You’ve written your firm’s code of ethics and put it on your intranet, and probably your website as well. So how are you making sure that people are actually opening it and reading it? You can’t just assume they will. My recent review looked at five ways in which UK insurers can encourage people to open and read their codes of ethics. And it found that many insurers are missing out on some small but significant improvements.
This aspect of a code of ethics matters. A policy document that doesn’t encourage people to open it and look inside will be a policy document that achieves far less than it could do. And even if you tell people that they must read it, the extent to which they then engage with its contents will depend on how relevant they feel it is and how its messages are being conveyed.
So, in looking at how a code of ethics can become an inviting read, the review studied five attributes: how local was the code; how it was endorsed; when it was last reviewed; its length, and the narrative style adopted. Here’s what I found.
How Local was the Code of Ethics?
Six of the ten firms in the review were part of international insurance groups. This meant that the question of whether to adopt a code local to the UK or the one that applied across the group, had to be considered. The review found that five of the six insurers used global codes, and one had created a local code for its UK operation.
It’s a balancing act. A global code gives more consistency to the group message on ethics. At the same time, it can leave that code with a more distant feel. Given that all six of these international insurers had sizeable UK operations, this could pose a problem.
Is that global code reaching local audiences? All five of the insurers who used global level codes only made that code available on their main group website. While employees might be able to find it on their local UK intranet, customers and others have to know how that local firm fits within a global group and then search around a group website for the code. This unnecessary distance could easily be removed.
Is it speaking to them about relevant issues, in language that resonates? Group writers have a tendency to write in the style of the group’s home country. This is absolutely understandable, but not necessary advisable. A group wide code should speak to its employees in ways that reflects their diversity.
And they should speak about issues that resonate across their different operations, not just their home market. This isn’t easy, but at the same time, it is a quid pro quo of running a global operation. Global consistency is of reduced value if it isn't balanced with some degree of local relevance.
Did the Code have Leadership Support?
The way in which leaders associate themselves with ethics is a cue that employees take note of. The review therefore looked at how leaders in each firm positioned themselves in relation to their code of ethics. In four of the insurers studied, a chair or chief executive provided a personal statement about why their code was important.
And each of those executives provided powerful statements, making clear not just why employees should follow the code, but also why that executive personally saw it as an important thing to do. That personal dimension added a lot to the way in which employees would read the code. A further check found that all four of those executives were still in that role in their respective firms, so their support for the code of ethics was still current.
These sort of supporting executive statements can sit within the code itself or alongside it. They add a lot of value to how the code is engaged with, and including them is a small but significant step.
When was the Code last reviewed?
A code of ethics that carries the date of its last review sends a signal of when it was last given attention by the firm’s management. And where there is no date, it suggests that the firm only attends to ethics on an occasional, as and when, basis.
Four of the insurers in the review carried some form of date marker. Two of those were clearly stated in the code, while the remaining two dates were only to be found in the document identifying code. So, in effect, only two of the insurers were showing a willingness to be open about when their code was last attended to.
And of the four dates identified, three were within the last three years, while one was more than ten years past. So it looks like that latter insurer had started with the best intentions, but not kept up with them. On the flip side, one insurer stood out on this aspect, including not only the (recent) date of last review, but the date of the next review as well.
Dating your ethics policy is another small but significant step. It signals that it is up-to-date and relevant, and paid attention to by senior management. And that helps employees pay attention to it as well.
How long was the code?
It’s natural that codes of ethics should come in all shapes and sizes, reflecting the firms that create them. So a word count of a code may on the surface seem irrelevant, but it can be linked with access. Too long a code and people are put off reading it, while too short a code makes people think it’s not got much to say.
A lot hinges on how the code is positioned in relation to other corporate documents. Some codes strive to include a lot of issues in them, some in detail, while others keep to powerful statements of intent. The review found that most firms had codes of ethics in the region of 1,800 to 2,800 words.
Two had much longer codes, of over 5,000 words. Yet both codes put that length to good use, by including frequent examples of what good practice and poor practice looked like. One code stood out – they had clearly spent time thinking about how to design their policy so that while long, it still felt inviting to the reader.
What you include or leave out of your code of ethics needs to be thought through. It has to be clear in its purpose, as well as positioned with a wider family of policy documents. What was clear from the review was that a little thought given to a code’s design delivers a lot of value to its accessibility.
The Codes’ Narrative Style
The narrative style used in a code of ethics can be indicative of the relationship between the firm and its employees. The first person narrative can feel more inclusive, with the ethical expectations conveyed as more like a joint venture. Second person narratives can feel more like the firm telling the employee what to do. And third person narratives can feel rather impersonal, like rules to be followed. The review found that most insurers had adopted the first person narrative, which I think is a good one for codes of ethics.
The review looked at the level of subordination in how the codes were written. This is an estimate of how often a statement was followed by an explanation. A typical example would be to urge the employee to do X because it will help us achieve Y. Most codes were found to have a strong level of subordination, which was good. It pointed to insurers not only telling people what was expected of them, but why that was expected as well.
Insurers can take some simple steps to transform the attention give to their code of ethics:
- make the code local in some way. If your firm has a global code, make it available on every country’s website and intranet;
- make sure the code includes some form of supportive statement by a senior executive;
- put a date on the code, but make sure it’s then reviewed on a regular basis;
- think about the design of your code, especially if it’s going to be a long one;
- write it in a first person narrative, with lots of supportive explanations that tell people why something is important.
The final post in this series will look at the type of ethical issues that these codes were talking about, and how confidently insurers were handling some of the key terms associated with ethics.