MAP for Nonprofits’ Team Values

Colleagues having a Team Building

MAP for Nonprofits’ Team Values

(Also see Ethics:
Practical Toolkit for Business
).

This document serves as an example
of a code of ethics. As well as having corporate codes, codes
can be geared for specific purposes and be focused on various
relationships. The following code is geared to support the working
relationships among staff at MAP
for Nonprofits.

These team values guide how we MAP
staff members interact with each other in our workplace. The integrity
of these values rests on how consistently we apply them. We regularly
review and update these values to reflect current priorities in
our workplace.

– Actively work for the common good –

LEADERSHIP

· Model MAP’s corporate vision, mission and values, as
well as these team values

RESPONSIBILITY & INTEGRITY
· Participate — say what you believe
· Work to know who will do what and by when
· Do what you say you’re going to do when you say you’re going to do it
· Take initiative!

RESPECT
· Actively listen and acknowledge my viewpoint
· Recognize the value of my job — ask for my help and
realize that I have other priorities
· Be sensitive to my values, my culture — reap the richness
of diversity
· Be friendly and thoughtful to all

TEAMWORK
· Recognize others’ contributions and successes
· Cooperate with fellow staff members and support their efforts
· Support MAP decisions and strategic objectives
· Don’t take ourselves too seriously — have fun!

CREATIVITY
·Encourage thinking “outside the box”
·Encourage discussion around points of disagreement or uncertainty
·Challenge the status quo
·Envision possibilities
·Allow yourself to experiment, fail and try again

– Respectfully hold people responsible for these Team Values –

1997

This document can be copied; please cite MAP for Nonprofits in St. Paul, Minnesota.


For the Category of Ethics:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books


Business Ethics and Social Responsibility

Business ethics written on a note

Business Ethics and Social Responsibility

Sections of This Topic Include

Also consider
Related Library Topics

Learn More in the Library’s Blogs Related to Ethics and Social Responsibility

In addition to the articles on this current page, also see the following blog that has posts related to Ethics and Social Responsibility. Scan down the blog’s page to see various posts. Also see the section “Recent Blog Posts” in the sidebar of the blog or click on “next” near the bottom of a post in the blog. The blog also links to numerous free related resources.

Library’s Business Ethics Blog


About Ethics, Principles and Moral Values

See a video about managing ethical and legal risks and boundaries, and what to do if you encounter ethical or legal issues. (The video is in the context of consulting, but applies to leading, as well.) From the Consultants Development Institute.

Simply put, ethics involves learning what is right or wrong, and then doing the right thing — but “the right thing” is not nearly as straightforward as conveyed in a great deal of business ethics literature. Most ethical dilemmas in the workplace are not simply a matter of “Should Bob steal from Jack?” or “Should Jack lie to his boss?”

(Many ethicists assert there’s always a right thing to do based on moral principle, and others believe the right thing to do depends on the situation — ultimately it’s up to the individual.) Many philosophers consider ethics to be the “science of conduct.” Twin Cities consultants Doug Wallace and John Pekel (of the Twin Cities-based Fulcrum Group; 651-714-9033; e-mail at jonpekel@atti.com) explain that ethics includes the fundamental ground rules by which we live our lives. Philosophers have been discussing ethics for at least 2500 years, since the time of Socrates and Plato. Many ethicists consider emerging ethical beliefs to be “state of the art” legal matters, i.e., what becomes an ethical guideline today is often translated to a law, regulation or rule tomorrow.

Values which guide how we ought to behave are considered moral values, e.g., values such as respect, honesty, fairness, responsibility, etc. Statements around how these values are applied are sometimes called moral or ethical principles. (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)

What is Business Ethics?

The concept has come to mean various things to various people, but generally it’s coming to know what it right or wrong in the workplace and doing what’s right — this is in regard to effects of products/services and in relationships with stakeholders.

Wallace and Pekel explain that attention to business ethics is critical during times of fundamental change — times much like those faced now by businesses, both nonprofit or for-profit. In times of fundamental change, values that were previously taken for granted are now strongly questioned. Many of these values are no longer followed.

Consequently, there is no clear moral compass to guide leaders through complex dilemmas about what is right or wrong. Attention to ethics in the workplace sensitizes leaders and staff to how they should act.

Perhaps most important, attention to ethics in the workplaces helps ensure that when leaders and managers are struggling in times of crises and confusion, they retain a strong moral compass. However, attention to business ethics provides numerous other benefits, as well (these benefits are listed later in this document).

Note that many people react that business ethics, with its continuing attention to “doing the right thing,” only asserts the obvious (“be good,” “don’t lie,” etc.), and so these people don’t take business ethics seriously. For many of us, these principles of the obvious can go right out the door during times of stress. Consequently, business ethics can be strong preventative medicine. Anyway, there are many other benefits of managing ethics in the workplace. These benefits are explained later in this document.

(Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)

Managing Ethics in the Workplace

Managing Ethics Programs in the Workplace

Organizations can manage ethics in their workplaces by establishing an ethics management program. Brian Schrag, Executive Secretary of the Association for Practical and Professional Ethics, clarifies. “Typically, ethics programs convey corporate values, often using codes and policies to guide decisions and behavior, and can include extensive training and evaluating, depending on the organization. They provide guidance in ethical dilemmas.” Rarely are two programs alike.

“All organizations have ethics programs, but most do not know that they do,” wrote business ethics professor Stephen Brenner in the Journal of Business Ethics (1992, V11, pp. 391-399). “A corporate ethics program is made up of values, policies and activities which impact the propriety of organization behaviors.”

Bob Dunn, President and CEO of San Francisco-based Business for Social Responsibility, adds: “Balancing competing values and reconciling them is a basic purpose of an ethics management program. Business people need more practical tools and information to understand their values and how to manage them.” (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)

Developing Codes of Ethics

According to Wallace, “A credo generally describes the highest values to which the company aspires to operate. It contains the `thou shalts.’ A code of ethics specifies the ethical rules of operation. It’s the `thou shalt nots.” In the latter 1980s, The Conference Board, a leading business membership organization, found that 76% of corporations surveyed had codes of ethics.

Some business ethicists disagree that codes have any value. Usually they explain that too much focus is put on the codes themselves, and that codes themselves are not influential in managing ethics in the workplace. Many ethicists note that it’s the developing and continuing dialogue around the code’s values that is most important. (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)

Developing Codes of Conduct

If your organization is quite large, e.g., includes several large programs or departments, you may want to develop an overall corporate code of ethics and then a separate code to guide each of your programs or departments. Codes should not be developed out of the Human Resource or Legal departments alone, as is too often done. Codes are insufficient if intended only to ensure that policies are legal. All staff must see the ethics program being driven by top management.

Note that codes of ethics and codes of conduct may be the same in some organizations, depending on the organization’s culture and operations and on the ultimate level of specificity in the code(s). (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)




Resolving Ethical Dilemmas and Making Ethical Decisions

Perhaps too often, business ethics is portrayed as a matter of resolving conflicts in which one option appears to be the clear choice. For example, case studies are often presented in which an employee is faced with whether or not to lie, steal, cheat, abuse another, break terms of a contract, etc. However, ethical dilemmas faced by managers are often more real-to-life and highly complex with no clear guidelines, whether in law or often in religion.

As noted earlier in this document, Doug Wallace, Twin Cities-based consultant, explains that one knows when they have a significant ethical conflict when there is presence of a) significant value conflicts among differing interests, b) real alternatives that are equality justifiable, and c) significant consequences on “stakeholders” in the situation. An ethical dilemma exists when one is faced with having to make a choice among these alternatives.

Assessing and Cultivating Ethical Culture

Culture is comprised of the values, norms, folkways and behaviors of an organization. Ethics is about moral values, or values regarding right and wrong. Therefore, cultural assessments can be extremely valuable when assessing the moral values in an organization.

Also consider

Ethics Training

The ethics program is essentially useless unless all staff members are trained about what it is, how it works and their roles in it. The nature of the system may invite suspicion if not handled openly and honestly. In addition, no matter how fair and up-to-date is a set of policies, the legal system will often interpret employee behavior (rather than written policies) as de facto policy.

Therefore, all staff must be aware of and act in full accordance with policies and procedures (this is true, whether policies and procedures are for ethics programs or personnel management). This full accordance requires training about policies and procedures.

Some Contemporary (Arguably) Ethical Issues






General Resources Regarding Managing Ethics in the Workplace


Social Responsibility

Social responsibility and business ethics are often regarding as the same concepts. However, the social responsibility movement is but one aspect of the overall discipline of business ethics. The social responsibility movement arose particularly during the 1960s with increased public consciousness about the role of business in helping to cultivate and maintain highly ethical practices in society and particularly in the natural environment.

Boards and Corporate Social Responsibility


General Resources Regarding Social Responsibility

There are many online resources in regard to social responsibility. The following will help to get your started.


For the Category of Ethics:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


Complete Guide to Ethics Management: An Ethics Toolkit for Managers

Ethics concept

Complete Guide to Ethics Management: An Ethics Toolkit for Managers

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.
(This guide is located at https://staging.management.org/businessethics/ethics-guide.htm on the Web.)

The profession of business ethics has long needed a highly practical resource that is designed particularly for leaders and managers — those people charged to ensure ethical practices in their organizations. Unfortunately, far too many resources about business ethics end up being designed primarily for philosophers, academics and social critics. As a result, leaders and managers struggle to really be able to make use of the resources at all.

Also, far too many resources about business ethics contain sensationalistic stories about businesses “gone bad” or prolonged preaching to businesses to “do the right thing”. These resources often explore simplistic ethical questions, such as “Should Jane steal from the company?” The real world of leaders and managers is often much more complex than that.

This guide is a straightforward and highly practical tool designed to help leaders and managers implement comprehensive ethics management systems in their workplaces — systems to deal with the complex, ethical issues that can occur in the day-to-day realities of leading and managing an organization.

For Web readers:

This free guidebook is about 20 pages long (8 1/2″ x 11″ pages). If you are reading the document on the World Wide Web, please wait until the document is fully loaded before attempting to link to its sections listed below. The best approach to using this guidebook may be to print it out for ongoing reference. The Free Management Library provides additional information about ethics and a great range of other free information about management. For a complete list of library topics, see https://staging.management.org/topics.htm

Disclaimer:

The author, Carter McNamara, MBA, PhD, makes no warranty, express or implied, nor assumes any legal liability for accuracy, completeness, or usefulness of any information from this guide.

Another Tool to Effectively Infuse Ethical Principles:

If you are planning to infuse strong, ethical principles throughout your company or want to change the culture of your company, then you might take the advice of Bob Kniffin, Vice President of External Affairs, at Johnson and Johnson (J&J) company. The way that J&J handled an ethical issue (the “Tylenol scare” crisis) in the 1980s is probably one of the most inspiring and enlightening examples of how to successfully deal with a major ethical issue in business. Kniffin was one of the key players in helping J&J to handle the crisis so effectively. Kniffin said that it was not the J&J Credo (a form of a code of ethics) that helped J&J to handle the crisis so well. Rather, it was the ongoing “challenge sessions” that the company regularly held in order for each person to clarify their own perspective and commitment to the J&J Credo. Authenticity Consulting’s peer coaching groups are a powerful, yet straightforward, means to organize, facilitate and evaluate challenge sessions. For more information about the peer coaching groups, go to our publications site (https://www.authenticityconsulting.com/act-lrn/AC_pubs.htm) and consider the “Program Planning Kit”.

About this Free Guidebook

· This free guidebook aims to fill a large void of practical, realistic ethics information for leaders and managers, whether nonprofit or for-profit.
· This guidebook takes about two hours to read. It is concisely written and well organized as a step-by-step guidebook for handy reference.
· This guidebook is free in order to make its contents highly accessible to organizations, particularly those with limited resources. The free nature of this document does not in any way indicate that its content are of low value — high fees and impressive presentation do not necessarily imply high value.
· The author hopes the online form of this document remains a dynamic community resource that is continually modified and improved by feedback, particularly from leaders and managers — those people in the trenches who are charged with applying business ethics techniques in the workplace.

