Question

What is HR’s role in creating an ethical environment?

Answer 1

HR’s role in cultivating an ethics-friendly corporate environment can be placed into four broad categories.

1) HR professionals must help ensure that ethics is a top organizational priority. Pat Wright, head of Cornell University’s Center for Advanced Human Resource Studies, has stated that, in the wake of business scandals, HR leaders will take on a “bigger role in monitoring the culture of the organization in terms of its ethical status,” according to Human Resources Report. But monitoring alone won’t suffice. HR executives must either take on the mantle of ethics champion or ensure that some other capable person in the organization does so. Such a champion will need to be highly experienced and respected, having enough organizational clout to make a difference.

2) HR must ensure that the leadership selection and development processes include an ethics component. After all, leaders at all levels of the organization need to both model ethical behavior and communicate ethical standards to employees, suggests research conducted by Ethics Resource Center . Selection procedures can filter out people who, despite making their numbers, are known for cutting ethical corners. And leadership development should include not only ethics theory but real-life examples, perhaps from mentors, on how managers have handled ethical dilemmas in the past.

Among the most difficult aspects of ensuring ethical leadership may be convincing top management, including board members, that they too should receive ethics training. A Conference Board survey of over 80 ethics, HR and legal officers found that only about a quarter had held training programs for their boards of directors. Yet, over half (55%) of these respondents said their boards are “not engaged enough” in major ethical decisions associated with their organizations.

Promoting gender diversity among top leadership might have a positive impact on ethics, at least among Canadian firms, suggests a report by The Conference Board of Canada. It showed that 94% of boards with three or more women make sure of their organization’s adherence to conflict-of-interest guidelines, while only 68% of all-male boards do the same. The same survey indicated that boards with larger numbers of women also are more likely than all-male boards to ensure that codes of conduct are followed in their organizations.

3)The major HR responsibility is ensuring that the right programs and policies are in place, keeping in mind that the U.S. government is developing a stricter set of sentencing guidelines. A news release notes that under the U.S. guidelines first promulgated in 1991, “an organization’s punishment is adjusted according to several factors, one of which is whether the organization has in place an effective program to prevent and detect violations of law.” In light of recent scandals, the U.S. Sentencing Commission has “sent to Congress significant changes to the federal sentencing guidelines for organizations, which should lead to a new era of corporate compliance.” This amendment would strengthen the criteria that companies are required to use when developing their compliance programs.

HR professionals should, of course, be aware of these guidelines and how they’re evolving. But even more challenging is the need to customize programs to the specific risks in a given corporate culture. “Getting it to work is not simple,” said Ed Petry, executive director of the Ethics Officer Association, in Workforce Strategies.

4) HR must stay abreast of emerging ethics issues. This doesn’t mean just following legislation, which tends to be reactive rather than proactive. It means looking at the entire social and business environment and spotting conflicts of interest and other ethics problems before they develop into full-blown scandals. A combination of tools can help with this. Obviously, employers need to pay close attention to the questions and concerns that are flagged via employee hotline services and other feedback systems. To gauge what’s happening outside the company, HR can turn to environmental scanning techniques that help them see how new developments – ranging from emerging technologies to global culture clashes – could result in ethical problems down the road.