GUIDE TO ORGANISATIONAL ETHICS INSIDE
Fundamentals of NGO ManagementGuide toOrganisational EthicsDr. Janette Minnaar-van Veijeren
Guide to Organisational EthicsDr. Janette Minnaar-van VeijerenContractor to the Ethics Institute of South AfricaPublished byNamibia Institute for DemocracyFunded byEmbassy of FinlandCopyright: 2011, Namibia Institute for DemocracyNo part of this book may be reproduced in any form or by any means, electronic ormechanical, including photocopying, recording, or by any information storage andretrieval system, without the permission of the publisher.Design and Layout: DV8 Saatchi & SaatchiPrinted by: John Meinert Printing, Windhoek, Namibia, 2011ISBN: 978-99916-865-8-5
ForewordThe establishment of an effective ethics program and a strong ethical culture that is pervasivethroughout civil society organisations are cornerstones to the credibility of the sector in Namibia.As part of its programme to strengthen civil society in Namibia, the NID, in cooperation withvarious partners has therefore embarked on a training and technical assistance programmeaimed at establishing ethics programs in civil society through: building local capacities for the assessment and training of organisations on ethicsmanagement to ensure the sustainability of interventions; ensuring that measures to create an ethical culture are in place; ensuring ethical leadership by management on all levels of organisations; ensuring tangible incentives for ethical courage; ensuring the appointment of ethics and compliance officers within organisations.Compliance alone is however not enough. Ethical culture is the single biggest factor determiningthe amount of misconduct in any organization. The establishment of a strong ethical culture isa continual process, one that can be approached strategically, with measures to demonstrateprogress. Making ethical decisions in the face of pressure to do otherwise requires personal riskby an employee. Reporting misconduct to management also takes ethical courage. Employeesare more likely to take these risks if their experience tells them that management supports,rewards and protects individuals who take steps to uphold ethical standards. Performancemeasures for upholding ethical standards should be integrated into employee evaluations, andorganisations should take steps to recognize employees who demonstrate right conduct.It is trusted that this guide, which is published as part of the NID’s Fundamentals of NGOManagement series, will contribute to establishing a strong ethical culture in civil society inNamibia. I wish to thank the Embassy of Finland in Namibia for their support of this guide‘spublication.Theunis KeulderExecutive DirectorNamibia Institute for Democracy
Executive summaryEthics concerns doing the right thing and is based on formalised or professional standards andvalues. Thus, ethics differs from morality, which helps to distinguish right from wrong basedon what society regards as acceptable, and from compliance, which concerns doing thingsright. An ethical dilemma arises when two core ethical values clash or compete. In order tomake the right ethical choice, one can ask a number of questions to help one to determinewhether one’s conduct is ethical. An ethical person not only has integrity and virtues, but ischaracterised by good and ethical behaviour.A distinction can be made between irregularities, involving non-adherence to organisationalrules and policies, unlawful or criminal behaviour, and unethical behaviour, which fallsbelow or violates formalised or professional standards. There are many reasons for unethicalconduct, which invariably has negative consequences. Ethical conduct, on the other hand,has a positive impact on not only employee perception and behaviour, but also the long-termsustainability and profitability of companies.A number of international and transnational guidelines are available to assist in theestablishment of an ethical organisational culture. These guidelines include articles providingfor the protection of human rights as enshrined in the Namibian Constitution, the US FederalSentencing Guidelines, the King 3 report on corporate governance, the Namibia Public ServiceCharter, the South African Batho Pele principles and the Africa Public Service Charter.In order to create a culture of integrity and manage ethics effectively, an organisation hasto implement an ethics-management programme. Such a programme entails assessing theorganisational culture; developing or redesigning a code of ethics; institutionalising ethics,for example, by establishing an ethics office and a reporting line; training all employeesand other stakeholders; auditing and verifying the effectiveness of the programme; andreporting to stakeholders. An organisation can also foster ethics by adopting and enforcinga conflict-of-interest policy, a gift register and an entertainment policy. Furthermore,business and government can use integrity pacts to fight irregularities, unethical conductand crime proactively.Leaders set the ethical tone in an organisation. Ethical leaders build, maintain and revise thesystems that support organisational ethics and lead by example. Leaders can support ethicsby consistently rewarding ethical behaviour and reprimanding ethical misconduct. Leadershave to fulfil a stewardship role and exercise moral duties.
