Organizational ethics: Grading your own company

"How much more can I contribute [to the good of the agency] if I think about ways that I might enhance the likelihood of somebody really doing the right thing not simply because it's the rule, but because it's the right thing?" Josephson said during a webcast.

Josephson advises developing mechanisms to ensure employees know the law and increase the likelihood that they will obey it by establishing detection and reporting processes that create a credible likelihood that anyone suffering a breach of ethical judgment or breaking the law will be caught and disciplined. A good system will ensure that people have the information they need to makes sure the agency's ethical guidelines are being followed. Creating a program that fosters an ethical culture, Josephson says, lessens the likelihood that a violation will occur.

That can be critically important, even if a violation were to occur. Think of it this way:

• You have a program in place that creates an ethical culture that makes it less likely that a violation will occur in the first place.
• If a violation were to occur, perhaps an employee has a lapse in judgment that comes to light and puts the agency at risk of fines or other repercussions.
• If you can show that this misbehavior occurred even despite the fact that you had a robust ethics program in place, you may show the jurisdiction enough that any fine or penalty could be reduced substantially.

This makes it pertinent to look at your program as a whole and do what it takes so that you can say it is reasonably designed to detect and prevent violations. If a judge finds that the program promotes an organizational culture that encourages ethical conduct and a commitment to compliance with the law, your chances of being punished to the full extent of the law due to an isolated incident are minimized. If you do not have such a program in place, you are leaving yourself and your agency vulnerable to the full extent of fines and punishments.

"Your compliance program should be such that the trainings you offer, the support you give, the interactions that you have actually promote an ethical culture," Josephson says. "They don't just prevent bad things, they promote good things."

Josephson advises that you try to approach ethics and the whole idea of compliance with a positive mindset instead of just being a way to play "gotcha!"

"If we could instill a positive ethical culture here where people just instinctively – it's in the organization's DNA, and people just want to do the right, fair and honest thing, how much better would that make the organization, and how much less likely would it be that there would be violations?" Josephson said.

If you take care of ethics, Josephson says, a lot of compliance problems would go away. If you only took care of compliance problems, you might still have a lot of ethics problems.