This document contains the following sections:

Also consider
Related Library Topics

Acknowledgment
Particular “Thanks!” goes to Twin Cities-based consultants, Doug Wallace and Jon Pekel, of the Fulcrum Group (651-714-9033; e-mail at jonpekel@comcast.net), for contributing key information to this document. I have referenced their copyright where I included their key materials in this guidebook.


Document Fills a Void of Practical Business Ethics Information for Leaders and Managers

Current Literature is Focused on Needs of Philosophers, Academics and Social Critics — Leaders and Managers Require More Practical Information About Managing Ethics
Managing ethics in the workplace holds tremendous benefit for leaders and managers, benefits both moral and practical. This is particularly true today when it is critical to understand and manage highly diverse values in the workplace.

However, the field of business ethics has traditionally been the domain of philosophers, academics and social critics. Consequently, much of today’s literature about business ethics is not geared toward the practical needs of leaders and managers — the people primarily responsible for managing ethics in the workplace. The most frequent forms of business ethics literature today typically include: a) philosophical, which requires extensive orientation and analysis; b) anthologies, which require much time, review and integration; c) case studies, which require numerous cases, and much time and analyses to synthesize; and d) focus on social responsibility, which includes many examples of good and bad actions taken by companies. (This lack of practical information is not the fault of philosophers, academic or social critics. The problem is the outcome of insufficient involvement of leaders and managers in discussion and literature about business ethics. More leaders and managers must become involved. This guidebook aims to increase that involvement.)

What’s Conspicuously Missing is the “How to” of Managing Ethics in the Workplace
But it isn’t from lack of examples that managers aren’t better at managing ethics in the workplace — they require more practical information about managing ethics. This problem was explained very well by Stark in his article, “What’s the Matter with Business Ethics?” published in the Harvard Business Review (1993, May/June, pp. 38-48). Brenner (Journal of Business Ethics, V11, pp. 391:399) notes “while much has been written about individual components of ethics programs, especially about codes of ethics, the literature is much more limited on ethics programs.” Wong and Beckman (Journal of Business Ethics, V11, pp. 173- 178) note that “researchers are claiming that current literature is filled with strong arguments for more ethical corporate leadership and incorporation of ethics in business curriculum, but what is conspicuously missing is the “how to” in actually putting ethical goals and theories into practical action.”

Myths Abound About Business Ethics, e.g., “Ethics is Simply to Do What’s Right”
Lack of involvement from leaders and managers in the field of business ethics (again, this is the fault of no one or of everyone) has spawned a great deal of confusion and misunderstanding among leaders and managers about business ethics. McDonald and Zepp, in their article “What Should Be Done? A Practical Approach to Business Ethics” (Management Decision, 28, 1, 1990, pp. 9-13), note that when someone brings up the topic of business ethics “… it tends to bring up cynicism, righteousness, paranoia, and laughter.” Many leaders and managers believe business ethics is religion because it seems to contain a great deal of preaching. Or, they believe it to be superfluous because it seems to merely assert the obvious: “do good!”

Business Ethics Literature is Often Far Too Simplistic — So Many Leaders and Managers Think Business Ethics is Irrelevant

Stark notes that “often ethicists advance a kind of moral absolutism that avoids many of the difficult and most interesting questions.” Case studies to explore ethical dilemmas are often far too simplistic, presented as if every real-life situation has a right and wrong e.g., “should I lie, cheat or steal?” Consequently, many managers believe business ethics is irrelevant because too much business ethics training avoids the real-to-life complexities in leading organizations. (This document contains samples of real-to-life, complex ethical dilemmas, in a subsection, “Examples of Real-to-Life Complex Ethical Dilemmas” in the upcoming section “Ethics Tools: Resolving Ethical Dilemmas.”) Bob Dunn, President and CEO of San Francisco-based Business for Social Responsibility, explains, “Ethical decisions aren’t as easy as they used to be. Now, they’re the difference between right — and right.” Preston Townley, in his speech “Business Ethics: Commitment to Tough Decisions” (Vital Speeches, January 1992, pp. 208-211), states that “… it ought to be fairly easy to choose between right and wrong by relying on principles, but business activity often demands that we select from alternatives that are neither wholly right or wholly wrong.”

What is Business Ethics?

Let’s Start With “What is ethics?”

Simply put, ethics involves learning what is right or wrong, and then doing the right thing — but “the right thing” is not nearly as straightforward as conveyed in a great deal of business ethics literature. Most ethical dilemmas in the workplace are not simply a matter of “Should Bob steal from Jack?” or “Should Jack lie to his boss?”

(Many ethicists assert there’s always a right thing to do based on moral principle, and others believe the right thing to do depends on the situation — ultimately it’s up to the individual.) Many philosophers consider ethics to be the “science of conduct.” Twin Cities consultants Doug Wallace and John Pekel (of the Twin Cities-based Fulcrum Group; 651-714-9033; e-mail at jonpekel@atti.com) explain that ethics includes the fundamental ground rules by which we live our lives. Philosophers have been discussing ethics for at least 2500 years, since the time of Socrates and Plato. Many ethicists consider emerging ethical beliefs to be “state of the art” legal matters, i.e., what becomes an ethical guideline today is often translated to a law, regulation or rule tomorrow. Values which guide how we ought to behave are considered moral values, e.g., values such as respect, honesty, fairness, responsibility, etc. Statements around how these values are applied are sometimes called moral or ethical principles.

So What is “Business Ethics”?

The concept has come to mean various things to various people, but generally it’s coming to know what it right or wrong in the workplace and doing what’s right — this is in regard to effects of products/services and in relationships with stakeholders. Wallace and Pekel explain that attention to business ethics is critical during times of fundamental change — times much like those faced now by businesses, both nonprofit or for-profit. In times of fundamental change, values that were previously taken for granted are now strongly questioned. Many of these values are no longer followed. Consequently, there is no clear moral compass to guide leaders through complex dilemmas about what is right or wrong. Attention to ethics in the workplace sensitizes leaders and staff to how they should act. Perhaps most important, attention to ethics in the workplaces helps ensure that when leaders and managers are struggling in times of crises and confusion, they retain a strong moral compass. However, attention to business ethics provides numerous other benefits, as well (these benefits are listed later in this document).

Note that many people react that business ethics, with its continuing attention to “doing the right thing,” only asserts the obvious (“be good,” “don’t lie,” etc.), and so these people don’t take business ethics seriously. For many of us, these principles of the obvious can go right out the door during times of stress. Consequently, business ethics can be strong preventative medicine. Anyway, there are many other benefits of managing ethics in the workplace. These benefits are explained later in this document.

Two Broad Areas of Business Ethics

1. Managerial mischief.Madsen and Shafritz, in their book “Essentials of Business Ethics” (Penguin Books, 1990) further explain that “managerial mischief” includes “illegal, unethical, or questionable practices of individual managers or organizations, as well as the causes of such behaviors and remedies to eradicate them.” There has been a great deal written about managerial mischief, leading many to believe that business ethics is merely a matter of preaching the basics of what is right and wrong. More often, though, business ethics is a matter of dealing with dilemmas that have no clear indication of what is right or wrong.
2. Moral mazes. The other broad area of business ethics is “moral mazes of management” and includes the numerous ethical problems that managers must deal with on a daily basis, such as potential conflicts of interest, wrongful use of resources, mismanagement of contracts and agreements, etc.

Business Ethics is Now a Management Discipline

Business ethics has come to be considered a management discipline, especially since the birth of the social responsibility movement in the 1960s. In that decade, social awareness movements raised expectations of businesses to use their massive financial and social influence to address social problems such as poverty, crime, environmental protection, equal rights, public health and improving education. An increasing number of people asserted that because businesses were making a profit from using our country’s resources, these businesses owed it to our country to work to improve society. Many researchers, business schools and managers have recognized this broader constituency, and in their planning and operations have replaced the word “stockholder” with “stakeholder,” meaning to include employees, customers, suppliers and the wider community.

The emergence of business ethics is similar to other management disciplines. For example, organizations realized that they needed to manage a more positive image to the public and so the recent discipline of public relations was born. Organizations realized they needed to better manage their human resources and so the recent discipline of human resources was born. As commerce became more complicated and dynamic, organizations realized they needed more guidance to ensure their dealings supported the common good and did not harm others — and so business ethics was born.

Note that 90% of business schools now provide some form of training in business ethics. Today, ethics in the workplace can be managed through use of codes of ethics, codes of conduct, roles of ethicists and ethics committees, policies and procedures, procedures to resolve ethical dilemmas, ethics training, etc.

10 Myths About Business Ethics

Business ethics in the workplace is about prioritizing moral values for the workplace and ensuring behaviors are aligned with those values — it’s values management. Yet, myths abound about business ethics. Some of these myths arise from general confusion about the notion of ethics. Other myths arise from narrow or simplistic views of ethical dilemmas.
1. Myth: Business ethics is more a matter of religion than management.
Diane Kirrane, in “Managing Values: A Systematic Approach to Business Ethics,” (Training and Development Journal, November 1990), asserts that “altering people’s values or souls isn’t the aim of an organizational ethics program — managing values and conflict among them is …”
2. Myth: Our employees are ethical so we don’t need attention to business ethics.
Most of the ethical dilemmas faced by managers in the workplace are highly complex. Wallace explains that one knows when they have a significant ethical conflict when there is presence of
a) significant value conflicts among differing interests, b) real alternatives that are equality justifiable, and c) significant consequences on “stakeholders” in the situation. Kirrane mentions that when the topic of business ethics comes up, people are quick to speak of the Golden Rule, honesty and courtesy. But when presented with complex ethical dilemmas, most people realize there’s a wide “gray area” when trying to apply ethical principles.
3. Myth: Business ethics is a discipline best led by philosophers, academics and theologians.
Lack of involvement of leaders and managers in business ethics literature and discussions has led many to believe that business ethics is a fad or movement, having little to do with the day-to-day realities of running an organization. They believe business ethics is primarily a complex philosophical debate or a religion. However, business ethics is a management discipline with a programmatic approach that includes several practical tools. Ethics management programs have practical applications in other areas of management areas, as well. (These applications are listed later on in this document.)
4. Myth: Business ethics is superfluous — it only asserts the obvious: “do good!”
Many people react that codes of ethics, or lists of ethical values to which the organization aspires, are rather superfluous because they represent values to which everyone should naturally aspire. However, the value of a codes of ethics to an organization is its priority and focus regarding certain ethical values in that workplace. For example, it’s obvious that all people should be honest. However, if an organization is struggling around continuing occasions of deceit in the workplace, a priority on honesty is very timely — and honesty should be listed in that organization’s code of ethics. Note that a code of ethics is an organic instrument that changes with the needs of society and the organization.
5. Myth: Business ethics is a matter of the good guys preaching to the bad guys.
Some writers do seem to claim a moral high ground while lamenting the poor condition of business and its leaders. However, those people well versed in managing organizations realize that good people can take bad actions, particularly when stressed or confused. (Stress or confusion are not excuses for unethical actions — they are reasons.) Managing ethics in the workplace includes all of us working together to help each other remain ethical and to work through confusing and stressful ethical dilemmas.
6. Myth: Business ethics in the new policeperson on the block.
Many believe business ethics is a recent phenomenon because of increased attention to the topic in popular and management literature. However, business ethics was written about even 2,000 years ago — at least since Cicero wrote about the topic in his On Duties. Business ethics has gotten more attention recently because of the social responsibility movement that started in the 1960s.
7. Myth: Ethics can’t be managed.
Actually, ethics is always “managed” — but, too often, indirectly. For example, the behavior of the organization’s founder or current leader is a strong moral influence, or directive if you will, on behavior or employees in the workplace. Strategic priorities (profit maximization, expanding marketshare, cutting costs, etc.) can be very strong influences on morality. Laws, regulations and rules directly influence behaviors to be more ethical, usually in a manner that improves the general good and/or minimizes harm to the community. Some are still skeptical about business ethics, believing you can’t manage values in an organization. Donaldson and Davis (Management Decision, V28, N6) note that management, after all, is a value system. Skeptics might consider the tremendous influence of several “codes of ethics,” such as the “10 Commandments” in Christian religions or the U.S. Constitution. Codes can be very powerful in smaller “organizations” as well.
8. Myth: Business ethics and social responsibility are the same thing.
The social responsibility movement is one aspect of the overall discipline of business ethics. Madsen and Shafritz refine the definition of business ethics to be: 1) an application of ethics to the corporate community, 2) a way to determine responsibility in business dealings, 3) the identification of important business and social issues, and 4) a critique of business. Items 3 and 4 are often matters of social responsibility. (There has been a great deal of public discussion and writing about items 3 and 4. However, there needs to be more written about items 1 and 2, about how business ethics can be managed.) Writings about social responsibility often do not address practical matters of managing ethics in the workplace, e.g., developing codes, updating polices and procedures, approaches to resolving ethical dilemmas, etc.

