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Integrity: What This
Means for Your Organisation
Anthea Johnston APR FPRISA
Delivered at the PRISA Reputation Management Conference 2003 Introduction
About ten years ago research into corporate South Africa showed that most companies put profit at the top of the list and ethics and ethical behaviour at the bottom. Today, ethics and ethical behaviour are two of the private sector’s key issues. That’s an interesting and significant change in attitude in a relatively short time.
You should also have noticed the amount of column space and airtime that the media in South Africa are giving to this hot topic at present. Not only do we have journalists plagiarising their global colleagues and thinking that they can get away with it, but we have government officials running for cover, denying or wishing away corruption or even fraud and of course, wishing fervently that the media would get off their backs. In other words, ethics and ethical behaviour are big news and a media issue. We cannot sweep unethical practices under the carpet any more. We have to confront them and deal with them, Better still, we have to prevent their happening.
This paper does not attempt to explain why this change in attitude towards ethical behaviour has happened. However, this change in emphasis is related to South Africa’s return to global markets and the pressures that come from the United States and Europe to conform to international norms and standards. It is also related to the concepts of transparency and good corporate governance.
What I will do is discuss integrity within the framework of reputation management and ethical behaviour and what it means to an organisation. How integrity relates directly to its reputation and eventually to the bottom line.
As a public relations and communication professional, I will also discuss the importance of strategic communication in relation to corporate governance and codes of ethics, as well as risk and reputation management.
A Few Questions
Given that this is not the best slot in a conference and assuming that you all lunched well, I would like to put a few questions to you before I continue. These are intended to get you thinking about what I have to say in this paper: These questions are only for you. No one else will see them, so please answer honestly. Write down your immediate response. Don’t think about the answer. There is no right or wrong answer.
Just answer them as I ask them:
1 Does your organisation have vision and mission statements?
2 Do you know what they are?
3 Are they prominently displayed?
4 Do other people in your organisation know what they are?
5 Do they mean anything to you?
6 Do you think your organisation lives up to them?
7 Would you describe your corporate culture as good, supportive, bad, not supportive or neutral?
8 Do you suspect that there is corruption somewhere?
9 Do you know that there is?
10 Can you put your hand on your heart and say that everyone in your organisation lives up to its vision and mission?
11 Does your organisation have a code of ethics?
12 If so, do people know about it and abide by it?
13 Does your organisation have a risk management strategy?
14 Does your organisation have a whistle-blower structure?
15 Would you rather be working in a more ethical and honest environment?
You will have given different answers. However, the questions are important and worth a bit of thought.
Definitions
In the interest of good communication and to help ensure that we all have the same understanding of what I’m discussing, I would like to establish a few definitions first.
Integrity: before I offer a definition, would you quickly jot down your own definition. Anyone prepared to offer a definition?
Integrity: The quality of having strong moral principles; The state of being whole or complete; Internal consistency
Can you think of words associated with Integrity?
Honesty, incorruptibility, principle, rectitude, uprightness, trustworthy, goodness, cohesion, completeness, unity, wholeness.
So a person or organisation with integrity is one that we trust; that has a good reputation.
Integrity is the noun and the verb is to integrate, one we hear often.
What does it mean to us? What do we understand by it?
Integrate: to combine or to bring together to form a whole.
Integral is the adjective: Necessary to make the whole complete. Fundamental:
Included as part of the whole.
So we talk about ISDN – integrated services digital network, a telecommunications network to transmit data digitally. We talk about integrated systems. We talk about integrating people and cultures.
The opposite? Disintegrate: To break up into small parts, the result of decay, to lose cohesion.
Related words: Break up, break apart, crumble, disunite, fall apart, fall to pieces, reduce to fragments, separate, shatter, splinter.
Interpretation
The concept of integrity is closely linked to reputation. Your personal reputation is closely linked to your behaviour and relationships with others. The same goes for an organisation. Research shows that perceptions of a good reputation are closely linked to an organisation’s relationships with its stakeholders, as well as its code of ethics and behaviour.
It has been said that your reputation is what people say behind your back or when you’re not there. Think about it.
Do you want people to say that you can’t be trusted? Do you want to work for an organisation that people say can’t be trusted? What sort of a corporate culture is it likely to have?
