No individual or organisation is immune from confronting ethical dilemmas, but the not-for-profit sector faces some specific challenges in recognising and responding to ethics in the workplace.
Professor Charles Sampford, director of the Institute for Ethics, Governance and Law at Griffith University says that, to be ethical, organisations must ask hard questions about their values, give public answers, and live by them.
What commonly derails NFP boards when it comes to ethics?
"Sometimes, the worst forms of destructive behaviour are found in organisations where there is no need for profit. People can highjack debate and discussion because they’re using the organisation’s higher purpose to pursue personal agendas. That’s a huge risk to viability."
How important is a code of ethics?
"A code of ethics is a dead letter if the board isn’t bound by it. The drive for ethics must be led by the CEO in consultation with the board and must engage members of the organisation at all levels.
"It involves defining organisational values, and the challenges, temptations and dilemmas that might lead you to fail to fulfil them at all levels. The problem often looks different at the ‘coal face’ and the boardroom."
How do you encourage best-practice in ethical behaviour?
"Build in reporting processes that clearly and quickly identify when people are in breach. Make a distinction between aspirational and disciplinary ethics.
"The aspiration should be to live up to the highest standards and that should be an ‘ethical pull’. The disciplinary ‘push’ says if you fall below a certain standard, consequences will follow.
"When sanctions are imposed, probability is often more important than the level of punishment."
What about conflicts of interest?
"The lack of the profit motive in NFPs can mean that conflicts are less of an issue for some. But for those with large revenues, making money for a higher purpose may mean disadvantaging your poorest stakeholders – for example sporting clubs and gambling machines."
What can NFP boards do better?
"Appoint someone with an ethics background who is expected to raise ethical questions about the organisation’s policies and conduct. Members or employees also need someone out of the chain of command from whom they can seek ethical advice.
"Dealing with ethics should always be a learning experience that feeds back into the process of regular code revision. That means thinking about the ethical dimensions of what you’re doing at all times."
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