Does your Code of Ethics send the right signals to employees?

Following on from this recent post, your employees should now be convinced that your firm’s code of ethics is worth paying attention to. What then does your existing code of ethics actually say about your firm? The impression it leaves might be quite different from the one you intended it to convey. In this second post about ethics codes, I want to help you cast a critical eye over your existing code so that you know where you’re starting from.

I’m going to do this in two ways: the first is by running through some questions you can ask yourself about your firm’s code. Here are some to get you started:

1. Who has responsibility for the code? Is it clear? And are they at least a director, preferably the chief executive?
2. When was it last substantively reviewed? I’m not talking about the last time it was modified, but the last time a group of people sat down and had a serious think about what it is there for and whether it is achieving that? How does that date align with other changes in your firm?
3. Does the code reflect the firm as it is now? Firms change and codes are quickly seen as irrelevant if they no longer represent a firm that may have seen mergers, new products, new joint ventures and the like.
4. Does it have a clear and current ethical vision? In other words, a reason for people paying it serious attention.
5. Is it relevant for the firm’s current objectives, for the ethical risks it is currently facing? Equally, does it have something to say to the people engaged on that exciting, game changing project the firm is pulling all the stops out on?
6. Does it have something to say about any pressures the firm may be under from recent FCA reviews? Does it come across as being in sync with current market issues, or does it have a ‘hewn in stone’ feel to it?
7. Could the whistleblowers in your firm (both existing and ‘thinking about it’) look to the code of ethics and find something relevant and reassuring in it? Does it have something to say to these people, who are probably the ones most in need of its support?

It’s very easy for questions such as these to be asked and answered by a senior manager or two, in isolation from the current of opinion running through the firm. That would be a mistake, for while the code of ethics is owned by the firm, it exists for employees. And that brings me to the second component of a successful review of your code of ethics: listen to what people have to say about your code. In my experience, employees rarely lack an opinion about matters of fairness, of trust and integrity. And more often than not, their views are perceptive and valuable.

There’s little rocket science behind tuning into that employee voice and the various techniques for doing so should be familiar. Don’t be tempted though to think you know what they would say: it’s much better to hear their actual voice. You may be pleasantly surprised – I once reviewed a recently completed service contract whose core standard turned out, when users were actually asked, to be completely irrelevant to their needs. The new standards took the insurer in a direction it had never thought of going before.