Cases in Point
Example 1: John's Judgment
Imagine a mid-level employee, John, at a marketing event for prospective clients. In an attempt to generate new business, John’s manager reveals the name of a high-profile celebrity client.
John believes that company policy, and perhaps the law, prohibits publicizing clients' names. He vaguely recalls a training event in which employees were advised not to discuss customers outside the company.
His manager’s actions might skirt internal guidelines and the law. But how should John address this? He consults the company’s code of conduct, which includes a specific prohibition on disclosing customer information, including customer names, to the public. Worse, the code indicates this might violate privacy and information security laws and regulations.
Adding to John's woes, the code further directs that, upon discovering such a violation, he should report the misconduct to his manager—who, of course, happens to be the one who violated the code—or to another unspecified supervisor.
If John goes to his manager, he runs the risk that nothing will be done to address the current violation and that his manager will retaliate. He's also afraid that if he goes to his manager’s supervisor, his manager will find out, while no corrective action will be taken. After all, it's been increasingly difficult to win new business in the current economy, and John has heard several times in recent months how the company's top priority is to obtain new contracts.
John decides not to do anything, reasoning that although technically a rule has been violated, perhaps no real damage has been done.
Example 2: Katie's Call
At a company across town, Katie, an IT company procurement supervisor, needs to order new computer accessories for a contract that her company just secured. Her best friend operates a company that produces such accessories.
Although her friend’s company doesn't offer the lowest price, the friend assures her that the company produces the best products and has a great customer service team. Katie checks her company’s code of conduct to make sure that there is no conflict in doing business with her friend.
The code states that certain interactions and business relationships with immediate family are prohibited as conflicts of interest, but contains no restrictions against the type of transaction that Katie is contemplating.
Believing that no conflict of interest exists, Katie signs a contract with her friend.
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In Example 1, John decided not to report his manager’s disclosure of a customer’s identity because it resulted in new business, which John believed was the most important factor to the company.
He might well have behaved differently given the benefit of a combined code of business ethics and conduct, which not only clearly proscribed such conduct, but also explained that the transgression was the antithesis of the company’s principles regarding its loyalty and responsibility to its customers and the importance of protecting customer information.
Similarly, in Example 2, ethical guidance would have improved Katie's decision-making by arming her with an understanding of the company’s ethical principles, rather than restricting her to a narrowly drafted code of conduct that didn't cover the decision she needed to make.
Thus equipped, Katie might have understood that conflicts of interest are broadly construed; that she should avoid, if at all possible, doing anything that suggested a conflict; and that, at the very least, such decisions should be reviewed by a manager before proceeding.
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