9. Myth: Our organization is not in trouble with the law, so we’re ethical.
One can often be unethical, yet operate within the limits of the law, e.g., withhold information from superiors, fudge on budgets, constantly complain about others, etc. However, breaking the law often starts with unethical behavior that has gone unnoticed. The “boil the frog” phenomena is a useful parable here: If you put a frog in hot water, it immediately jumps out. If you put a frog in cool water and slowly heat up the water, you can eventually boil the frog. The frog doesn’t seem to notice the adverse change in its environment.
10. Myth: Managing ethics in the workplace has little practical relevance.
Managing ethics in the workplace involves identifying and prioritizing values to guide behaviors in the organization, and establishing associated policies and procedures to ensure those behaviors are conducted. One might call this “values management.” Values management is also highly important in other management practices, e.g., managing diversity, Total Quality Management and strategic planning.

10 Benefits of Managing Ethics in the Workplace

Many people are used to reading or hearing of the moral benefits of attention to business ethics. However, there are other types of benefits, as well. The following list describes various types of benefits from managing ethics in the workplace.

1. Attention to business ethics has substantially improved society.
A matter of decades ago, children in our country worked 16-hour days. Workers’ limbs were torn off and disabled workers were condemned to poverty and often to starvation. Trusts controlled some markets to the extent that prices were fixed and small businesses choked out. Price fixing crippled normal market forces. Employees were terminated based on personalities. Influence was applied through intimidation and harassment. Then society reacted and demanded that businesses place high value on fairness and equal rights. Anti-trust laws were instituted. Government agencies were established. Unions were organized. Laws and regulations were established.

2. Ethics programs help maintain a moral course in turbulent times.
As noted earlier in this document, Wallace and Pekel explain that attention to business ethics is critical during times of fundamental change — times much like those faced now by businesses, both nonprofit or for-profit. During times of change, there is often no clear moral compass to guide leaders through complex conflicts about what is right or wrong. Continuing attention to ethics in the workplace sensitizes leaders and staff to how they want to act — consistently.

3. Ethics programs cultivate strong teamwork and productivity.
Ethics programs align employee behaviors with those top priority ethical values preferred by leaders of the organization. Usually, an organization finds surprising disparity between its preferred values and the values actually reflected by behaviors in the workplace. Ongoing attention and dialogue regarding values in the workplace builds openness, integrity and community — critical ingredients of strong teams in the workplace. Employees feel strong alignment between their values and those of the organization. They react with strong motivation and performance.

4. Ethics programs support employee growth and meaning.
Attention to ethics in the workplace helps employees face reality, both good and bad — in the organization and themselves. Employees feel full confidence they can admit and deal with whatever comes their way. Bennett, in his article “Unethical Behavior, Stress Appear Linked” (Wall Street Journal, April 11, 1991, p. B1), explained that a consulting company tested a range of executives and managers. Their most striking finding: the more emotionally healthy executives, as measured on a battery of tests, the more likely they were to score high on ethics tests.

5. Ethics programs are an insurance policy — they help ensure that policies are legal.
There is an increasing number of lawsuits in regard to personnel matters and to effects of an organization’s services or products on stakeholders. As mentioned earlier in this document, ethical principles are often state-of-the-art legal matters. These principles are often applied to current, major ethical issues to become legislation. Attention to ethics ensures highly ethical policies and procedures in the workplace. It’s far better to incur the cost of mechanisms to ensure ethical practices now than to incur costs of litigation later. A major intent of well-designed personnel policies is to ensure ethical treatment of employees, e.g., in matters of hiring, evaluating, disciplining, firing, etc. Drake and Drake (California Management Review, V16, pp. 107-123) note that “an employer can be subject to suit for breach of contract for failure to comply with any promise it made, so the gap between stated corporate culture and actual practice has significant legal, as well as ethical implications.”

6. Ethics programs help avoid criminal acts “of omission” and can lower fines.
Ethics programs tend to detect ethical issues and violations early on so they can be reported or addressed. In some cases, when an organization is aware of an actual or potential violation and does not report it to the appropriate authorities, this can be considered a criminal act, e.g., in business dealings with certain government agencies, such as the Defense Department. The recent Federal Sentencing Guidelines specify major penalties for various types of major ethics violations. However, the guidelines potentially lowers fines if an organization has clearly made an effort to operate ethically.

7. Ethics programs help manage values associated with quality management, strategic planning and diversity management — this benefit needs far more attention.
Ethics programs identify preferred values and ensuring organizational behaviors are aligned with those values. This effort includes recording the values, developing policies and procedures to align behaviors with preferred values, and then training all personnel about the policies and procedures. This overall effort is very useful for several other programs in the workplace that require behaviors to be aligned with values, including quality management, strategic planning and diversity management. Total Quality Management includes high priority on certain operating values, e.g., trust among stakeholders, performance, reliability, measurement, and feedback. Eastman and Polaroid use ethics tools in their quality programs to ensure integrity in their relationships with stakeholders. Ethics management techniques are highly useful for managing strategic values, e.g., expand marketshare, reduce costs, etc. McDonnell Douglas integrates their ethics programs into their strategic planning process. Ethics management programs are also useful in managing diversity. Diversity is much more than the color of people’s skin — it’s acknowledging different values and perspectives. Diversity programs require recognizing and applying diverse values and perspectives — these activities are the basis of a sound ethics management program.

8. Ethics programs promote a strong public image.
Attention to ethics is also strong public relations — admittedly, managing ethics should not be done primarily for reasons of public relations. But, frankly, the fact that an organization regularly gives attention to its ethics can portray a strong positive to the public. People see those organizations as valuing people more than profit, as striving to operate with the utmost of integrity and honor. Aligning behavior with values is critical to effective marketing and public relations programs. Consider how Johnson and Johnson handled the Tylenol crisis versus how Exxon handled the oil spill in Alaska. Bob Dunn, President and CEO of San Francisco-based Business for Social Responsibility, puts it best: “Ethical values, consistently applied, are the cornerstones in building a commercially successful and socially responsible business.”

9. Overall benefits of ethics programs:
Donaldson and Davis, in “Business Ethics? Yes, But What Can it Do for the Bottom Line?” (Management Decision, V28, N6, 1990) explain that managing ethical values in the workplace legitimizes managerial actions, strengthens the coherence and balance of the organization’s culture, improves trust in relationships between individuals and groups, supports greater consistency in standards and qualities of products, and cultivates greater sensitivity to the impact of the enterprise’s values and messages.

10. Last – and most — formal attention to ethics in the workplace is the right thing to do.

One Description of a Highly Ethical Organization

Mark Pastin, in The Hard Problems of Management: Gaining the Ethics Edge (Jossey-Bass, 1986), provides the following four principles for highly ethical organizations:
1. They are at ease interacting with diverse internal and external stakeholder groups. The groundrules of these firms make the good of these stakeholder groups part of the organizations’ own good.

2. They are obsessed with fairness. Their groundrules emphasize that the other persons’ interests count as much as their own.

3. Responsibility is individual rather than collective, with individuals assuming personal responsibility for actions of the organization. These organizations’ groundrules mandate that individuals are responsible to themselves.
4. They see their activities in terms of purpose. This purpose is a way of operating that members of the organization highly value. And purpose ties the organization to its environment.

Doug Wallace asserts the following characteristics of a high integrity organization:
1. There exists a clear vision and picture of integrity throughout the organization.
2. The vision is owned and embodied by top management, over time.
3. The reward system is aligned with the vision of integrity.
4. Policies and practices of the organization are aligned with the vision; no mixed messages.
5. It is understood that every significant management decision has ethical value dimensions.
6. Everyone is expected to work through conflicting-stakeholder value perspectives.

Ethics Management Programs: An Overview

About Ethics Management Programs Organizations can manage ethics in their workplaces by establishing an ethics management program. Brian Schrag, Executive Secretary of the Association for Practical and Professional Ethics, clarifies. “Typically, ethics programs convey corporate values, often using codes and policies to guide decisions and behavior, and can include extensive training and evaluating, depending on the organization. They provide guidance in ethical dilemmas.” Rarely are two programs alike.

“All organizations have ethics programs, but most do not know that they do,” wrote business ethics professor Stephen Brenner in the Journal of Business Ethics (1992, V11, pp. 391-399). “A corporate ethics program is made up of values, policies and activities which impact the propriety of organization behaviors.”

Bob Dunn, President and CEO of San Francisco-based Business for Social Responsibility, adds: “Balancing competing values and reconciling them is a basic purpose of an ethics management program. Business people need more practical tools and information to understand their values and how to manage them.”

Benefits of Managing Ethics as a Program

There are numerous benefits in formally managing ethics as a program, rather than as a one-shot effort when it appears to be needed. Ethics programs:
· Establish organizational roles to manage ethics
· Schedule ongoing assessment of ethics requirements
· Establish required operating values and behaviors
· Align organizational behaviors with operating values

· Develop awareness and sensitivity to ethical issues
· Integrate ethical guidelines to decision making
· Structure mechanisms to resolving ethical dilemmas
· Facilitate ongoing evaluation and updates to the program

· Help convince employees that attention to ethics is not just a knee-jerk reaction done to get out of trouble or improve public image

8 Guidelines for Managing Ethics in the Workplace

The following guidelines ensure the ethics management program is operated in a meaningful fashion:
1. Recognize that managing ethics is a process.
Ethics is a matter of values and associated behaviors. Values are discerned through the process of ongoing reflection. Therefore, ethics programs may seem more process-oriented than most management practices. Managers tend to be skeptical of process-oriented activities, and instead prefer processes focused on deliverables with measurements. However, experienced managers realize that the deliverables of standard management practices (planning, organizing, motivating, controlling) are only tangible representations of very process-oriented practices. For example, the process of strategic planning is much more important than the plan produced by the process. The same is true for ethics management. Ethics programs do produce deliverables, e.g., codes, policies and procedures, budget items, meeting minutes, authorization forms, newsletters, etc. However, the most important aspect from an ethics management program is the process of reflection and dialogue that produces these deliverables.

2. The bottom line of an ethics program is accomplishing preferred behaviors in the workplace.
As with any management practice, the most important outcome is behaviors preferred by the organization. The best of ethical values and intentions are relatively meaningless unless they generate fair and just behaviors in the workplace. That’s why practices that generate lists of ethical values, or codes of ethics, must also generate policies, procedures and training that translate those values to appropriate behaviors.

3. The best way to handle ethical dilemmas is to avoid their occurrence in the first place.
That’s why practices such as developing codes of ethics and codes of conduct are so important. Their development sensitizes employees to ethical considerations and minimize the chances of unethical behavior occurring in the first place.

4. Make ethics decisions in groups, and make decisions public, as appropriate.
This usually produces better quality decisions by including diverse interests and perspectives, and increases the credibility of the decision process and outcome by reducing suspicion of unfair bias.

5. Integrate ethics management with other management practices.
When developing the values statement during strategic planning, include ethical values preferred in the workplace. When developing personnel policies, reflect on what ethical values you’d like to be most prominent in the organization’s culture and then design policies to produce these behaviors.

6. Use cross-functional teams when developing and implementing the ethics management program.
It’s vital that the organization’s employees feel a sense of participation and ownership in the program if they are to adhere to its ethical values. Therefore, include employees in developing and operating the program.

7. Value forgiveness.
This may sound rather religious or preachy to some, but it’s probably the most important component of any management practice. An ethics management program may at first actually increase the number of ethical issues to be dealt with because people are more sensitive to their occurrence. Consequently, there may be more occasions to address people’s unethical behavior. The most important ingredient for remaining ethical is trying to be ethical. Therefore, help people recognize and address their mistakes and then support them to continue to try operate ethically.

