of employment. The business is responsible for making sure employees are aware of penalties for violating the code of conduct.

A corporate code of conduct does not have any standardized definition, and refers to a company's public policy, which defines their standards for ethical conduct. They are completely voluntary, meaning that a company may choose to have or not have one, and may address any issue from common workplace issues to worker's rights. Most corporate codes of conduct have evolved as a result of consumer pressure, which has given rise to a whole sector of corporations focused as much on ethical behavior as profit in recent years.

Formats

Compliance codes, corporate credos, and management philosophy statements are the three most common types of corporate codes of conduct. Compliance codes outline required employee or company actions in terms of ethical behavior; corporate credos explain a company's accountability to its stakeholders; management philosophy statements are more general outlines of expected company actions relative to ethical guidelines.

Content

Employee honesty, company commitments to the employee, confidentiality of records, environmentalism, product and workplace safety, drug-related issues, and employee conduct are all issues commonly dealt with in corporate codes of conduct. Regional variation is common; ethical considerations are more prevalent in codes for U.S. companies while workplace safety is more frequently addressed in European organizations.

Execution

Many corporations with codes of conduct will also offer training to their employees regarding them. Such training can be as narrow as an explanation of the company's ethics statements only, or may involve a variety of ethical sensitivity exercises.  Videos on ethics and educational seminars are also a common medium of instruction. In those cases where no training is provided, manager comprehension of codes is often assured through oral or written confirmation.

Transparency

In terms of the transparency, access to and dissemination of corporate codes of conduct, there is a clear trend favoring the distribution of such codes to all employees of an organization. Some companies even include portions of their corporate code of conduct in their annual reports to shareholders. It is far more common, however, that codes are kept in internal circulation.

Enforcement

Most corporate codes of conduct do not state any enforcement provisions. Some, such as Boeing, note only "violations of the company standards of conduct are cause for appropriate corrective action, including discipline." According to the U.S. Department of Labor survey, companies who are contractors of the U.S. government may face corrective action if they fall short of complying with the code of conduct of the government department they service.

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Confronting Business Adversity

Whenever we interact with other people, the potential for adversity exists. Business owners may deal with customers/clients, vendors, employees, partners, and government agencies, and all of these interactions are breeding grounds for miscommunications and disagreements.

Clients may be dissatisfied with billing, strategy, or other aspects of legal representation. Vendors may miss-bill us or provide defective or unsatisfactory products or services. Partnerships can be like marriages; partners may disagree on the goals and direction of the practice or the responsibilities of each partner, or they may engage in wrongful acts in the course and scope of the business. Employees may also not perform as expected. Government agencies can cause a myriad of tax and compliance problems.

This article cannot solve all of those challenges. Rather, it provides some basic rules, preemptive suggestions, and solutions. Following are some basic rules, preemptive suggestions and solutions:

The most important rule in dealing with a potential adversarial situation is “don’t wait, communicate.” Effective communication can cut many potential problems off at the pass. It is important to establish clear relationships from the beginning. Fee agreements and other contracts can help avoid many problems relating to what each party expects of the other. Regarding employees, basic rules and handbooks will let them know exactly what is expected of them.

The second rule is “communicate effectively.” If a relationship with any person or entity begins to get sticky, take the high road in your communications. Think about whether you want to be right or to attain your goal. Communicate in the preferred style of the recipient. If you know the other party likes to talk on the phone, call them. If their preferred communication modality is e-mail, use it. Begin and end every communication on a positive note. I start many letters with “thank you . . ..” Even if it is “thank you for speaking to me on the telephone . . ..” Saying thank you goes a long way. The listener or reader is much more likely to shut down and not hear a word you say if the communication starts with a threat or a criticism. If the communication ends that way, the reader may disregard everything they have read previously. You can do this without appearing to be a pushover and still maintain respect.

Effective communication does not arise from emotion. I often wait a day to respond to e-mail or a letter that I know will lead to a conflict in my day. After I receive problem letters and e-mail messages, I typically wait a day to respond to allow my emotional reactions to subside. If it is impossible to refrain from emotional involvement in an issue, it may be prudent to retain someone else to represent you in the matter. I have done so, as an example, in a tax audit.

Rule number three is “document, document, document.” Even if you deal with your potential adversary on the telephone, send a confirming letter or e-mail immediately to memorialize the conversation. Save hard copies of everything. Keep complete and organized files on all adversarial matters. You never know when you may need this documentation. Unfortunately your business is more about saving your assets than saving trees.

Three simple rules:

•                Don’t wait, communicate;

•                Communicate effectively; and

•                Document, document, document; we can avoid many adversarial situations and minimize those that do arise.

With these three simple rules, we can avoid many adversarial situations and minimize those that do arise.

Overcoming adversity is part of everyone's personal and business life. The stress of our jobs, various family issues, personal relationships, and of course, today's economy, are all critical issues that makes it difficult in overcoming adversity that so many of us are fighting with to resolve our life's battles.

