Code of Ethics for Private Sector in Mozambique Prof. Willem Landman [email protected]

www.ethicsa.org

Workshop overview

1. What is a Code of Ethics and what are the benefits of a Code (recap day 1)?

2. Identifying ethics risks 3. Codifying ethical values 4. The implementation of a Code of Ethics 2 © Ethics Institute of South Africa 2012

What is a Code of Ethics

• •

“Constitution” of the organisation A Code of Ethics is a document created to:

– Set the standards for ethically acceptable behaviour – Communicate those standards to all stakeholders •

A self-imposed standard for ethical behaviour

3 © Ethics Institute of South Africa 2012

Anticipated benefits — 1

• Requires

identification

of core values • Encourages reflection on the

meaning

and application of values • Enhances

reputation

• Builds

trust

– internally and externally • Increases

awareness

of ethics issues 4 © Ethics Institute of South Africa 2012

Anticipated benefits — 2

• Stimulates

ethics talk

• Guides

decision-making

• Reduces

ethics risks

• Fosters

reporting

of problems • Encourages seeking

advice

• Enhances

good governance and leadership

5 © Ethics Institute of South Africa 2012

What happens after today?

1. Code will be

drafted

by IoDMZ and EthicsSA

2. Survey questionnaire

with regard implementation will be prepared

3. Draft and questionnaire will be circulated

by IoDMZ amongst participants of today’s workshop and other relevant stakeholders (approx. 20 June to half August 2012)

4. Review

draft code in light of comments (Aug/Sept 2012)

5. Second workshop

(2 nd week of Sept 12) to discuss code and different implementation strategies for code (based on survey outcomes)

6. Launch

of Code (December 12)

Workshop overview

1. What is a Code of Ethics and what are the benefits of a Code?

2. Identifying ethics risks 3. Codifying ethical values 4. The implementation of a Code of Ethics 7 © Ethics Institute of South Africa

Dimensions of ethics risk 1. Positive risk (opportunities or possible benefits) 2. Negative risk (threats or possible harms) © Ethics Institute of South Africa 2012 8

Ethics as opportunity Importance of good ethical reputation • Stakeholder trust • • • Investor confidence Credibility of leaders Ability to deliver products/services • • • Hire talented staff Loyalty of supply chain Exert influence on government © Ethics Institute of South Africa 2012 9

Ethics as opportunity recognised and managed their ethics by viewing ethics as an opportunity.

The Tylenol incident Our Credo “We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services.” © Ethics Institute of South Africa 2012 10

Ethics threats Negative ethics risks - Issues/ behaviour that can … • Damage reputation • Anger/alienate stakeholders • Those things that can go wrong – ethical problems © Ethics Institute of South Africa 2012 11

Ethics threats Examples of companies that damage(d) their reputations through unethical conduct (no ethics threat anticipation): – Enron – – Arthur Andersen Parmalat – – – Nike Ford Other?

12 © Ethics Institute of South Africa 2012

Identifying ethics risks

Negative risks: What are the practices and behaviours that should be avoided by business in Mozambique?

suppliers community company clients environment 13

Identifying ethics risks

Positive risks (opportunities): What are the ethical values and standards of behaviour that business in Mozambique should adhere to?

suppliers community company clients environment 14

Workshop overview

1. What is a Code of Ethics and what are the benefits of a Code?

2. Identifying ethics risks 3. Codifying ethical values 4. The implementation of a Code of Ethics 15 © Ethics Institute of South Africa 2012

Codifying ethical standards Five key decisions in code design 1.

2.

3.

4.

5.

Purpose

– Objective, aim?

Format

– Values or rules?

Content

– Components?

Tone

– Positive or negative?

Implementation

– From paper to practice?

16 © Ethics Institute of South Africa 2012

Decision 1: Purpose of the Code Various considerations

• Prevents unethical behaviour • Promotes ethical behaviour • Provides guidance in ethical decision making • Promote reputation • Pacify stakeholders • Prevent state interference 17 © Ethics Institute of South Africa 2012

Decision 1: Purpose of the Code

What purpose should the Code serve?

© Ethics Institute of South Africa 2012 18

Decision 2: Format of Code ASPIRATIONAL DIRECTIONAL Positives

short recallable discretion

Positives

specific enforceable sanctions

Negatives

vague?

enforceability?

Negatives

discretion?

recallability?

Integrated

Values & rules

19 © Ethics Institute of South Africa 2012

Decision 2: Format of Code

• What should be the format of the Code © Ethics Institute of South Africa 2012 20

Decision 3: Content of the Code - 1

• Rationale • Values • Guidelines for conduct • Guidelines for ethical-decision making • Sanctions • Resources and references 21 © Ethics Institute of South Africa 2012

Decision 3: Content of the Code - 2

•

Rationale

– Justification for existence of Code – Explains reason for and purpose of Code – Intends to persuade readers of importance •

Values

– Norms to guide and tailor organisation’s behaviour 22 © Ethics Institute of South Africa 2012

Decision 3: Content of the Code - 3

• •

Guidelines for conduct

– Prescribe acceptable or prohibit unacceptable actions/practices – Provide explicit directions

Guidelines for ethical decision-making

– Guidance on how to apply values, principles – Decision-making procedure © Ethics Institute of South Africa 2012 23

Decision 3: Content of the Code - 4

• •

Sanctions

– Stipulate consequences of transgressing the Code – Might specify disciplinary procedures

Reference to sources

– Reporting mechanism – Ethics advice resource – Relevant policies / documents 24 © Ethics Institute of South Africa 2012

Decision 3: Content of the Code - 5

• What categories of content should be included in the code?

© Ethics Institute of South Africa 25

Decision 4: Tone of the Code - 1

• On a spectrum from positive-supporting to negative-prohibiting • Four rhetorical dimensions of organisational communication: – Transformational – Instructional – Informational – Relational 26 © Ethics Institute of South Africa 2012

Relational (Trust) Transformational (Change) Informational (Facts)

27

Instructional (Action)

Decision 4: Tone of the Code - 2

• •

Applying the model to codes:

Quadrants have opposites: - Relational vs. Instructional - Transformational vs. Informational Strength in one dimension may cause weakness in another 28 © Ethics Institute of South Africa 2012

Decision 4: Tone of the Code

What should the tone of the Code be? © Ethics Institute of South Africa 2012 29

Workshop overview

1. What is a Code of Ethics and what are the benefits of a Code?

2. Identifying ethics risks 3. Codifying ethical values 4. The implementation of a Code of Ethics 30 © Ethics Institute of South Africa 2012

Decision 5: Implementation of Code

• Without proper consideration to implementation, the Code will remain mere words on paper • Planning for implementation to start before Code completion • Survey questionnaire to be circulated in Mozambique business community with regard implementation of code 31 © Ethics Institute of South Africa 2012