11.03.2009
Seven Steps for Ensuring Governance and Changing the Ethical Culture of an Organization.
This brief summary, prepared by Ali Midillili, explains the 7 steps that an organization can take to change its culture to one that ensures governance and promotes and rewards ethical behavior.
1. State position, philosophy or belief
The organization (through its senior leadership) announces that it has formally adopted a specific position, philosophy or set of beliefs regarding those fundamental values or principles which it wants employees to use as the basis for business decision-making. This statement is couched as integral to the identity of the organization and to be applied without exception, by every decision-making employee.
2. Create formal organizational systems
The organization creates and implements the formal systems, procedures and policies which explicitly define expectations regarding employee behaviors that are needed to guide employees in their day-to-day decision making. Examples of these systems include statements of values, codes of conduct, ethics policies, ombudspersons, ethics oversight committees, ethics surveys, employee "help-lines", and other ethics management mechanisms.
3. Communicate expectations through informal (leadership) systems
Leaders at all levels of the organization explicitly and implicitly communicate their expectations regarding employee behavior, reinforcing the explicit organizational expectations detailed through the formal systems and structures. This includes the visible use of the ethics systems in their own decision making and the requirement that subordinate employees do likewise.
4. Reinforce policy through measurements and rewards
The organization reinforces its statement of position, philosophy or belief by making adherence to the associated guidelines and policies an integral part of how success is measured and rewarded. Informally, frontline leadership measures and rewards adherence to the stated position of the organization.
5. Implement communications and education strategies
The organization embarks on a strategic communications and education campaign to ensure that employees understand the stated position and the behavioral expectations, as well as have familiarity with the systems and structures that have been put in place to facilitate employee fulfillment of those expectations.
6. Use response to critical events to underscore commitment
Senior leadership uses critical events in the business to underscore their commitment to the stated position, philosophy or belief. They make their adherence to the position explicit and use the critical event as evidence of how the highest levels of the organization are accountable to the same standards as are imposed throughout the organization.
7. Avoid perception of hidden agendas
One of the most critical, yet least controllable, shapers of any organization's ethical culture is employees' perceptions of the motives behind senior management's adoption of the stated position, philosophy or belief, their hidden agendas. Senior management needs to assiduously avoid any decision or action which could reasonable be expected to communicate a self-serving or selfish motive for imposing the previously referenced position, systems or measurements on the employees of the organization.
In order to enforce these seven steps for organisational change, Board selection and the definition of Board member? roles and their responsibilities is the ultimate first step to initiate organisational change. Given the complexity of corporate environments, the quality of directing and supervision has become an increasingly important determinant of corporate strategy and success. The selection, approach and objectives of Boards and its individual members, firstly protects shareholder interests and secondly enable the company to be better equipped in the international competition for capital. As corporate governance is about credibility and accountability, it provides additional assurance to both existing and potential shareholders. Given the positive and significant correlation between added returns to investors and the presence of a professional Board, investors feel more confident because ethical standards ensure the fact that important questions are raised promptly and addressed thoroughly.
The Seven Step approach will enable the Boards to develop and impose a new system of checks and balances to meet and exceed both international and national codes and standards.
Ali Midillili
msearch
March 2010
Seven Steps for Ensuring Governance and Changing the Ethical Culture of an Organization.
This brief summary, prepared by Ali Midillili, explains the 7 steps that an organization can take to change its culture to one that ensures governance and promotes and rewards ethical behavior.
1. State position, philosophy or belief
The organization (through its senior leadership) announces that it has formally adopted a specific position, philosophy or set of beliefs regarding those fundamental values or principles which it wants employees to use as the basis for business decision-making. This statement is couched as integral to the identity of the organization and to be applied without exception, by every decision-making employee.
2. Create formal organizational systems
The organization creates and implements the formal systems, procedures and policies which explicitly define expectations regarding employee behaviors that are needed to guide employees in their day-to-day decision making. Examples of these systems include statements of values, codes of conduct, ethics policies, ombudspersons, ethics oversight committees, ethics surveys, employee "help-lines", and other ethics management mechanisms.
3. Communicate expectations through informal (leadership) systems
Leaders at all levels of the organization explicitly and implicitly communicate their expectations regarding employee behavior, reinforcing the explicit organizational expectations detailed through the formal systems and structures. This includes the visible use of the ethics systems in their own decision making and the requirement that subordinate employees do likewise.
4. Reinforce policy through measurements and rewards
The organization reinforces its statement of position, philosophy or belief by making adherence to the associated guidelines and policies an integral part of how success is measured and rewarded. Informally, frontline leadership measures and rewards adherence to the stated position of the organization.
5. Implement communications and education strategies
The organization embarks on a strategic communications and education campaign to ensure that employees understand the stated position and the behavioral expectations, as well as have familiarity with the systems and structures that have been put in place to facilitate employee fulfillment of those expectations.
6. Use response to critical events to underscore commitment
Senior leadership uses critical events in the business to underscore their commitment to the stated position, philosophy or belief. They make their adherence to the position explicit and use the critical event as evidence of how the highest levels of the organization are accountable to the same standards as are imposed throughout the organization.
7. Avoid perception of hidden agendas
One of the most critical, yet least controllable, shapers of any organization's ethical culture is employees' perceptions of the motives behind senior management's adoption of the stated position, philosophy or belief, their hidden agendas. Senior management needs to assiduously avoid any decision or action which could reasonable be expected to communicate a self-serving or selfish motive for imposing the previously referenced position, systems or measurements on the employees of the organization.
In order to enforce these seven steps for organisational change, Board selection and the definition of Board member? roles and their responsibilities is the ultimate first step to initiate organisational change. Given the complexity of corporate environments, the quality of directing and supervision has become an increasingly important determinant of corporate strategy and success. The selection, approach and objectives of Boards and its individual members, firstly protects shareholder interests and secondly enable the company to be better equipped in the international competition for capital. As corporate governance is about credibility and accountability, it provides additional assurance to both existing and potential shareholders. Given the positive and significant correlation between added returns to investors and the presence of a professional Board, investors feel more confident because ethical standards ensure the fact that important questions are raised promptly and addressed thoroughly.
The Seven Step approach will enable the Boards to develop and impose a new system of checks and balances to meet and exceed both international and national codes and standards.
Ali Midillili
msearch
March 2010