8. Note that trying to operate ethically and making a few mistakes is better than not trying at all.
Some organizations have become widely known as operating in a highly ethical manner, e.g., Ben and Jerrys, Johnson and Johnson, Aveda, Hewlett Packard, etc. Unfortunately, it seems that when an organization achieves this strong public image, it’s placed on a pedestal by some business ethics writers. All organizations are comprised of people and people are not perfect. However, when a mistake is made by any of these organizations, the organization has a long way to fall. In our increasingly critical society, these organizations are accused of being hypocritical and they are soon pilloried by social critics. Consequently, some leaders may fear sticking their necks out publicly to announce an ethics management program. This is extremely unfortunate. It’s the trying that counts and brings peace of mind — not achieving an heroic status in society.

6 Key Roles and Responsibilities in Ethics Management

Depending on the size of the organization, certain roles may prove useful in managing ethics in the workplace. These can be full-time roles or part-time functions assumed by someone already in the organization. Small organizations certainly will not have the resources to implement each the following roles using different people in the organization. However, the following functions points out responsibilities that should be included somewhere in the organization.
1. The organization’s chief executive must fully support the program.
If the chief executive isn’t fully behind the program, employees will certainly notice — and this apparent hypocrisy may cause such cynicism that the organization may be worse off than having no formal ethics program at all. Therefore, the chief executive should announce the program, and champion its development and implementation. Most important, the chief executive should consistently aspire to lead in an ethical manner. If a mistake is made, admit it.

2. Consider establishing an ethics committee at the board level.
The committee would be charged to oversee development and operation of the ethics management program.

3. Consider establishing an ethics management committee.
It would be charged with implementing and administrating an ethics management program, including administrating and training about policies and procedures, and resolving ethical dilemmas. The committee should be comprised of senior officers.

4. Consider assigning/developing an ethics officer.
This role is becoming more common, particularly in larger and more progressive organizations. The ethics officer is usually trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas.

5. Consider establishing an ombudsperson.
The ombudsperson is responsible to help coordinate development of the policies and procedures to institutionalize moral values in the workplace. This position usually is directly responsible for resolving ethical dilemmas by interpreting policies and procedures.

6. Note that one person must ultimately be responsible for managing the ethics management program.

Ethics Tools: Codes of Ethics

About Codes of Ethics

According to Wallace, “A credo generally describes the highest values to which the company aspires to operate. It contains the `thou shalts.’ A code of ethics specifies the ethical rules of operation. It’s the `thou shalt nots.” In the latter 1980s, The Conference Board, a leading business membership organization, found that 76% of corporations surveyed had codes of ethics.

Some business ethicists disagree that codes have any value. Usually they explain that too much focus is put on the codes themselves, and that codes themselves are not influential in managing ethics in the workplace. Many ethicists note that it’s the developing and continuing dialogue around the code’s values that is most important.

Occasionally, employees react to codes with suspicion, believing the values are “motherhood and apple pie” and codes are for window dressing. But, when managing a complex issue, especially in a crisis, having a code is critical. More important, it’s having developed a code. In the mid-70s, Johnson and Johnson updated their credo in a series of challenge meetings. Bob Kniffin, Vice President of External Affairs, explains, “We pored over each phrase and word. We asked ourselves, `Do we still believe this?’ Our meetings resulted in some fine tuning, but basically we didn’t change the values. The meetings infused the values in the minds of all of us managers.” Many believe this process guided them in their well-known decision to pull Tylenol bottles off the shelves and repackage them at a $100 million expense. Kniffin offers some sound, practical advice. “In a crisis, there’s no time for moral conclusions. Get those done beforehand. But also realize there’s no substitute for sound crisis management. For example, have a list of people with fundamental knowledge, such as who transports your products where and when.”

Developing Codes of Ethics

Note that if your organization is quite large, e.g., includes several large programs or departments, you may want to develop an overall corporate code of ethics and then a separate code to guide each of your programs or departments.

Also note that codes should not be developed out of the Human Resource or Legal departments alone, as is too often done. Codes are insufficient if intended only to ensure that policies are legal. All staff must see the ethics program being driven by top management.

Note that codes of ethics and codes of conduct may be the same in some organizations, depending on the organization’s culture and operations and on the ultimate level of specificity in the code(s).

Optional: Also see in the Free Management Library at https://staging.management.org:

1. Organizational Culture – review to get a basic understanding of “personalities” of organizations
2. Strategic Planning – specific to developing a Values Statement
3. Diversity and Inclusion– to consider that there are other values and perspectives

Consider the following guidelines when developing codes of ethics:

1. Review any values need to adhere to relevant laws and regulations;
this ensures your organization is not (or is not near) breaking any of them. (If you are breaking any of them, you may be far better off to report this violation than to try hide the problem. Often, a reported violation generates more leniency than outside detection of an unreported violation, particularly per the new Federal Sentencing Guidelines.) Increase priority on values that will help your organization operate to avoid breaking these laws and to follow necessary regulations.

2. Review which values produce the top three or four traits of a highly ethical and successful product or service in your area,
e.g., for accountants: objectivity, confidentiality, accuracy, etc. Identify which values produce behaviors that exhibit these traits.

3. Identify values needed to address current issues in your workplace.
Appoint one or two key people to interview key staff to collect descriptions of major issues in the workplace. Collect descriptions of behaviors that produce the issues. Consider which of these issues is ethical in nature, e.g.., issues in regard to respect, fairness and honesty. Identify the behaviors needed to resolve these issues. Identify which values would generate those preferred behaviors. There may be values included here that some people would not deem as moral or ethical values, e.g., team-building and promptness, but for managers, these practical values may add more relevance and utility to a code of ethics.

4. Identify any values needed, based on findings during strategic planning.
Review information from your SWOT analysis (identifying the organization’s strengths, weaknesses, opportunities and threats). What behaviors are needed to build on strengths, shore up weaknesses, take advantage of opportunities and guard against threats?

5. Consider any top ethical values that might be prized by stakeholders.
For example, consider expectations of employees, clients/customers, suppliers, funders, members of the local community, etc.

6. Collect from the above steps, the top five to ten ethical values which are high priorities in your organization (see item #7 below for examples).

7. Examples of ethical values might include
(the following list is the “Six Pillars of Character” developed by The Josephson Institute of Ethics, 310-306-1868):
a) Trustworthiness: honesty, integrity, promise-keeping, loyalty
b) Respect: autonomy, privacy, dignity, courtesy, tolerance, acceptance
c) Responsibility: accountability, pursuit of excellence
d) Caring: compassion, consideration, giving, sharing, kindness, loving
e) Justice and fairness: procedural fairness, impartiality, consistency, equity, equality, due process
f) Civic virtue and citizenship: law abiding, community service, protection of environment

8. Compose your code of ethics; attempt to associate with each value, two example behaviors which reflect each value.
Critics of codes of ethics assert that they seem vacuous because many only list ethical values and don’t clarify these values by associating examples of behaviors.

9. Include wording that indicates all employees are expected to conform to the values stated in the code of ethics.
Add wording that indicates where employees can go if they have any questions.

10. Obtain review from key members of the organization.
Get input from as many members as possible.

11. Announce and distribute the new code of ethics (unless you are waiting to announce it along with any new codes of conduct and associated policies and procedures).
Ensure each employee has a copy and post codes throughout the facility.

12. Update the code at least once a year.
As stated several times in this document, the most important aspect of codes is developing them, not the code itself. Continued dialogue and reflection around ethical values produces ethical sensitivity and consensus. Therefore, revisit your codes at least once a year — preferably two or three times a year.

13. (Note that you cannot include values and preferred behaviors for every possible ethical dilemma that might arise.
Your goal is to focus on the top ethical values needed in your organization and to avoid potential ethical dilemmas that seem mostly likely to occur.)

Ethics Tools: Codes of Conduct

About Codes of Conduct

“Codes of conduct specify actions in the workplace and codes of ethics are general guides to decisions about those actions,” explains Craig Nordlund, Associate General Counsel and Secretary at Hewlett Packard. He suggests that codes of conduct contain examples of appropriate behavior to be meaningful.
The Conference Board found that codes of conduct are increasingly sophisticated and focused at lower levels in companies. Departments frequently have their own codes. Be careful, though. An organization
could be sued for breach of contract if its practices are not in accord with its policies. That’s why legal departments should review codes of conduct and other ethics policies. Also, that’s why it’s critical for organizations to review their policies at least once a year to ensure they are in accordance with laws and regulations.

Optional: also see in the Free Management Library at https://staging.management.org:

1. Employee Law – review major issues and topics to discern what behaviors to avoid in the workplace
2. Policies (Personnel) – review more specifics about what behaviors to avoid

Developing a Code of Conduct

Note that if your organization is quite large, e.g., includes several large programs or departments, you may want to develop an overall corporate code of conduct, and then a separate code to guide each of your programs or departments. Consider the following guidelines when developing codes of conduct:
1. Identify key behaviors needed to adhere to the ethical values proclaimed in your code of ethics, including ethical values derived from review of key laws and regulations, ethical behaviors needed in your product or service area, behaviors to address current issues in your workplace, and behaviors needed to reach strategic goals.
2. Include wording that indicates all employees are expected to conform to the behaviors specified in the code of conduct.
Add wording that indicates where employees can go if they have any questions.
3. Obtain review from key members of the organization.
Be sure your legal department reviews the drafted code of conduct.
4. Announce and distribute the new code of conduct
(unless you are waiting to announce it along with any associated policies and procedures). Ensure each employee has a copy and post codes in each employee’s bay or office.
5. (Note that you cannot include preferred behaviors for every possible ethical dilemma that might arise.)
6. Examples of topics typically addressed by codes of conduct include:
preferred style of dress, avoiding illegal drugs, following instructions of superiors, being reliable and prompt, maintaining confidentiality, not accepting personal gifts from stakeholders as a result of company role, avoiding racial or sexual discrimination, avoiding conflict of interest, complying with laws and regulations, not using organization’s property for personal use, not discriminating against race or age or sexual orientation, and reporting illegal or questionable activity. Go beyond these traditional legalistic expectations in your codes — adhere to what’s ethically sensitive in your organization, as well. (Note that, as with codes of ethics, you may be better off to generate your own code of conduct from scratch rather than reviewing examples from other organizations.)

Ethics Tools: Policies and Procedures

Optional: also see in the Free Management Library at https://staging.management.org:
Policies (Personnel) – review to understand how to develop and apply personnel policies

1. Update policies and procedures to produce behaviors preferred from the code of conduct,
including, e.g., personnel, job descriptions, performance appraisal forms, management-by-objectives expectations, standard forms, checklists, budget report formats, and other relevant control instruments to ensure conformance to the code of conduct. In doing so, try to avoid creating ethical dilemmas such as conflicts-of-interest or infringing on employee’s individual rights.

2. There are numerous examples of how organizations manage values through use of policies and procedures.
For example, we’re most familiar with the value of social responsibility. To produce behavior aligned with this value, organizations often institute policies such as recycling waste, donating to local charities, or paying employees to participate in community events. In another example, a high value on responsiveness to customers might be implemented by instituting policies to return phone calls or to repair defective equipment within a certain period of time. Consider the role of job descriptions and performance appraisals. For example, an advanced technology business will highly value technical knowledge, creativity and systems thinking. They use job descriptions and performance appraisals to encourage behaviors aligned with these values, such as rewarding advanced degrees, patents, and analysis and design skills.

3. Include policies and procedures to address ethical dilemmas.
See the next section, “Ethics Tools: Resolving Ethical Dilemmas,” to select a method which is most appropriate to your organization’s culture and operations.

4. Include policies and procedures to ensure training of employees about the ethics management program.
See a following section, “Ethics Tools: Training.”

5. Include policies and procedures to reward ethical behavior and impose consequences for unethical behavior.

6. Include a grievance policy for employees to use to resolve disagreements with supervisors and staff.

7. Consider establishing an ethics “hotline.”
This function might best be provided by an outside consultant, e.g., lawyer, clergyperson, etc. Or, provide an anonymous “tip” box in which personnel can report suspected unethical activities, and do so safely on an anonymous basis.