Adversity does not have the ability to ruin your life if you do not allow it to do so. Sometimes adversity is what you need to face in order to become successful. It is the giant that does its greatest damage on the battlefield of our mind (not our body). It humbles us, but it is our isolation in the face of those setbacks that is devastating. The most important ingredient of success is the ability to bounce back from adversity. One trait above all others reliably predicts whether a person will have a successful experience in overcoming adversity. That is a positive attitude!

Resolve in advance that you will meet and overcome every difficulty, and then, no matter what happens, don't give up until you do. If "why" you want something isn't strong enough, you may find it difficult to overcome the roadblocks. To maintain a positive attitude when the going is rough is difficult if your reason to do so is not motivating. Only then do you have the ability to overcome and summon the strength to do so. Persistence can overcome just about anything, given enough time. When you are feeling like you may not be able to overcome a roadblock, take a moment to remember a time when you were able to overcome adversity. How did you feel when you were able to overcome the roadblock and celebrate the success?

Attitude and motivation still transcend knowledge, skill, and technology as the most important contributors to success. A daily dose of motivation helps us cope with the challenges we face every day, giving us strength and reinforcing our beliefs in our own abilities. It helps us maintain our attitudes. Use positive quotes and daily affirmations to help keep you focused. Brainstorm other solutions if the path you have chosen appears blocked. Forecast possible end results to each brainstormed path and then choose the one that seems most likely to bring you success. If at first you do not succeed, well then use the old adage, "try-try again."

Overcoming adversity is something we must deal with each and every day regardless of social position, economic background, race, creed, lifestyle or culture. Make no mistake, though hidden from plain sight, on the other side of every challenge is the opportunity to experience immense personal growth. You must maintain hope and perseverance. Then and only then will you overcome and experience the success that you deserve.

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Business-Ethics & Moral in the 21st Century

You’ve undoubtedly run across people who, in their personal lives, seem to be above reproach, both morally and ethically, but put them in a business situation and, well, they can exhibit an incredible lack of morality and ethical behavior. Or, of course, the situation could easily be reversed. People may exhibit a high degree of moral and ethical behavior on the job, but, in their personal lives, behave in exactly the opposite manner. But that’s another matter. In this installment we will focus strictly on the business aspects of ethics and morality.

Let us reveal the dictionary definitions:

Ethics–plural noun

(Usually used with a singular verb) that branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions.

Morals–adjective

Have, pertaining to, or concerned with the principles or rules of right conduct or the distinction between right and wrong; ethical: moral attitudes.

How much of an issue is ethics and morality in business? Apparently, it’s a significant issue, particularly as it applies to employee relations. Pick up almost any newspaper today and chances are there will be a regular feature that focuses on job-related issues: how to get along with "bosses from hell," how to avoid the office "back-stabbers" or the office "gossips," ad infinitum. And, of course, all such forms of anti-social behavior, we contend, fall under the general purview of immoral and unethical behavior on the job. Treating one’s fellow human being in such a manner, whether that person is a subordinate or a peer falls significantly short of practicing "The Golden Rule" (Treat others as you would like to be treated).

Defenders of such behavior generally consisting of those on the giving end, rather than those on the receiving end point to the fact that such behavior is excusable because it occurs in a business setting. Business is serious stuff, they argue, a "contest," where the "strong" not only survive over the weak but prevail. The toughest, the most vicious, the most predatory, the most domineering and the most intimidating "win" in business! It’s definitely a "win at any cost" proposition, even if that means severely "cutting corners" on either morals or ethics, or both. Different values prevail, they say. I say, "Nonsense!"

Without question, to succeed in business today, and arguably, at any other time in business history, certainly one has to be shrewd, aggressive and persistent. That does not mean, however, that one has to ignore moral and ethical norms.

Of course, we have all heard or read the stories about those people who continually exhibit incredibly immoral or unethical behavior and still gravitate to the highest ranks of business, sometimes even aspiring to the top slot in an organization. What’s the message here? Without question, it seems to be a mixed one. Most of us instinctively believe, by virtue of our religious beliefs, our moral upbringing, or even our own internal moral "compass," that ultimately evil will be punished, either in the here and now or certainly in the great beyond. Yet seeing such obviously immoral and unethical people prosper in a business setting seems to give lie to that belief, does it not? It almost appears that commonly accepted standards of moral and ethical behavior apply in every facet of life except in business. Almost.

We happen to believe that most people are honest, principled and, given the opportunity, will do the right thing, whether they are in a social setting or a business setting. Most of us don’t practice one set of moral and ethical rules in our personal lives and another set in our business lives. Nor should we. As with most immoral and unethical behavior, that occurring in a business setting will ultimately be punished. It might not be today, or even tomorrow or the next day, but it will ultimately have negative repercussion!