Contents1.Introduction. 62.Introductory remarks about organisational ethics. 62.1What is meant by ‘ethics’?. 62.2What is meant by the term ‘organisational ethics’?. 62.3Ethics, morals and religion. 72.3.1The difference between immoral and unethical behaviour. 82.4Ethics and norms. 92.5Ethics and compliance. 92.6Ethics and values. 92.7Ethics and ‘ubuntu’. 92.8Universal values. 102.9Organisational values. 102.10 Ethics management. 103.Ethical dilemma. 103.1Make the right ethical choice. 114.What is an ‘ethical person’?. 124.1Virtues. 124.2Good behaviour?. 125.What is ethical behaviour?. 126.What is meant by ‘ethical organisational culture’?. 137.What is meant by ‘unlawful, unethical and irregular’ ?. 137.1Irregularities. 147.2Unlawful behaviour. 147.3Unethical conduct. 158.Reasons for unethical conduct. 168.1Consequences of unethical conduct. 179.Benefits of ethical conduct. 179.1Positive impact of ethical environment. 179.2Do ethics and compliance pay?. 189.3Stakeholder priorities. 1810.International and transnational guidelines for creating an ethical culture. 1810.1 Namibian Constitutional Human Rights. 1910.2 United States Federal Sentencing Guidelines. 19
10.3 King 3 report on corporate governance. 2010.3.111.Ethics-management programme. 21More ways to promote an ethical organisational culture. 2811.1 Adopt policies and controls. 2811.1.1Conflict-of-interest policy. 2811.1.2Gift and entertainment policies. 2811.2 Integrity pacts. 2812.Ethical leadership. 2912.1 Characteristics of ethical leaders. 3012.2 Leadership support of ethics. 3012.3 Stewardship and moral duties of leaders. 3013.Conclusion. 31Annex A: Template: Code of ethics. 32
Fundamentals of NGO Management1. IntroductionEthics and corporate-governance practices have become mainstream considerations in boththe public and the private sector worldwide. In the past, these issues were acknowledged asbeing non-financial and marginal. The fact that these non-financial issues have shifted frombeing marginal to being mainstream components of African public-service organisations isamong the most positive developments that has taken place in the region during the pastdecade or two. The implications of this shift, as well as of its evolving application, will be offundamental importance to the future of African and global economic integration, national1development, poverty reduction and service delivery in local communities.In Southern Africa, we now have a robust set of tools and practical guidelines for goodcorporate governance that did not exist a decade or two ago. Moreover, in view of greaterawareness of these issues and a willingness by the public and private sectors to engage ina good governance agenda, there is growing global consensus - supported by internationalconventions and national legislative and policy frameworks - on which standards, values,2tools and policies constitute good practice.Improving good governance is an ongoing challenge as we build on and extend existingcorporate-governance standards and ethical values to set an even higher benchmark.2. Introductory remarks about organisationalethics2.1 What is meant by ‘ethics’?Ethics is the study of what we understand to be good and correct behaviour and how peoplemake those judgements. Ethics concerns doing what is right, good and fair beyond the3demands of laws and regulations.Ethics is concerned with what is good or right in human interaction. “It revolves around threecentral concepts: ‘self’, ’good’ and ‘other’. Ethical behaviour results when one does not merely4consider what is good for oneself, but also considers what is good for others.”2.2 What is meant by the term ‘organisational ethics’?When one applies the concept of ethics to organisations, one takes into consideration the fullimplications of the organisation on all its stakeholders. Organisational ethics can thereforebe defined as Identifying and implementing standards of conduct in and for theorganisation that will ensure that the interests of all its stakeholders are respected.Organisational ethics thus refers to the values and standards that determine the interaction5between business and its stakeholders.”1Sullivan, J.D. (2009) A Moral Compass of Companies: Business Ethics and Corporate Governance as3Ethics Resource Centre, Washington DC.Anti-Corruption Tools.Global Corporate Governance Forum: Focus 7. International Finance Corporation,4World Bank, Washington.Press, page425Ibid.6Rossouw, D & van Vuuren, L. 2010. Business Ethics, 4th Edition. Oxford UniversityIbid, page 5.