8. Once a year, review all personnel policies and procedures.
If yours is a small organization, consider including all staff during this review. Take a full day for all staff to review policies and procedures, and suggest changes.

9. For guidance in establishing personnel policies, see the

Guide to Personnel Management and Policies (https://staging.management.org/management/guidebook.htm).

Ethics Tools: Resolving Ethical Dilemmas (with Real-to-Life
Examples)

Definition of an Ethical Dilemma

Perhaps too often, business ethics is portrayed as a matter of resolving conflicts in which one option appears to be the clear choice. For example, case studies are often presented in which an employee is faced with whether or not to lie, steal, cheat, abuse another, break terms of a contract, etc. However, ethical dilemmas faced by managers are often more real-to-life and highly complex with no clear guidelines, whether in law or often in religion.

As noted earlier in this document, Doug Wallace, Twin Cities-based consultant, explains that one knows when they have a significant ethical conflict when there is presence of a) significant value conflicts among differing interests, b) real alternatives that are equality justifiable, and c) significant consequences on “stakeholders” in the situation.

An ethical dilemma exists when one is faced with having to make a choice among these alternatives.

Real-to-Life Examples of Complex Ethical Dilemmas

· “A customer (or client) asked for a product (or service) from us today. After telling him our price, he said he couldn’t afford it. I know he could get it cheaper from a competitor. Should I tell him about the competitor — or let him go without getting what he needs? What should I do?”
· “Our company prides itself on its merit-based pay system. One of my employees has done a tremendous job all year, so he deserves strong recognition. However, he’s already paid at the top of the salary range for his job grade and our company has too many people in the grade above him, so we can’t promote him. What should I do?”
· “Our company prides itself on hiring minorities. One Asian candidate fully fits the job requirements for our open position. However, we’re concerned that our customers won’t understand his limited command of the English language. What should I do?”
· “My top software designer suddenly refused to use our e-mail system. He explained to me that, as a Christian, he could not use a product built by a company that provided benefits to the partners of homosexual employees. He’d basically cut himself off from our team, creating a major obstacle to our product development. What should I do?”
· “My boss told me that one of my employees is among several others to be laid off soon, and that I’m not to tell my employee yet or he might tell the whole organization which would soon be in an uproar. Meanwhile, I heard from my employee that he plans to buy braces for his daughter and a new carpet for his house. What should I do?”
· “My computer operator told me he’d noticed several personal letters printed from a computer that I was responsible to manage. While we had no specific policies then against personal use of company facilities, I was concerned. I approached the letter writer to discuss the situation. She told me she’d written the letters on her own time to practice using our word processor. What should I do?”
· “A fellow employee told me that he plans to quit the company in two months and start a new job which has been guaranteed to him. Meanwhile, my boss told me that he wasn’t going to give me a new opportunity in our company because he was going to give it to my fellow employee now. What should I do?”

Optional: also see in the Free Management Library at https://staging.management.org:

1. Feedback
2. Listening
3. Questioning
4. Conflict (interpersonal)
5. Negotiating
6. Diversity and Inclusion Diversity and Inclusion

3 Methods to Resolve Ethical Dilemmas

Organizations should develop and document a procedure for dealing with ethical dilemmas as they arise. Ideally, ethical dilemmas should be resolved by a group within the organization, e.g., an ethics committee comprised of top leaders/managers and/or members of the board. Consider having staff members on the committee, as well. The following three methods can be used to address ethical dilemmas. Methods include an ethical checklist, a ten-step method and a list of key questions. (Note that The Golden Rule is probably the most common method to resolve ethical dilemmas. The rule exists in various forms in many of the world religions.)

Method One – Ethical Checklist

Twin Cities-based consultants, Doug Wallace and Jon Pekel, suggest the following ethical checklist to address ethical dilemmas. If necessary, revise your decision and action plan based on results of the this test.

NOTE: To get the longer version of this document, see
Ten-Step Method for Ethical Decision-Making

Ethical Checklist Circle the appropriate answer on the scale; “1” = not at all; “5” = totally yes
1. Relevant Information Test. Have I/we obtained as much information as possible to make an informed decision and action plan for this situation? 1 2 3 4 5
2. Involvement Test. Have I/we involved all who have a right to have input and/or to be involved in making this decision and action plan? 1 2 3 4 5
3. Consequential Test. Have I/we anticipated and attempted to accommodate for the consequences of this decision and action plan on any who are significantly effected by it? 1 2 3 4 5
4. Fairness Test. If I/we were assigned to take the place of any one of the stakeholders in this situation, would I/we perceive this decision and action plan to be essentially fair, given all of the circumstances? 1 2 3 4 5
5. Enduring Values Test. Do this decision and action plan uphold my/our priority enduring values that are relevant to this situation? 1 2 3 4 5
6. Universality Test. Would I/we want this decision and action plan to become a universal law applicable to all similar situation, even to myself/ourselves? 1 2 3 4 5
7. Light-of-Day Test. How would I/we feel and be regarded by others (working associates, family, etc.) if the details of this decision and action plan were disclosed for all to know? 1 2 3 4 5
8. Total Ethical Analysis Confidence Score . Place the total of all circled numbers here.
How confident can you be that you have done a good job of ethical analysis?
7-14
15-21
22-28
29-35
Not very confident
Somewhat confident
Quite confident
Very confident

Used with permission from Copyright holders: Doug Wallace and Jon Pekel, Twin Cities-based consultants in the Fulcrum Group (651-714-9033; e-mail at jonpekel@atti.com). Do not copy without reference to copyright owners. Not to be used for commercial purposes.

Method Two – Ten-Step Method of Decision Making

Wallace and Pekel also provide the following ten-step method.
10 Step Method (Short Version)

Used with permission from Copyright holders: Doug Wallace and Jon Pekel, Twin Cities-based consultants in the Fulcrum Group (651-714-9033; e-mail at jonpekel@comcast.net). Do not copy without reference to copyright owners. Not to be used for commercial purposes.

Method Three – Twelve Questions to Address Ethical Dilemmas

Laura L. Nash poses 12 questions to help managers address ethical dilemmas.
1. Have you defined the problem accurately?
2. How would you define the problem if you stood on the other side of the fence?
3. How did this situation occur in the first place?
4. To whom and to what do you give your loyalty as a person and as a member of the corporation?
5. What is your intention in making this decision?
6. How does this intention compare with the probable results?
7. Whom could your decision or action injure?
8. Can you discuss the problem with the affected parties before you make your decision?
9. Are you confident that your position will be as valid over
a long period of time as it seem now?
10. Could you disclose without qualm your decision or action to your boss, your CEO, the board of directors, your family, society as a whole?
11. What is the symbolic potential of your action if understood? misunderstood?
12. Under what conditions would you allow exceptions to your stand?

(adapted from: Nash, L. (1981). Ethics Without the Sermon. Harvard Business Review, (59))

Ethics Tools: Training

The ethics program is essentially useless unless all staff members are trained about what it is, how it works and their roles in it. The nature of the system may invite suspicion if not handled openly and honestly. In addition, no matter how fair and up-to-date is a set of policies, the legal system will often interpret employee behavior (rather than written policies) as de facto policy. Therefore, all staff must be aware of and act in full accordance with policies and procedures (this is true, whether policies and procedures are for ethics programs or personnel management). This full accordance requires training about policies and procedures.

Optional: Also see in the Free Management Library at https://staging.management.org
Training Basics for Supervisors and Learners

1. Orient new employees to the organization’s ethics program during new-employee orientation.
2. Review the ethics management program in management training experiences.
3. Involving staff in review of codes is strong ethics training.
4. Involving staff in review of policies (ethics and personnel policies) is strong ethics training.
5. One of the strongest forms of ethics training is practice in resolving complex ethical dilemmas. Have staff use any of the three ethical-dilemma-resolution methods in this guidebook and apply them to any of the real-to-life ethical dilemmas also listed in this guidebook.
6. Include ethical performance as a dimension in performance appraisals.
7. The best ethics trainer: Bill Goodman, Chief Human Resource Officer at Aveda, describes, “We start our training even in our job ads,” then adds, “but the best trainer is the behavior of our leaders.”
8. Give all staff a copy of this free “Complete Guide to Ethics Management.”

About the Author

Carter McNamara, MBA, PhD, is a Twin Cities-based consultant in the areas of leadership development, board development and strategic planning. He has managed in a wide variety of organizations including startup, public-private, small and large nonprofit, and large corporation. He received comprehensive ethics training as an employee in a large defense contractor, various ethics classes and continuing research in business ethics. In addition, as a manager, he has struggled through several major ethical dilemmas (one was quite public) so he knows and understands the experience. He has led development of several codes of ethics and conduct, as well. Carter holds a BA in Social and Behavioral Sciences, BS in Computer Science, an MBA, and a PhD in Human and Organization Development.

Bibliography of Practical Resources

Hardcopy documents:

The following references are to hardcopy documents that provide information about managing ethics in the workplace:

Berenbeim, R. E. (1992, Spring). “The Corporate Ethics Test”. Business and Society Review, 31(1), 77-80.

Brenner, S. N. (1992). “Ethics Programs and Their Dimensions”. Journal of Business Ethics, 11,391-399.

Buchholz, R. A. (1989). “Fundamental Concepts and Problems in Business Ethics”. In Madsen, P., & Shafritz, J. M. (Eds.) (1990). “Essentials of Business Ethics”. New York: Penguin Books.

Carroll, A. B. (1990). “Principles of Business Ethics: Their Role in Decision Making and in Initial Consensus”.
Management Decision, 28(8), 21-23.

Dean, P. J. (1992). “Making Codes of Ethics ‘Real’.” Journal of Business Ethics, 11, 285-290.

Deborah, B. (1991, January/February). “Asking for Help: A Guide to Using Socially Responsible Consultants”. Business Ethics Magazine, pp. 24-29.

Francis, David R. (1991, June). “Prevent Trouble by Improving Ethics”. Christian Science Monitor, p. 9.

Fulcrum Consulting Group, 1093 Snelling Ave. South, Saint Paul, MN 55116. Phone 1-800-55-ETHIC.

Gandz, J. & Bird, F. G. (1989, Autumn). “Designing Ethical Organizations”. Business Quarterly, 54(2), 108-112.

Genfan, H. (1987, November). “Formalizing Business Ethics”. Training and Development Journal, pp. 35-37.

Josephson Institute of Ethics, 310 Washington Boulevard, Suite 104, Marina del Rey, California. Phone 310-306-1868.

Kirrane, D.E. (1990, November). “Managing Values: A Systematic Approach to Business Ethics”. Training and Development Journal, pp. 53-60.

Madsen, P., Ph. D., & Shafritz, J. M., Ph. D. (Eds.). (1990). “Essentials of Business Ethics”. New York: Penguin Books.

McDonald, G., & Zepp, R. (1990). “What Should Be Done? A Practical Approach to Business Ethics”. Management Decision, 28(1), 9-13.

Nash, L. (1981). “Ethics Without the Sermon”. Harvard Business Review, (59).

Navran Associates Management Consultants, 3037 Wembley Ridge, Atlanta, GA. Phone 404-493-8886.

Reynolds, L. (1992, July/August). “The Ethics Audit. Business Ethics Magazine”, pp. 20-22.

Sims, R. R. (1991). “Institutionalization of Organizational Ethics”. Journal of Business Ethics, 10, 493-506.

Strong, K. C., & Meyer, G. (1992). “An Integrative Descriptive Model of Ethics Decision Making”. Journal of Business Ethics, 11, 89-94.

Thompson, T. (1991, Spring). “Managing Business Ethics”. Canadian Public Administration, 34(1), 153-157.

Toffler, B. (1991, Winter). “Doing Ethics: An Approach to Business Ethics Consulting”. Moral Education Forum, 16(4), 14-20.

World Wide Web Links:

The following are links to Websites about business ethics.

General business ethics resources at the Center for Applied Ethics (http://www.ethics.ubc.ca/resources/business/)

Center for Applied Ethics at http://www.ethics.ubc.ca/

Being All That We Can See


For the Category of Ethics:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.



Sample of a Board of Directors Committee Work Plan

A-team-leader-addressing-her-colleagues

Sample of a Board of Directors Committee Work Plan

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting,
LLC
. Also see Carter’s
Board Blog (for for-profits and nonprofits).

