Towards a code of ethics CEO

Corporate responsibility is being redefined in a rapidly changing global environment. The information revolution, globalisation and population pressure are changing societal values, perceptions of authority and standards of behaviour.

While nation states and government are not declining in size, their influence is being increasingly constrained as globalisation progresses. Arguably the major impact of the information revolution is a transfer of power from traditional centres of authority to new forms of organisation with a global, as opposed to a national, focus and to the individual. Transparency is being demanded, not just of business, but of all institutions in society, particularly government. In this environment the customer is king and the role of individual corporations is continually critiqued. The extent to which corporations take up wider responsibility to fill the vacuum created by the declining influence of national governments, and the legitimacy they have to do that, is a matter of intense debate.

Not surprisingly, corporate reputation has become one of the keys to achieving bottom-line performance. Reputation requires far greater self-regulation with the adoption of high ethical standards and value systems, and a preparedness to live and be judged accordingly. This is not just an issue for big business, it is equally if not more important for medium and small business. Given this background, the AICD/KPMG Boardroom Report surveyed members' attitudes towards ethics in the September quarter 1999. The survey showed that: * while ethics was seen as an important issue and was alive in the boardroom, it was not yet embedded in the workplace culture of most organisations; * there was ambivalence about the responsibility for ethics, whether it should rest with the board or with management; * there was not a clear consensus on what an effective ethics program would look like; * there was a tendency to look at ethics from a compliance perspective rather than one based on values and principles. Directors tended to perceive the benefits of ethics narrowly in terms of attracting quality employees and safeguarding reputation, rather than enhancing the overall commercial performance of the organisation.

Members surveyed also indicated that they would look to AICD for guidance in this area. The current AICD Code of Conduct was published initially in 1996. This code touches on aspects of ethics, but it is not a code of ethics as such. Further, the differentiation between codes of ethics and codes of conduct has evolved since that time, as Attracta Lagan explains on Page ??. Accordingly, earlier this year AICD initiated a project to develop an AICD Code of Ethics, in conjunction with KPMG's business ethics specialists as facilitators. A code of ethics, to be effective, must be tailored specifically for a particular organisation as value systems and principles vary widely. Therefore our project will develop a code of conduct for AICD as an organisation, examining the values and principles of AICD members, councillors, management and staff, to produce a code which is relevant to our organisation specifically. In addition to the development of AICD's own code, the intention is to develop a process which can be provided to members to enable them to develop codes of ethics for their own organisations. This would be done by way of briefings, seminars and publications. It is also intended to provide members with access to the St James Ethics Centre counselling service.

It is hoped to complete the project by end-2000, with a briefing program being rolled out early next year. Part of the process in developing the AICD Code of Ethics is member participation which we are seeking via the questionnaire being circulated with this edition of the journal. I would greatly appreciate members taking the time to complete the questionnaire on this important issue and I look forward to communicating the results to you in due course.

Disclaimer

The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.