Fundamentals of NGO Management2.3 Ethics, morals and religionMorality is the values that we attribute to a system of beliefs that helps an individualto distinguish right from wrong. The Oxford Dictionary describes moral as conformingto accepted standards of general conduct. Morality refers to what a group of people in aparticular culture, or from a certain background, regard as socially acceptable behaviour, andit may change over time.Some years ago, sociologist Raymond Baumhart asked business people, ‘What does ethicsmean to you?’ Among their replies were the following:“Ethics has to do with what my feelings tell me is right or wrong.”“Ethics has to do with my religious beliefs.”“Being ethical is doing what the law requires.”“Ethics consists of the standards of behavior our society accepts.”“I don’t know what the word means.”These replies might be typical of our own. The meaning of “ethics” is hard to pin down, andthe views many people have about ethics are shaky. Like Baumhart’s first respondent, manypeople tend to equate ethics with their feelings. But being ethical is clearly not a matter offollowing one’s feelings. A person following his or her feelings may recoil from doing what isright. In fact, feelings frequently deviate from what is ethical.One should also not identify ethics with religion. Most religions, of course, advocate highethical standards. Yet if ethics were confined to religion, then ethics would apply only toreligious people. But ethics applies as much to the behavior of the atheist as to that of thesaint. Religion can set high ethical standards and can provide intense motivations for ethicalbehavior. Ethics, however, cannot be confined to religion nor is it the same as religion.Being ethical is also not the same as following the law. The law often incorporates ethicalstandards to which most citizens subscribe. But laws, like feelings, can deviate from whatis ethical. Our own pre-Civil War slavery laws and the old apartheid laws of South Africa aregrotesquely obvious examples of laws that deviate from what is ethical.Finally, being ethical is not the same as doing “whatever society accepts.” In any society, mostpeople accept standards that are, in fact, ethical. But standards of behavior in society candeviate from what is ethical. An entire society can become ethically corrupt.Moreover, if being ethical were doing “whatever society accepts”, then to find out what isethical one would have to find out what society accepts. To decide what I should think ofabortion, for example, I would have to take a survey of society and then conform my beliefsto whatever society accepts. But no one ever tries to decide an ethical issue by doing asurvey. Further, the lack of social consensus on many issues makes it impossible to equateethics with whatever society accepts. Some people accept abortion but many others do not.If being ethical were doing whatever society accepts, one would have to find an agreement onissues, which does not, in fact, exist.7
Fundamentals of NGO ManagementWhat, then, is ethics? Ethics is two things. First, ethics refers to well-founded standards of rightand wrong that prescribe what humans ought to do, usually in terms of rights, obligations,benefits to society, fairness, or specific virtues. Ethics, for example, refers to those standardsthat impose the reasonable obligations to refrain from rape, stealing, murder, assault, slander,and fraud. Ethical standards also include those that enjoin virtues of honesty, compassion,and loyalty. And, ethical standards include standards relating to rights, such as the right tolife, the right to freedom from injury, and the right to privacy. Such standards are adequatestandards of ethics because they are supported by consistent and well-founded reasons.Secondly, ethics refers to the study and development of one’s ethical standards. As mentionedabove, feelings, laws, and social norms can deviate from what is ethical. So it is necessaryto constantly examine one’s standards to ensure that they are reasonable and well-founded.Ethics also means, then, the continuous effort of studying our own moral beliefs and ourmoral conduct, and striving to ensure that we, and the institutions we help to shape, live up6to standards that are reasonable and solidly-based.”2.3.1 The difference between immoral and unethical behaviourIt is important to be clear about the difference between immoral behaviour and unethicalbehaviour. ‘Morals’ are that by which we judge others, whereas ‘ethics’ refers to a professional7or formalised standard. Stated differently : Morality may be defined as the values that we attribute to the system of beliefs thathelps an individual to distinguish right from wrong. Ethical conduct is based on formalised or professional standards, whereas morals arebased on what society regards as acceptable behaviour.Examples:Gambling may be legal in a particular country, but may none the less be seen as immoral(wrong) by those against whose system of beliefs gambling goes. It would not be regarded asunethical, however, since it does not breach any codified standard.Plagiarism (using someone else’s work without citing it) is considered unethical (it may alsobe illegal), because it breaches the formal standards of behaviour expected of students andresearchers.6Developed by Manuel Velasquez, Claire Andre, Thomas Shanks, S.J., and Michael J. Meyer.This article appeared originally inIssues in Ethics IIE V1 N1 (Fall 1987). Revised 2010.7Source: Ethics Resource Centre, Washington DC, USA8
Fundamentals of NGO Management2.4 Ethics and normsNorms are the rules that we apply to a specific situation and are based on our values. Ethicsis the study of what we understand to be good and correct behaviour and how people makethose judgements. As mentioned, ethics concerns doing what is right, good and fair beyondthe demands of laws and regulations.2.5 Ethics and complianceEthics is about doing the right thing, whereas compliance is about doing things right. Ethicsthus requires a higher standard of behaviour.2.6 Ethics and valuesWhat are values? We all have personal values. Our values are our fundamental beliefs. Ourvalues provide guidance in distinguishing right from wrong. Our values could also be calledour “standards”. Values are what an individual believes to be of worth and of importance orvaluable. These are general guidelines of acceptable and unacceptable behaviour.As individuals in society, our behaviour is influenced by our personal values. Personal valuesare formed through various influences, including our religious beliefs, culture, family, genderand economic situa
characterised by good and ethical behaviour. A distinction can be made between irregularities, involving non-adherence to organisational rules and policies, unlawful or criminal behaviour, and unethical behaviour, which falls below or violates formalised or professional standards. There are many reasons for unethical
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