Vast majority of content
in this topic applies to for-profits and nonprofits. This book also covers this topic.

Developing, Operating and Restoring Your Nonprofit Board - Book Cover

One of the best ways to ensure effective board committees is
through use of a committee work plan. The plan specifies goals
for the committee, strategies to meet the goals and timelines
for completion of the goals. The goals of the committee should
be closely aligned with achieving the strategic goals determined
during strategic planning. Essentially, the work plans specify
the operational goals of the committee for the year.

A work plan is the plan that each Board committee and relevant
staff members reference to guide completion of their portion of
the organization’s strategic plan, e.g., the Finance Committee
works from Finance work plan, Marketing Committee from a Marketing
work plan, etc. The plan references the related goal(s) from the
strategic plan. Work plans include objectives that, in total,
implement the respective strategy. For example, the following
work plan describes two strategies, 3.1 and 3.2, which, together,
meet Goal 3 from the strategic plan. Each of the two strategies
has five objectives, including 1.1 to 1.5. (See Strategic
Planning
.)

The following sample represents one example of the format and
content of a work plan. This sample should be customized to the
particular culture and purpose of the organization.

Year 2011 Actions

Jan

Feb

Mar

Apr

May

Jun

Strategy 3.1: Develop Strategic Plan
3.1.1. recruit consultant help

3.1.2 planning with chief executive

3.1.3 draft first version of strategic plan

3.1.4 board review of plan

3.1.5 obtain board approval of plan

2000 Actions

Jul

Aug

Sep

Oct

Nov

Dec

Strategy 3.2: Implement Strategic Plan
Responsibility: Board
3.2.1. Reach strategic goal #1

3.2.2 Reach strategic goal #2

3.2.3 Reach strategic goal #3

3.2.4 Reach strategic goal #4

3.2.5 celebration!

Return to All About Boards


For the Category of Boards of Directors:

To round out your knowledge of this Library topic, you may
want to review some related topics, available from the link below.
Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been
selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books


Basic Guidelines and Sample Agenda for Board Training Session

Board member having a Meeting

Basic Guidelines and Sample Agenda for Board Training Session

Vast majority of content in this topic applies to for-profits and nonprofits. This book also covers this topic.

Developing, Operating and Restoring Your Nonprofit Board - Book Cover

© Copyright Carter McNamara, MBA, PhD

Learn More in the Library’s Blogs Related to Board Training

In addition to the articles on this current page, see the following blogs which have posts related to Board Training. Scan down the blog’s page to see various posts. Also see the section “Recent Blog Posts” in the sidebar of the blog or click on “next” near the bottom of a post in the blog.


Board training conveys the knowledge and understanding needed by board members in order to effectively carry out their roles as members of the organization’s board of directors. Selection of the particular training topics and training methods depend on the nature and needs of the organization. However, the following guidelines and sample agenda may prove useful to readers as they develop their own approach to board training.

Guidelines to Prepare Board Training

Regarding Timing of the Session

1. Conduct board training once a year, whether you have new board members or not. It’s amazing how the “basics” helps to ground and integrate the knowledge and understanding of even highly experienced board members. Recurring training also helps to ensure that board members are all “working from the same script”.

2. Conduct board training shortly after new members are elected to the board. This scheduling helps new members quickly gain understanding of their roles and contributions to the organization. This understanding often increases their participation and fulfillment regarding their roles as board members.

Who Should Be Involved in Planning the Session

3. Design of the board training should include at least the chief executive officer and board chair. Ideally, the organization also has a board development committee whose chair can provide strong participation in the training. If timing permits, discuss ideas with all board members to collect their feedback and review.

Selecting Topics and Materials for Board Training

4. Results of the board self-evaluation should be carefully considered when selecting training topics. For example, if the evaluation indicated the board members don’t understand their roles as board members, then ensure that training places strong focus on this topic during training.

5. Be sure to include review of the board manual in the training session. The manual is the key resource for members to collect, organize and reference resources needed to carry out their roles as board member. Members should take seriously their manual and the use of it.

6. Materials you’ll need often include:
a) Board manual (for an idea of contents to include in the manual, see Sample Board Manual Index)
b) Advertising and promotions materials about the organization and its programs
c) Copy of the most recent strategic plan

Members’ Preparation for Training

7. Provide the board training agenda, board manual and promotions materials to members at least two weeks before the meeting. Ask them to review the materials before the meeting.

NOTE: Many of the materials you may need for training and to present to members are included in the Free Toolkit for Boards in the Free Management Library.


Sample Agenda for Board Training Session

The following agenda should be modified by the organization to meet its own nature and needs. During review of the topics marked with an “*”, provide brief presentation about the topic and then provide time for open discussion and to address questions from participants.

Topic

Leader of This Section of Meeting

Length of Time (minutes)

Welcome Board chair
Review of agenda* Board chair
Introduction of participants Each person introduces themselves
Overview of organization* Executive director reviews mission, history, programs and introduces key staff
Orientation to board manual* Board chair
Roles and responsibilities of governing board* Board chair reviews overview of roles, role of chief executive,
and comparison of roles of board and staff
Overview of board structure Review listing of current officers, committees, and committee
chairs
Overview of board operations* Board chair reviews key points from bylaws and board policies, board operations calendar, sample committee work plans, and sample meeting agenda and minutes
Review of strategic plan* Board chair reviews format of plan, highlights from the plan
and key points about status of implementation of the plan
Administrative activities For example, set the schedule for next year’s board meetings, refine the board operations calendar, update the list of board members, etc.
Next steps Board chair poses reminders of upcoming activities and events
Meeting evaluation Board chair

Return to Free Complete Toolkit for Boards


For the Category of Boards of Directors:

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Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


Boards of Directors Staffing (Size, Joining, Recruiting, Informing, Communicating, Rewarding, Removing)

Elderly Women in a Business Meeting

Staffing (Size, Joining, Recruiting, Informing, Communicating,
Rewarding, Removing)

© Copyright Carter
McNamara, MBA, PhD, Authenticity Consulting, LLC
.

Vast majority of content
in this topic applies to for-profits and nonprofits. This book also covers this topic.

Developing, Operating and Restoring Your Nonprofit Board - Book Cover

One of the most important aspects of Board operations is Board
staffing. Just like the careful staffing that is usually done
with employees, Board members should be carefully selected, trained
and evaluated, as well. In for-profits, Board members and leaders
must appreciate the strong value that Boards can bring, rather
than tolerating Boards as if they are some necessary evil to be
avoided at all costs. In nonprofits, Board members and leaders
should not approach recruitment and selection as if they are somehow
lucky just to get Board members who will show up at Board meetings.
Board members and leaders in those organizations must act as if
they deserve a very dedicated and participative Board — that
attitude alone can make a huge difference in achieving highly
effective Boards.

There are different perspectives on staffing. Some people believe
that Boards should be staffed primarily with the expertise needed
to establish and achieve current strategic goals (this is functional
staffing). Others believe that staffing should also achieve a
wide diversity of values and perspectives among members on the
Board (diversification staffing). In nonprofits, members are also
sought who have strong passion for the mission (passion-driven
staffing). We’re learning, though, that passion alone is not enough
— Board members also must have the time and energy to actively
participate in the Board. Yet another perspective is to get members
who represent the major constituents of the organization (representative
staffing).

Ironically, many people perceive for-profit Boards as being
more established and effective. Yet nonprofit Boards very often
have highly involved members who take a very strong role in establishing
strategic plans and in ensuring that those plans are achieved.
Board members of for-profit and nonprofit organizations have much
to learn from each other.

Sections of This Topic Include

Board Size
Term Limits
Composition of Board Members (Guidelines, CEO on Board, Independent
Members, etc.)

Joining a Board (potential new member’s perspective)
Recruiting Board Members
Informing, Communicating With Board Members
Rewarding / Recognizing Board Members
Removing Board Members

Also consider
Related Library Topics

Learn More in the Library’s Blogs Related to This Topic

In addition to the articles on this current page, also see
the following blogs that have posts related to this topic. Scan
down the blog’s page to see various posts. Also see the section
“Recent Blog Posts” in the sidebar of the blog or click
on “next” near the bottom of a post in the blog. The
blog also links to numerous free related resources.

Library’s
Boards of Directors Blog

Library’s
Nonprofit Capacity Building Blog


Board Size

The Determinants of Corporate Board Size and Composition:
An Empirical Analysis (for-profit)

Board size and corporate performance: evidence
from European countries

What is the Best Size for Your Board?
How Big Should a Board Be and How Often Should
They Meet?

How
Many Members Should We Have?

Term Limits

Coming to Terms With Term Limits
Board
Spills

The Drawbacks of Board Term Limits
Term Limits for Non-Profit Board Members

Composition of Board Members (Guidelines, CEO on Board, Independent
Members, etc.)

General Guidelines for Determining Composition

Approaches/Philosophies to Staffing Nonprofit
Boards

Board Skills: Building the right board
Sample
Board Recruitment Grid (nonprofit)

4
Actions to Weed Out Resume Builders on Your NGO Board

A Board Mystery: The Case of the Emeritus Director
Sample Board Composition Policy
Dangerously Few Women in the Boardroom
Major
Donor on The Board

Board Gender Balance – a personal perspective
Some thoughts on board composition
Women on Boards and its rationale

Should CEO Be On the Board?

Making
Founder Permanent Board Member at Your Peril

Should CEOs be on the Board?
Divide and Conquer? Splitting the Roles of Chair
and CEO

3 reasons to separate CEO and chairman positions

What About Independent Board Members?

Definition of Independent Board Members
Dark Side of Independent Board Members

Is
Director Independence So Important?

How You Find New Directors: “True Independence”
Under the Microscope

Boldly into the Breach – the Lead Independent Director

What About Diversity on the Board? Honorary Members?

Honorary
Board Members – The Truth and The Consequences

Different Is Better: Why Diversity Matters in the Boardroom
Diversity
in the Boardroom

Will the EU insist on 40% board gender diversity?

What About “Big Names” and “Deep Pockets”
on Nonprofit Boards?

Should
You Try Get “Big Names” and “Big Pockets”
on Boards?

Joining a Board (potential new member’s perspective)

Making
the Transition from Manager to Director

Not Just a Resume Booster: Tips for evaluating
a nonprofit before joining the board of directors

Finding the Right Next Board to Join
Using a Board Seat as a Stepping Stone
Do Good, Sure, But Do It Right — Nonprofit Board Service: a ‘Head’s Up’ Checklist
Thinking About Joining a Board?
How to handle the do-it-all founder?
Back to Basics for Training the Board

Recruiting Board Members

Recruiting for Board Members
Prospective Board Members Who
Are Not Ready!

Avoiding
Pitfalls in Recruiting Board Members

Guidelines
for Recruiting New Members

Sample
Board Recruitment Grid

Sample
Board Application Form

Guidelines
for Orienting New Members

Recruiting Board Members, Volunteers
and Participation

Board Diversity: Bigger Issue Than You Think
10 Stop Signs on the Road to Board Recruitment
Recruiting Your Organization’s First Board
Recruiting for Board Members: Process? What Process?
Board
Recruitment: Whose job is it anyway?

Nonprofit
Board of Directors Guidelines

5
Strategies to Create Active Members on Your NGO Board

Study on Women Donors Presents Lessons for Board
Recruitment

Board Recruitment Demonstration Project
5
Ways To Ensure A Non-Profit Board Candidate A Good Choice

Creating a Board Application
Hosting a Board Recruitment Event
Board Recruitment: Getting the People You Want
NGO Board Member & Professional Volunteer Recruitment

Informing, Communicating With Board Members

Wikipedia on Board Manuals
Sample
Board Manual Index

Annual
Reports

The Board
Manual

Addressing Board Knowledge Gaps
Practical Tips for Presenting to the Board

Rewarding / Recognizing Board Members

The following link is useful for nonprofit Boards. For-profit
Board members often are compensated monetarily (see the next section).