Those of us working in public relations know that perceptions are reality. We also know that people do not do business with companies, they do business with people - and organisations are the sum of the values of those people.
Everything is interlinked. Nothing happens in isolation.
If integrity is not just an abstract concept or topic for philosophical debate, how do we interpret it for ourselves and our
organisation? It’s what you or your organisation does with such concepts that makes a difference.
Ideally we should see personal integrity as one of our key values. Ideally we should be people of principle who cannot be corrupted: people who are honest and who know right from wrong.
I like to believe that human beings are basically moral creatures. However, we live in a material age of consumerism where all too often greed rather than honesty rules. Dishonesty and crime may lead to short term gains. However they also mean long term losses.
We only have to look at the recent collapse of some big, international organisations: Enron or Anderson and, closer to home, Leisurenet. Greedy and unprincipled people in these organisations cooked the books, lied to stakeholders, covered up losses and corrupt practices – for short term gain.
Sharp-eyed people with principles – or perhaps a grudge - uncovered these deceptions. Suddenly the media, which, don’t forget, is global through the Internet, took up the issue and the next thing you had highly paid executives having to admit, like schoolboys, that they had been dishonest: that what they had done was wrong.
Worse than that, stakeholders, including shareholders who represent a very powerful group of stakeholders, withdrew their support. They couldn‘t sell their shares fast enough, people panicked and the share price plummeted. The organisation’s reputation was in tatters. Stakeholders didn’t want to be involved with an organisation that had a bad reputation. They didn’t want to hear about corrupt and dishonest practices and suddenly didn’t want anything to do with an unethical organisation. The next thing you know, a global organisation has collapsed, gone, imploded. All this as a result of unethical practices and a disregard for the importance of integrity and a good reputation in the market place.
So, ethics is not just a first world concept or philosophy, one for wealthy nations. Ethics is for everyone. The same applies to integrity.
Integrity and Ethics
The King II Report on Corporate Governance for South Africa, published last year, has been described as a ‘standard-setting document showing the way towards building a good corporate ethics culture.’ It focuses mainly on key integrated sustainability concerns of corporate management such as shareholder relations, ethical practices and organisational integrity.
It states, ‘non-financial issues have significant financial implications for a company.’ Such issues include an organisation’s reputation among stakeholders, both internal and external. If an organisation is perceived as upholding ethical practices and subscribing to good corporate governance; in other words, has a good reputation, then potential shareholders are more likely to see it as a good investment risk. As you know, the more people want the shares, the greater the value and the greater the dividends to shareholders.
Ethics and ethical practices form an integral part of such an organisation’s values and corporate culture. However, not all South African companies subscribe to such beliefs, either in principle or in practice.
Research conducted by the Ethics Institute of South Africa shows that South African companies cannot be complacent about ethical compliance or organisational integrity. It seems that a substantial number of those surveyed simply paid lip service to formal corporate ethics management, without making this integral or central to its corporate value system or culture.
So it looks as though there are still too many organisations that say they comply with ethical guidelines, but do not ‘walk the talk’ as the expression has it.
According to Professor Deon Rossouw, writing for the Financial Mail, there are three types of ethics strategies. There is the reactive strategy where ‘ the chance is good that there will be a gap between talking and walking ethics.’ There is the compliance strategy which may breed a mentality of ‘what is not forbidden is allowed.’ The third is an integrity strategy which ‘seeks to obtain the commitment of individual members of the organisation to a set of shared corporate values.’
Having an ethics strategy suggests that an organisation recognises certain ethical risks and wants to develop a strategy to counter these risks. It also suggests that an organisation accepts that if it does not develop an ethics strategy as part of its risk management strategy, then it is leaving out a significant risk factor.
It is interesting to note that the King II report recommends a multilateral approach to risk identification. This approach encourages internal and external stakeholder participation in the process. It also allows an organisation to measure perceptions of its ethical reputation.
According to Rossouw, a reactive strategy ‘is a defensive approach to managing ethical risk.’ It appears that this strategy is based on the premise that by developing such a strategy the organisation will not attract investigation into its practices, rather than recognising that ‘ethical business is good business.’