How will this punishment reveal itself? We’re already beginning to see evidence of it. Just recently a number of major companies, which, over the years, have reportedly treated their employees in less than an appreciative manner, have practically been overwhelmed with "volunteers" for staff reduction programs the companies have announced. Not surprisingly, no loyalty or genuine commitment to the workers is resulting in any loyalty or genuine commitment from the workers. And, while the companies may today be rather blasé about such a turn of events, their attitudes could quickly change in the future if, as has happened often in the past, these same companies find they need to rebuild their workforces to meet growing business needs. Obviously, in the current period of record unemployment, especially among skilled workers, they shouldn’t expect employees to beat an existing path out the door. They can get away with treating their employees in a sub-par manner because it is the opinion that every employee should be grateful that they have a job at all.

There are, unfortunately, numerous other recent examples of incredibly immoral and unethical behavior being regularly practiced in, or at least tacitly condoned by, the executive suites of major companies. (We’re not even going to touch on what is alleged to have been happening recently in the highest circles of American government!) The giant commodities conglomerate Archer Daniels Midland comes immediately to mind. Key executives recently came under fire for attempted price-fixing, skimming and a number of other nefarious activities. Then there is Mitsubishi Motors, which agreed to a $34 million settlement with a group of women claiming gross and rampant sexual harassment at its Bloomington-Normal, IL, manufacturing facility. And, of course, there is the Denny’s Restaurant chain, which has been charged with practicing racial discrimination among black customers.

Let us not exclude Wall Street, financial managers, state, local, federal government employees and elected officials.

Unfortunately, the list goes on and on.

How many years will it take for these companies, as well as some other well-known companies who have behaved just as despicably, to regain their formerly good reputations? Will they ever regain their good reputations?

It is deceptively easy to view the antics of such major companies rather impersonally, i.e., to view the companies as individual entities practicing immoral and unethical behavior, rather than placing the culpability where it rightfully belongs on the shoulders of the human individuals actually responsible for such reprehensible conduct.

Make no mistake about it; companies that allow their officers and employees to behave in an immoral or unethical fashion will not survive long term in the marketplace. Some of them obviously believe that they can do anything and still survive as long as they have enough money to "buy" their way out of trouble (if they are caught). But that belief has never worked very well for very long in human circles, and it won’t work very well for very long in business circles, either. Just as inevitably happens to human beings who practice such self-deception, the companies’ that likewise practice it will ultimately be "history."

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The Economic Advantages of a Flat Tax

A flat tax system fundamentally differs from the progressive tax system of the United States. Tax rates are applied evenly across all income classes rather than adjusted based on income. Tax forms are simple and compact, eliminating the frustration and cost of filing income taxes; subsidies and tax deductions are virtually eliminated. Proponents of a flat tax claim that economies greatly benefit from a flat tax system, citing examples of success in the Baltic region. Opponents claim that a flat tax benefits higher income families much more than lower-income homes.

Flat Tax and Savings

Current tax regulations favor consumption over savings and investment by imposing heavy burdens on capital gains, interest income and dividends. Under a flat tax system, income is taxed once at a flat rate, encouraging people to save and invest more of their income, since their investments will not be taxed at every turn. An economy-wide increase in savings and investment can have positive spillover effects, such as a boost to the housing market, financial services industry and automobile industry.

Flat Tax and Economic Growth

According to a study by the National Center for Policy Analysis (NCPA), "The Economic Effects of a Flat Tax," industrial investment is not structured to favor the most competitive and attractive industries under a progressive tax. Due to subsidies and unequal treatment of diverse industries, it can be more profitable to invest in low-growth or low-profit sectors. The study proposes that a flat tax redistributes investment away from highly subsidized industries, such as farming, towards more competitive industries, such as manufacturing. This can have the effect of increasing production in nearly every industry.

Individuals are encouraged to work harder, earn more money and further their careers under a flat tax system, whereas a progressive tax system tends to punish people for success. This can serve to increase economy-wide spending and small business startups, providing a further boost to a range of industries and the overall tax-base.

Income Effects

Higher-income households will realize significant income benefits under a flat tax system. Besides the obvious effect of lowering base tax rates, which many people in the highest income bracket consider unreasonable under a progressive tax system, a flat tax does not impose itself on interest revenue, dividends, capital gains or inheritance.

Under several flat tax proposals, individuals and families would receive personal allowances – a set amount of income that is tax-exempt – that would limit their taxable income. This would allow the lowest-income brackets to be completely or nearly exempt from income taxes. This fact, coupled with the increase in employment resultant from economy-wide industrial expansion, helps lower-income households to realize significant income benefits as well.

Flat Tax Revenues

A flat tax would seem to lower tax revenues for the government under a superficial analysis, but deeper look reveals several positive possibilities.

The economy-wide increase in production and consumption, as well as the increased productivity of individuals, can lead to higher economy-wide income, resulting in an increase in the overall tax-base. Tax evasion and avoidance would become less profitable, decreasing the number of people who do not pay their taxes, and it would no longer be possible to manipulate the deductions in the tax code to completely negate the tax burden of high-income individuals.

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