Enterprise ethics: The new safety

October 2007 » Columns
Like safety, health, and environmental programs, enterprise ethics must be a cornerstone of your business and our industry.
Sandy Cuttino, P.E.

EARTH TECH, INC.

Headquarters: Long
     Beach, Calif.

Number of offices: 130
     worldwide

Total number of employees:
     6,500

Year firm was established:
     1970

Total billings for last fiscal year:
     $1.2 billion

Fallout from recent political, corporate, and procurement scandals have heightened awareness of enterprise ethics and compliance. Private-sector clients are now joining public-sector clients in implementing and tightening their procurement integrity requirements to protect against even the appearance of wrong doing in contracting with engineering companies. Private- and public-sector clients have long considered companies’ safety, health, and environmental performance as they evaluate engineering firms. Today, clients are also considering enterprise ethics as a criterion for selection. This increasing client focus affects virtually all business practices, including business development, contract performance, and subcontracting. Furthermore, it requires that we be ready to demonstrate the support, including open dialogue, clear policies, and education, provided to our employees to do the right thing.

Defining ethics
One of the first distinctions to be made with regard to enterprise ethics is that it encompasses more than compliance. Enterprise ethics considers both the letter and the spirit of the law, while compliance simply focuses on the letter of the law. As requirements have been legislated and procurement laws tightened, aspects of enterprise ethics have transitioned to issues of compliance. In addition to government-imposed rules and regulations, these standards are also defined by customers’ contract terms and conditions, international treaties, and other factors. Moreover, professional codes of conduct, built upon a foundation of honesty and integrity, require adherence to the highest principles of ethical conduct.

Enterprise ethics is a dynamic area and changes happen daily. Companies must focus on the constantly changing requirements and provide employees with programs that help them understand all regulations so unintentional ethical breaches do not occur. For example, since 2003, government entities have pushed forward new laws and regulations related to ethics that impact interaction with public officials, including meals, entertainment, and gifts. Hospitality and courtesies once considered normal in the conduct of our business may now be inappropriate or illegal. While some argue that public officials bear the responsibility for not accepting something inappropriate, there is no excuse for an engineering company putting customers in a compromising situation. All parties must be cognizant and respectful of the rules.

Getting started
Since most companies understand the importance of creating a safety culture and have practices in place to foster this mentality, this is a good model from which to build a culture focused on enterprise ethics. Firm leadership must put the systems and processes in place, train all personnel on the risks inherent in their functional responsibilities, and communicate the implications of ethical behavior to all levels of the organization. Most importantly, firm leadership must create an environment in which employees are encouraged to raise questions or concerns about proper conduct. In essence, enterprise ethics must be integral to a firm’s strategy and goals, embraced by all employees, and inherent in every decision.

Sharing real-life examples—positive, negative, and even ones in which the right decision is not clear—is a powerful employee education tool. Managers at all levels should be encouraged to talk openly about situations in which the right decision was, or was not, made to help employees understand the importance and implications of making ethical decisions and avoid similar improper situations in the future. This openness in sharing real-world experiences helps create a culture of high ethical standards.

Looking ahead
An increasing number of clients—both in the public and private sectors—are incorporating questions into their proposal and interview processes about the enterprise ethics programs and track records of engineering firms. Clients seek providers whose commitment to ethics aligns with or exceeds their own. And, they are requiring firms to present documentation so they can assure their stakeholders—whether it is taxpayers or shareholders—that their service providers are as committed to ethical behavior as they are.

These programs come with a cost, so building a program that balances the investment with a desired outcome is critical. But perhaps the greatest benefit in cultivating an ethical culture is trust among employees, clients, and partners and how this trust can be leveraged as a discriminator in a firm’s day-to-day operations.

Although the dynamic is constantly changing, engineering firms can no longer afford to operate out of ignorance. While most ethical violations are simply acts of unintentional misconduct, companies have a responsibility to educate employees about the ever-changing regulations so that no one is comprised. Like safety, health, and environmental programs, enterprise ethics must be a cornerstone of your business and our industry.

Sandy Cuttino, P.E., executive vice president of business practices and enterprise ethics, Earth Tech, Inc., is responsible for the firm’s global integrity leadership and enterprise ethics. She can be contacted at sandy.cuttino@earthtech.com.


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