I’m sure you see the potential risks and dangers here. Sadly, most of our corruption scandals appear to be based on the assumption that if you hide unethical practices while saying that you have done nothing wrong and you say this often enough, the investigators and the media will go away. That’s not the way it works today.
A code of ethics or risk management strategy that is not implemented throughout an organisation is meaningless and can lead to a substantial credibility gap among stakeholders. All to often we hear employees say that they don’t really believe what is written in documents such as the Vision and Mission, since no one lives them and management doesn’t uphold the principles.
In that situation, all you need is a disgruntled employee to tip off the media about something that management would prefer to keep hidden and you have a potential scandal to deal with. Such scandals have caused the collapse of large corporations which didn’t really do what they said they were doing and didn’t have the strategies in place to manage the ensuing crisis.
The compliance strategy tries to prevent unethical behaviour in organisations. They have a code of ethics and they ‘measure their own ethical performance against this standard.’ Rossouw describes this as a ‘rule-based approach to managing ethics.’
While this is an improvement on the reactive strategy, it could cause employees to think that ‘what is not forbidden is allowed.’ This can lead to a proliferation of rules and punitive measures that try and cover all eventualities. What it doesn’t do is give employees the opportunity of deciding what is and is not ethical and of choosing for themselves to abide by ethical standards because that’s the right thing to do.
According to Rossouw, the integrity strategy is ‘ a value-based approach to managing ethics that tries to promote ethical behaviour.’ It is based on everyone’s commitment to ethics and standards, as well as shared corporate values.
In other words, this strategy treats employees as responsible adults who know the difference between right and wrong and who recognise that unethical behaviour can harm both the organisation and themselves. While it is open to abuse, it does presuppose total commitment to a set of policies and guidelines on ethical behaviour, led by those at the top.
As in everything, leadership makes all the difference. If employees see that the leadership does not live by the code of ethics, then they won’t either. In the long run, it simply doesn’t work to say one thing and do another, especially if one is ethical and the other isn’t.
As Willem Landman, director of the Ethics Institute of South Africa, has pointed out, individuals and organisations can decide to make ethical choices. In his view, an ethical choice involves:
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Choosing values-driven actions
- Understanding and adopting core values
- Living core values in practice
- Solving ethical problems
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Choosing right over wrong
- Respecting moral/legal rights
- Discharging moral/legal obligations
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Choosing good over bad
- Promoting good consequences
- Avoiding and minimising bad consequences
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Choosing fair over unfair
- Impartially balancing interests.
Landman also looks at three approaches to making ethical behaviour part of an organisation’s corporate culture. He outlines a compliance approach as one where the emphasis is on rules, an approach that is intended to prevent unethical conduct, is enforced externally. However, without a grounding in values, it has no clear direction or goal.
The values approach emphasises values, promotes ethical behaviour, and implies internal commitment and personal responsibility for behaviour. However, without compliant behaviour and a real commitment to values, is empty and meaningless.
The integrated approach balances values and rules. It promotes ethical behaviour and has zero tolerance for unethical conduct. There is internal commitment reinforced by external structures. However, the challenge is to ‘ground compliance explicitly in values and ideals’, supported by appropriate policies and procedures.
I would also add, supported fully by the board and top management – in both word and deed.
Communication is Integral to Meaningful Compliance
Let’s assume that your organisation has defined its values and code of ethics. Perhaps it has decided that the integrated system is the way to go, looking at long term benefits, rather than short term gains.
Effective communication of all this is now vital to ensure real understanding, compliance and, where necessary, a shift in corporate culture towards values-based, ethical behaviour.
Ethics South Africa’s research shows that very often, poor communication to all stakeholders hinders understanding and compliance. Senior management might state that they have a code of ethics, while employees lower down the scale either don’t know that there is such a thing or don’t think it’s important, largely because corporate behaviour and culture aren’t based on it.
To me, as a communication professional, this is disturbing, but not surprising. Effective communication with stakeholders is still a rare commodity in South Africa and little understood by many in leadership or management positions.
So when your organisation does its risk analysis, it should take these points into account. Managing risk should include looking at your values and code of ethics. Are they relevant? Are they a vital part of the corporate culture or are they dead pieces of yellowing paper on a wall somewhere?