Rewarding
Volunteers (includes several other links)

52
Ways To Motivate Your Board Members

Removing Board Members

How Boards Deal with Lazy Directors
How Do I Remove a Board Member
How do we remove a Board member

›Return to All About Boards of Directors






For the Category of Boards of Directors:

To round out your knowledge of this Library topic, you may
want to review some related topics, available from the link below.
Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been
selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books


Staffing the Board

Business executives discussing about succession planning

Staffing the Board

© Copyright Carter
McNamara, MBA, PhD, Authenticity Consulting, LLC
.

Vast majority of content
in this topic applies to for-profits and nonprofits. This book also covers this topic.

Developing, Operating and Restoring Your Nonprofit Board - Book Cover

Sections of This Topic Include

Composition of Members
Board Size
Term Limits
Board Succession Planning
Recruiting Members
Joining Boards
Director Compensation
Improving and Removing Members

Also consider
Related Library Topics

Learn More in the Library’s Blogs Related to This Topic

In addition to the articles on this current page, also see
the following blogs that have posts related to this topic. Scan
down the blog’s page to see various posts. Also see the section
“Recent Blog Posts” in the sidebar of the blog or click
on “next” near the bottom of a post in the blog. The
blog also links to numerous free related resources.

Library’s
Boards of Directors Blog

Library’s
Nonprofit Capacity Building Blog


Composition of Members

General

A VC: Who You Want On Your Board
Starting a Nonprofit: 10 Considerations in Electing the Initial Board
People Want to Follow Calm, Assertive Leaders | Psychology Today

Independence of Members

The good servant
Do Independence and Financial Expertise of the Board Matter for Risk Taking and Performance?
The Dark Side of Outside Directors
The Benefits Of The Perfect Independent Board Member
Independent director – Wikipedia, the free encyclopedia
Bijan Sabet • How to pick an independent board member
Outside Directors: Common Sense for Good Governance
Make the Founder a Permanent Board Member at Your Peril
Definition of Independent Board of Directors | eHow.com
The “Dark Side” of Independent Board Members | Business Ethics
Is director independence so important? « Corporate Governance
How You Find New Directors: “True Independence” Under the Microscope – TheCorporateCounsel.net Blog
Jim Collins – Articles – Companies Need Not Hire Oustide CEOs

Board Diversity

Diversity in the Boardroom « Corporate Governance
Will the EU insist on 40% board gender diversity? | Boards of Directors
Board Diversity: A Bigger Issue Than You Think
Diversity on Corporate Boards: How Much Difference Does Difference Make?
Analyzing Aspects of Board Composition
Diversity in the Boardroom is Important and, Unfortunately, Still Rare
Proposed Diversity Principles | CompassPoint
Young Voices in the Boardroom | CompassPoint
Diversity for Organizations Based in Minority Communities | CompassPoint
The Diversity Issue | CompassPoint
The Diversity Issue: Part 2 | CompassPoint

Women on the Board

Women on Boards: Review & Outlook
Does Gender Matter in the Boardroom?
Advancing female representation in the boardroom: An interview with Ilene H. Lang
Glacial progress of women on Canada’s boards prompts calls for reform – The Globe and Mail
Board Gender Balance – a personal perspective | Boards of Directors
Some thoughts on board composition | Boards of Directors
Gender Diversity and its rationale | Boards of Directors
Boardroom Diversity Is Good Corporate Governance – Bank Think Article – American Banker
Women in the Boardroom: A Global Perspective

Board Size

Nonprofit Boards: Size, Performance and Managerial Incentives
What is the Best Size for Your Board?
Size Matters: Right Sizing Your Board of Directors
Boards: Does One Size Fit All?
Size and Composition of Corporate Boards of Directores: The Organization and Its Environment
The Determinans of Corporae Board Size and Composition: An Empirical Analysis
Board size and corporate performance: evidence from European countries (download file)
How Many Members Should Be On a Board? Really?

Term Limits

Term Limits for Nonprofit Boards – Nonprofit Resource Center
The Drawbacks of Board Term Limits
Should Outside Directors Have Term Limits? The Role of Experience in Corporate Governance
Coming to Terms With Term Limits
Board Spills | Boards of Directors
Term Limits for Non-Profit Board Members | Boards of Directors
Key Metrics Series: Entrenched Board – GMI Ratings

Board Succession Planning

Shoemaker’s child? Succession planning for the board
Board Leadership Succession
Succession Planning for the Board
Board member succession issues
Preparing for Board Director Retirement: A Customized Approach to Succession Planning
Succession Planning for Nonprofits of All Sizes | CompassPoint
Conscious Governance | Board Succession Planning and Skills Analysis | Nonprofit Strategic Planning
The Right Way to Fill Your Board Leadership Pipeline
Succession Planning Checklist Board Members

Recruiting Members

A Guide to Successful Board Recruitment
Board Recruitment: Whose job is it anyway?
Board Recruitment: Getting the People You Want
Your Board Recruitment Package
Sample Board of Directors Recruitment Grid
Guidelines for Recruiting New Board Members
Article – Recruiting for Board Members: Process? What Process?
Avoiding the Pitfalls in Recruiting Board Members from Secrets of Successful Boards
10 “STOP” Signs on the Road to Board Recruitment
Industry Expertise on Corporate Boards
Globalizing the Boardroom
Prospective Board Members Who Are Not Ready!
Recruiting Your Organization’s First Board
Recruiting the Digital Director

Electing Directors

Electing Directors
Does the Director Election System Matter?

Nonprofit

Passion in the Boardroom | Boards of Directors
Five Fast Ways to Recruit New Board Members | CompassPoint
What it takes to be a good nonprofit director – Portland Business Journal
Recruiting Board Members / Volunteers and Participation
4 Actions to Weed Out Resume Builders on Your NGO Board | Nonprofit Capacity Building
Recruiting and Retaining Good Board Members | Minnesota Council of Nonprofits
Nonprofit Board of Directors Guidelines
Board Member and Volunteer Recruitment
Hosting a Board Recruitment Event | Nonprofit Capacity Building
CoreStrategies on Nonprofits: Study on Women Donors Presents Lessons for Board Recruitment
Nonprofit Law Blog: Board Recruitment Demonstration Project
5 Ways To Ensure A Non-Profit Board Candidate A Good Choice | Nonprofit Capacity Building
Should You Try Get “Big Names” and “Big Pockets” on Boards? (nonprofit)
Major Donor on The Board | Fundraising for Nonprofits
Different Overall Approaches to Staff a Nonprofit Board (nonprofit)

Joining Boards

Why they still do it: Understanding directors’ motivations for joining a board
The Benefits of Board Service
Getting on boards | CanadianBusiness.com
Due Diligence Considerations for Nominees – Boardmember.com
20 Questions Directors of Not-for-profit Organizations Should Ask about Governance (to ask before joining)
Questions to Ask Yourself Before Joining Your Next Board | CompassPoint
20 Questions Directors of Not-for-profit Organizations Should Ask about Fiduciary Duty
Making the transition from manager to director | Boards of Directors
Not Just a Resume Booster: Tips for evaluating a nonprofit before joining the board of directors
Using a Board Seat as a Stepping Stone – WSJ.com
Do Good, Sure, But Do It Right — Nonprofit Board Service: a ‘Head’s Up’ Checklist
Learn About Joining a Board | Nonprofit Capacity Building
Richard Leblanc: Thinking of Joining a Board? Ask These Questions First

Director Compensation

A New Elephant In The Room: Corporate Director Pay
Director Ownership, Governance, and Performance
The 2011 U.S. Director Compensation and Board Practices Report
Director Pay
Does Skin in the Game Matter?
Compensation Force: Board of Director Compensation
Directors – Director Compensation – Board Member Compensation
Determining Board Member Compensation
Executive and Director Compensation
Corporate board pay soars as directors’ tasks grow – The New York Times
Board of Director Compensation
Board of Directors Compensation Driven By Market Conditions & Opportunity Costs
The Future of Outside Director Compensation – Boardmember.com
Rewarding Volunteers (nonprofit Board members are volunteers)
SEC Speech: Governance, the Board and Compensation: June 9, 2005 (Chester S. Spatt)
Board Remuneration – Creative Solutions | Boards of Directors
May a Board member of a charitable organization be paid?

Improving and Removing Members

How to Remove an ‘Unfit’ Director – NYTimes.com
Directors – Removing Directors – Remove Board Member
Four Ways to Remove a Board Member | Blue Avocado
When All Else Fails, How Do We Remove a Member of the Board?
How do I Remove LLC Board Members? | LegalZoom: Legal Info
Can a Board of Directors terminate without cause another Boa … – JustAnswer
Removing a Difficult Board Member | CompassPoint
The Right Way to Resign from the Board | CompassPoint

How Boards Deal With Lazy Directors
What To Do With Board Members Who Don’t Do Anything | CompassPoint
52 Ways To Motivate Your Board Memebers « Carol Weisman’s Blog On Fundraising, Philanthropy and Governance
Directors & Boards: Column

›Return to All About Boards of Directors






For the Category of Boards of Directors:

To round out your knowledge of this Library topic, you may
want to review some related topics, available from the link below.
Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been
selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books


Basic Sample of Board of Directors Meeting Minutes

A secretary taking the minutes of a business meeting

Basic Sample of Board of Directors Meeting Minutes

Vast majority of content in this topic applies to for-profits and nonprofits. This book also covers this topic.

Developing, Operating and Restoring Your Nonprofit Board - Book Cover

© Copyright Carter McNamara, MBA, PhD

Description

The following sample agenda represents typical format and content of a board meeting minutes report. This sample should be customized to the particular culture and purpose of the organization. Note that board meeting minutes are very important.

Minutes are considered legal documents by the auditors, IRS and courts, and they represent the actions of the board. Many assert that if it’s not in the minutes, it didn’t happen.

There is no standardized level of content and format for board minutes. In courts, as important as what you did is that you were reasonable when you did it. Therefore, sufficient information should be included to describe how board members reasonably came to reasonable decisions.

Include the name of the organization, date and time of meeting, who called it to order, who attended and if there a quorum, all motions made, any conflicts of interest or abstainment from voting, when the meeting ended and who developed the minutes.

The secretary of the board usually takes minutes during meetings. Written minutes are distributed to board members before each meeting for member’s review. Minutes for the previous meeting should be
reviewed right away in the next meeting. Any changes should be amended to the minutes and a new version submitted before the next meeting where the new version is reviewed to be accepted. Minutes should be retained in a manual and shared with all board members.


Sample of Board Meeting Minutes
Name of Organization
(Board Meeting Minutes: Month Day,
Year)
(time and location)

Board Members:
Present: Bhata Bhatacharia, Jon White Bear, Douglas Carver, Elizabeth Drucker, Pat Kyumoto, Jack Porter, Mary Rifkin and Leslie Zevon
Absent: Melissa Johnson
Quorum present? Yes

Others Present:
Exec. Director: Sheila Swanson
Other: Susan Johns, Consulting Accountant

Proceedings:

  • Meeting called to order at 7:00 p.m. by Chair, Elizabeth Drucker
  • (Last month’s) meeting minutes were amended and approved

Chief Executive’s Report:

  • Recommends that if we not able to find a new facility by the end of this month, the organization should stay where in the current location over the winter. After brief discussion, Board agreed.
  • Staff member, Jackson Browne, and Swanson attended the National Practitioner’s Network meeting in Atlanta last month and gave a brief extemporaneous presentation. Both are invited back next year to give a longer presentation about our organization. After brief discussion, Board congratulated Swanson and asked her to pass on their congratulations to Browne as well.
  • Drucker asserts that our organization must ensure its name is associated with whatever materials are distributed at that practitioner’s meeting next year. The organization should generate revenues where possible from the materials, too.
  • Swanson mentioned that staff member, Sheila Anderson’s husband is ill and in the hospital. MOTION to send a gift to Anderson’s husband, expressing the organization’s sympathy and support; seconded and passed.

Finance Committee report provided by Chair, Elizabeth Drucker:

  • Drucker explained that consultant, Susan Johns, reviewed the organization’s bookkeeping procedures and found them to be satisfactory, in preparation for the upcoming yearly financial audit. Funds recommends that our company ensure the auditor provides a management letter along with the audit financial report.
  • Drucker reviewed highlights, trends and issues from the balance sheet, income statement and cash flow statement. Issues include that high accounts receivables require Finance Committee attention to policies and procedures to ensure our organization receives more payments on time. After brief discussion of the issues and suggestions about how to ensure receiving payments on time, MOTION to accept financial statements; seconded and passed.

