Do the right thing: instilling ethical standards in your company inspires employee pride and productivity.(HIGHER GROUND)

THE BEST AND MOST ENDURING ADVICE I HAVE EVER RECEIVED WAS TO ENSURE ALL MY DEALINGS COULD BE REPEATED PROUDLY FROM A WITNESS STAND IN A COURT OF LAW. WHILE I HAVE NOT HAD TO DO SO, I HAVE NEVERTHELESS LIVED UP TO THOSE WORDS AND HAVE TRIED TO INSTILL THEIR ROOT--ETHICS--IN THOSE WHO HAVE LOOKED TO ME FOR GUIDANCE.

Developing an ethical culture requires commitment not only on the part of those at the top of the organization, but from everyone within an organization. It takes strong ethical leadership for these ideals to permeate all levels of a company. Such leadership instills expectations in the organization and helps to weed out employees who lack commitment to ethics.

Were it enough to simply list the ethical standards a company expects from its employees, Enron's implosion and the Wall Street collapses might not have come to pass. To state ethical intentions when company leaders act in direct contrast to those intentions clearly sends a contradictory message to the entire organization.

While we cannot assume that everyone at Enron ignored ethical standards, the fallen energy giant remains a glaring example of a company that broke down due to a lack of good ethical guidance. The lack of ethical standards is usually more subtle--a manager accepts a kickback from a vendor to the detriment of her client, an accounting director discloses client information to a third party, a maintenance technician knowingly falsifies his time sheet.

Over time, these small ethical lapses begin to define the company culture. In the latest Ethics Resource Center (ERC) report, the 2007 National Business Ethics Survey, only 42 percent of respondents gave their company's commitment to ethics an "A."

My firm recently reimbursed a client for the cost of some landscaping replacements. During a review of financial statements with the client, it was noted that monies had been spent to replace some plantings. The client insisted that while they did approve the replacement, they were unaware a cost was involved. Our procedures require prior client approval on all proposals, so it was clear our team had crossed wires somewhere in the process. We agreed to reimburse the costs. Even though the reimbursement reduced our margins, the action showed staff that our company does what is right, regardless of the impact on our bottom line. Failure to do so would have had a far greater impact on our market reputation, as well as our internal reputation. While we did not plan to set an example, we were able to use this incident to reinforce our ethical culture.

The benefits of developing a strong ethical base are substantial. Such a base gives your company the ability to recruit and retain top-quality people. It allows you to foster a more satisfying and productive work environment, to build and sustain a positive market reputation, and to maintain trust both internally and externally.

What greater legacy can you hope for than to be known for your ethical dealings, whether on the witness stand or not?

MARY WILKEN CPM[R], IS THE CHIEF EXECUTIVE OFFICER OF COMMERCIAL REAL ESTATE CO. IN CHARLOTTE, N.C.

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TO VIEW THE IREM ETHICS PAGE VISIT WWW.IREM.ORG/ETHICS

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