Are new employees introduced to your values and code of ethics as an integral part of an induction programme and your corporate culture? Do they understand how these determine the way the organisation does business? Are your values and code of ethics integrated into all your systems, policies and procedures and do your employees know and understand this?
One of the objectives of effective communication of any message is to achieve understanding in the person receiving the message. Another is to encourage certain desired attitudes and perceptions in the minds of stakeholders.
In preparation for this paper I went on the Internet and looked at leading organisations’ vision and mission statements, their values and codes of ethics. They made interesting reading. Not all have codes of ethics and some of the visions and missions sound unrealistic. The question is, does any of this sound like your organisation? If so, can you do anything about it?
Only further research will demonstrate whether theses ideals are an integral part of the organisations’ corporate culture and whether they are communicated effectively to all stakeholders, both within and outside the organisation.
Landman’s research also showed that there appeared to be a ‘generally low level of familiarity with the contents of a company’s code of ethics.’ Most appeared to be more rules-based than principles-based.
What it also showed was that levels of effective communication were very low; that from middle management down there were gaps in communication and employees weren’t sure that the people at the top were committed to stated values or ethical behaviour. The implication there is that if employees perceive that top management is not committed, then what incentive is there for them to commit to ethical behaviour?
A well-structured communication strategy is part of an organisation’s insurance against risk. It’s also a vital part of its reputation management strategy. Effective communication with all stakeholders should be strategic and integrated into an organisation’s business and other strategies.
Like ethics, effective public relations and communication management is not:
However, as we know, all too often, public relations, like ethics, is considered expendable, a cost rather than a resource. Until there’s a crisis, that is.
So if you want to develop and maintain good corporate governance, respect for and adherence to a code of ethics, then you must communicate it – to all your stakeholders.
Communicating an organisation’s code of ethics and integrating it into the corporate culture should begin almost before someone is employed. Some organisations even test candidates’ levels of integrity and honesty before they employ them.
I suppose it’s no different to Disney’s policy of hiring people with the right attitude and values. Skills can be learned later. Attitudes and values go much deeper.
Your communication strategy starts with a good induction programme. In the first week a new employee is introduced to the code of ethics and the organisation’s values and it is made clear that every employee is expected to comply 100% with these.
As with all good strategies, you need to research and analyse the current situation. Then you agree on a set of achievable objectives for the strategy. This is followed by identifying and segmenting your target audiences, as well as key messages. Then you can set in place activities to achieve your objectives. One of these activities must include communication tools to get the messages across to internal and external stakeholders.
These tools would include, for example, some of the following:
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An induction programme
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Use of the intranet and email systems
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Newsletters
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Personal meetings
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Information and Q&A sessions with employees
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Endorsement of the strategy by the organisation’s leaders
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Booklets and other printed material with the code of ethics and values
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Evidence that leaders and management within the organisation also comply with these codes
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Constant reinforcement of the principles and policies
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Ethics and good governance policies seen to be practised
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Transparent reporting
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Where appropriate, triple bottom line reporting
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As much direct communication as feasible
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Employee forums and conferences
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Team building exercises.
Most important, in my view is that leaders practise what they preach; that they are consistent in both what they say and what they do.
Having implemented your strategy, don’t forget to measure and evaluate how effective it was.
To Sum Up
No one, no matter what their business, can afford to ignore ethics and ethical practices today. An organisation’s reputation depends on the trust that stakeholders have in both its words and actions. Its reputation also depends on the levels of integrity in the organisation as a whole and in the people who belong to it.
However, it’s not enough to have a code of ethics or an integrated strategy. Ethics and ethical behaviour have to be practised at all levels and by everyone. The leadership must walk the talk and no one can afford to pay lip service to the concept of ethical behaviour, particularly if you want to be globally competitive.
To complete the circle, an organisation’s code of ethics and values must be effectively communicated to all its stakeholders. Not only that, but all stakeholders must be encouraged to comply with the code because that’s the way that business should be run. Unethical behaviour should never be an option. It should be completely unthinkable.
Of course I’m talking about an ideal world. But it’s something that I believe we can and should all aim for and work towards.
Thank you.
Sources:
Ethics South Africa, report and
presentation
Financial Mail and other media
The Internet
PRISA code of Ethics
PRSA code of Ethics
Global Alliance for Public Relations Code of Ethics
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