Board Development Committee’s report provided by Chair, Douglas Carver:

  • Carver reminded the Board of the scheduled retreat coming up in three months, and provided a drafted retreat schedule for board review. MOTION to accept the retreat agenda; seconded and passed.
  • Carver presented members with a draft of the reworded By-laws paragraph that would allow members to conduct actions over electronic mail. Carver suggested review and a resolution to change the By-laws accordingly. Kyumoto suggested that Swanson first seek legal counsel to verify if the proposed change is consistent with state statute. Swanson agreed to accept this action and notify members of the outcome in the next Board meeting.

Other business:

  • Porter noted that he was working with staff member, Jacob Smith, to help develop an information management systems plan, and that two weeks ago he (Porter) had mailed members three resumes from consultants to help with the plan. In the mailing, Porter asked members for their opinions to help select a consultant.
  • Porter asked members for their opinions. (NOTE: Zevon noted that she was also a computer consultant and was concerned about conflict of interest in her Board role regarding this selection, and asked to be ABSTAINED from this selection. Members agreed.) The majority of members agreed on Lease-or-Buy Consultants. MOTION to use Lease-or-Buy Consultants; seconded and passed.
  • Swanson announced that she had recently hired a new secretary, Karla Writewell.

Assessment of the Meeting:

  • Kyumoto noted that the past three meetings have run over the intended two-hour time slot by half an hour. He asked members to be more mindful and focused during discussions, and suggested that the Board Development Chair take an action to identify solutions to this issue. Chair, Carver, agreed.

· Meeting adjourned at 9:30 p.m.
· Minutes submitted by Secretary, Bhata Bhatacharia.

Return to Board Meeting Minutes


For the Category of Boards of Directors:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


(Sample!) “Supervisory Skills Development Plan” for an Executive Director Who’s Struggling with Supervisory Skills

Young woman with black folder explaining to her supervisor

(Sample!) “Supervisory Skills Development Plan”
for an Executive Director Who’s Struggling with Supervisory Skills

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Also see Carter’s Board Blog (for for-profits and nonprofits).

The document is a sample of a rather detailed, emergency-driven development plan from a board to an executive director, “Jim Struggles,” who struggles to develop basic supervisory skills in his leadership role of Agency-in-Need. Typically, a board is not this hands-on, unless the chief executive clearly needs the help. This struggle is not all that uncommon, particularly with leaders who are highly entrepreneurial. This type of development plan might be posed by a Personnel Committee, staffed by one or two experienced managers who recognize the need for the change in management style by the executive director. The plan would be reviewed by the Committee with the Board Chair and then, if acceptable, posed to the chief executive to work an accommodating arrangement. Next, the entire board might review and authorize the plan if there is not strong contention (in which case, there may be other issues to work). This plan could be adopted by the chief executive and the board as mutual means to develop the chief executive and ensure the long-term health of the organization. Note that detailed nature of this plan is to provide Jim an example of the clear, specific nature needed by him in his performance reviews of his staff — an area in which he struggles.

Description

Considering the specific staff-related issues now in Organization-in-Need and the supervisory area where the Executive Director, Jim Struggles, agrees he needs to improve, the Board Development and Personnel Committee suggests that Jim implement this supervisory skills development plan. This “back to the basics” plan is straightforward, specific and starts small for now. After the following activities have been conducted reliably, then the plan could be embellished. Consistent performance of the following activities by Jim will develop more stability in Organization-in-Need , ultimately requiring less supervisoral time from Jim, making Jim more proactive, increasing staff morale and improving performance. Note that this plan is focused specifically to supporting Jim’s supervisory skills and does not replace the formal performance evaluation conducted once a year by the Organization-in-Need board.

1. Realign his priorities (this development plan guides this realignment)
– he considers himself weak in needed supervisory skills, and ends up focusing on doing what he’s good at and what has built Organization-in-Need so far: fundraising (nonprofit only), speaking and organizing
– for now he needs to refocus more on internal development and less on expansion
– he should stay around the office more to conduct the following supervisoral activities

2. Manage staff performance — performance based on behaviors in the workplace
(Note that the following suggestions should be in accordance with the organization’s official (authorized by the board) personnel policies.)
– avoiding performance issues ultimately decreases morale, decreases Jim’s credibility, decreases Organization-in-Need’s overall effectiveness and wastes more of Jim’s time when he resorts to doing other staff’s jobs because they don’t seem capable of doing them
– he should consistently get written weekly status reports from direct reports; these are useful for understanding and monitoring work, and as a basis for training new staff if needed
– when an important job is not done or is done poorly, immediately tell the employee and store away a brief note of reminder about the event; ask the staff member if they need any special resources they don’t currently have to complete the job, and if so, see that they soon get the resources; if the resources are personal in nature, e.g., they need therapy, then be empathetic, but realize this is their responsibility and continue to focus on their conducting the behaviors needed to effectively do their job at Organization-in-Need
– on a second occurrence of a job being done poorly by the employee, write a memo to the employee and present it to him or her in a meeting; in the memo, indicate what you saw that needs improvement, that you talked to the employee before and on what date, again ask if there’s anything you can do to help the employee improve. Tell the board of the situation.
– on the third occurrence of a job being done poorly, promptly document the issue in a “warning” memo  again provided to the employee in a 1-on-1 meeting; in the memo, describe the issue including previous conversations about the issue, and warn that if the issue occurs again, they will be fired
– on the fourth occurrence, fire the employee (Organization-in-Need deserves good employees!!!)

3. Consistently hold staff meetings (builds teams, reduces stress and Jim’s so he is more proactive)
– this ultimately produces more efficient time management and supervision for Jim
– for clarity, focus and morale, be sure to use agendas and ensure follow-up minutes
– in meetings, review the overall condition of Agency-in-Need and review recent successes of Agency-in-Need
– in meetings, have each member give an overview of current activities and planned activities
– in meetings, plan the activities that require mutual coordination among managers

4. Have consistent 1-on-1 monthly meetings with direct reports
– this ultimately produces more efficient time management and supervision
– guide “sudden” supervisoral issues to be handled later, in these 1-on-1 meetings
– review completed activities and planned activities (more specifically than in staff meetings); it’s typical to be surprised at what and how much is going on of which the leader isn’t aware
– leave time near the end of the meetings for Q and A from the staff member
– start basic performance reviews with each staff; these meetings will greatly facilitate performance review planning and implementation; these reviews build accountability and morale; staff deserve reviews; include the staff member’s input to the reviews

5. Manage and report on the budget
– Jim has many of the skills needed to manage the budget; he needs refocus to the budget
– he should analyze the budget himself, including for a) highlights, b) trends and c) issues
– he should present this information himself in a report to the board

6. Establish and enforce personnel policies and procedures to effectively deal with recurrent issues
– make a list of recurrent issues, e.g., staff doesn’t promptly hand in client payments
– write a policy with a procedure for each issue, e.g., of how payments should be handled
– have the board personnel committee review the policy
– work the policy — make every effort not to perform the procedure himself

7. Cap his work hours at a maximum of 50 hours a week
– these suggested activities will likely be somewhat uncomfortable (at first) for Jim — board members hope that he’ll likely come to appreciate the simplicity and benefits of these regular actions
– this cap is a rather straightforward measure to help ensure a reasonable stress and work load

8. Once a year, schedule a half-day session with all staff to update policies and procedures
– for smaller organizations that are usually averse to policies, this once-a-year event seems to effectively focus staff attention on policies and procedures, ensure all staff members are aware of them and ensure policies exist where needed

Milestones for Implementation of this Plan
This plan produces certain tangible outputs which can reviewed to help guide Jim’s implementation of this development plan. Board members are available to help guide Jim in this effort, but would like to see items done by certain dates to ensure they’re not lost in a crack. Members would like to see Jim drive the effort to produce the following items by the following due dates.

Items to Review

“Due” Date

1. performance-issue letters
— Members are aware of two issues which deserve warning letters now; members would like to see the drafted letters

Nov 17, `98

2. staff meeting agendas and minutes

monthly for several
months

3. status reports from direct reports

examples in Dec and Jan

4. performance reviews
— a) Jim’s drafted procedure of how he’d like to carry out these reviews, b) drafted reviews for all direct reports, and c) final reviews after having met with direct reports

a) in Jan, `99
b) some drafts in Feb `99
c) some finals as they occur

5. budget reports
— these can be presented to board members in regular board meetings; perhaps the Finance Committee could help Jim to understand the notion of “highlights, trends and issues”?
in monthly board meetings
6. current issues and associated drafted policies and procedures

Jim mentioned several issues to me in our meeting today

Dec. 15, `98

Return to Board of Director’s Evaluation of Chief Executive


For the Category of Boards of Directors:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Overview of Roles and Responsibilities of Corporate Board of Directors

Executive addressing his employee while writing on a white board

Overview of Roles and Responsibilities of Corporate Board
of Directors

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Also
see Carter’s Board Blog (for for-profits and nonprofits).

Vast majority of content in this topic applies to for-profits and nonprofits. This book also covers this topic.

Developing, Operating and Restoring Your Nonprofit Board - Book Cover

There are a variety of views about the roles and responsibilities of a board of directors and most of these views share common themes. This document attempts to portray those themes by depicting various views. Simply put, a board of directors is a group of people legally charged with the responsibility to govern a corporation.

In a for-profit corporation, the board of directors is responsible to the stockholders — a more progressive perspective is that the board is responsible to the stakeholders, that is, to everyone who is interested and/or can be effected by the corporation. In a nonprofit corporation, the board reports to stakeholders, particularly the local communities which the nonprofit serves.

(Be sure to also review information in the sections Sample Job Descriptions and Board and Staff Roles.)

Also consider
Related Library Topics

Learn More in the Library’s Blogs Related to Board Roles and Responsibilities

In addition to the articles on this current page, see the following blogs which have posts related to Board Roles and Responsibilities. Scan down the blog’s page to see various posts. Also see the section “Recent Blog Posts” in the sidebar of the blog or click on “next” near the bottom of a post in the blog.


Major Duties of Board of Directors

Brenda Hanlon, in In Boards We Trust, suggests the following duties (as slightly modified by Carter McNamara to be “nonprofit/for-profit neutral”).

1. Provide continuity for the organization by setting up a corporation or legal existence, and to represent the organization’s point of view through interpretation of its products and services, and advocacy for them

2. Select and appoint a chief executive to whom responsibility for the administration of the organization is delegated, including:

– to review and evaluate his/her performance regularly on the basis of a specific job description, including executive relations with the board, leadership in the organization, in product/service/program planning and implementation, and in management of the organization and its personnel

– to offer administrative guidance and determine whether to retain or dismiss the executive

3. Govern the organization by broad policies and objectives, formulated and agreed upon by the chief executive and employees, including to assign priorities and ensure the organization’s capacity to carry out products/services/programs by continually reviewing its work

4. Acquire sufficient resources for the organization’s operations and to finance the products/services/programs adequately

5. Account to the stockholders (in the case of a for-profit) or public (in the case of a nonprofit) for the products and services of the organization and expenditures of its funds, including:

– to provide for fiscal accountability, approve the budget, and formulate policies related to contracts from public or private resources

– to accept responsibility for all conditions and policies attached to new, innovative, or experimental products/services/programs.


Major Responsibilities of Board of Directors

BoardSource, in their booklet “Ten Basic Responsibilities of Nonprofit Boards”, itemize the following 10 responsibilities for nonprofit boards. (However, these responsibilities are also relevant to for-profit boards.)

1. Determine the Organization’s Mission and Purpose

2. Select the Executive

3. Support the Executive and Review His or Her Performance

4. Ensure Effective Organizational Planning

5. Ensure Adequate Resources

6. Manage Resources Effectively

7. Determine and Monitor the Organization’s Products, Services and Programs

8. Enhance the Organization’s Public Image

9. Serve as a Court of Appeal

10. Assess Its Own Performance

For more information about each of these responsibilities in nonprofits, see
Becoming a More Effective Nonprofit Board

Additional Perspectives on Board Roles and Responsibilities


For the Category of Boards of Directors:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.