HR’s role in ethics

By supporting clear ethical standards, HR professionals can help create an ethical workplace.

The importance of ethics in the workplace is increasingly being acknowledged. As a result, many organisations have recognised the need to guard against major misconduct. A smaller number of organisations are going beyond just avoiding misconduct to also strive to increase the level of ethical behaviour. For those organisations, the ultimate goal would be the creation of an ethical culture where ethics permeates the way things are done.

Realising this goal is, however, not an easy, one-step exercise. It is determined by a combination of initiatives and necessitates wide support within the company. This latter factor can be an obstacle to ethics being addressed in a coordinated manner and to the effectiveness of an ethics programme. Even when a company has a social and ethics committee and an ethics officer, championing and implementing facets of ethics can be shared amongst numerous roles: the CEO, the company secretary, the compliance officer, the risk officer or the HR officer.

However, HR is still able to fulfil an important role to promote ethics within the three primary factors that contribute to an ethical culture: ethical standards, ethical awareness and operational ethics.

Ethical standards

The principal purpose of the company’s ethical standards is to provide a clear guide for behavior. They should ideally be documented in a code of values, a code of conduct and supporting policies, which together constitute a code of ethics. Since this is generally considered an HR function, HR is perfectly placed to ensure that this foundation aspect of ethics is up-to-date, reviewed annually and well understood within the organisation - and, consequently, to ensure that this is an effective facet of the organisation’s ethics programme.

Ethical awareness

Ethical awareness is a very effective factor (often under-rated) that serves to promote ethical behaviour and to reduce unethical behaviour. The best example of the latter is the effect of visible policing, for example, the private security vehicles that patrol some suburbs. Their presence may not result in many (or any) criminals actually being apprehended, but it serves to raise ethical awareness and, in so doing, acts as a deterrent to crime being committed in that area.

The same principle applies in a workplace with high levels of ethical awareness. This can be achieved by a variety of mechanisms of which the following three are especially impactful:

  • Assessing, monitoring and reporting on ethical performance The Companies Act Social and Ethics Committee and King III advocate that a company’s ethical performance is assessed, monitored, reported on and disclosed. These actions also serve to promote ethical awareness (amongst other benefits). HR is able to initiate this process or to make recommendations to drive the process forward.
  • Ethics training This is another important contributor to building and maintaining ethical awareness, which also generally falls within the scope of HR.
  • Leadership In their capacity as role models, leaders are able to build ethical awareness very successfully. HR can again be involved to ensure ethics workshops are conducted with the company’s leadership and top talent to emphasize the company’s commitment to ethics and to better equip their leaders to be ethical role models.

Operational ethics

Integrating ethical standards into the company’s operations is really important as it influences whether and how ethics is practised. This has a proportional impact on ethical standards, ethical awareness and an ethical culture, either supporting and building or undermining and eroding them.

Within HR’s domain, ethics can be incorporated into a range of practices, systems and procedures, such as ethics hotlines; recruitment checks; remuneration and promotion discussions and decisions; performance management systems and evaluation criteria; employee award programmes or employee of the month nominations, and transparency in communications (for example, about disciplinary incidents, which can discourage further unethical behaviour and promote ethical behaviour by the company’s visible commitment to its values and rules).

Being successful at building an ethical culture brings with it many internal, operational benefits such as greater trust, better and faster decision making and consistency of responses, greater confidence in top management action, more individual accountability and less need for policing, and the avoidance of excessive regulation. Other benefits include being able to attract and retain top staff and board members, increased employee engagement and commitment, improved risk management, higher levels of investor and market confidence, and enhanced corporate reputation and brand equity.

Many of these benefits of sound ethics directly support HR’s areas of responsibility, and therefore represent a good reason why HR should support ethics. However, the greater reason is arguably that HR maximises their spheres of responsibility and influence to make a meaningful contribution to creating a more ethical workplace for their employees. As is always the case, the extent to which HR makes this difference will rest on their commitment to ethics and the level of their engagement in pursuing an ethical culture.

By Cynthia Schoeman
Published in HR Future, October 2013