How We Communicate About Business Ethics

“Watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become habits. Watch your habits, for they become character. Watch your character, for it becomes your destiny.” Author — Unknown There are many good reasons to be able to communicate effectively about ethics. One is, industry and especially mortgage banking has lost a lot of the publics’ trust and by all estimations needs to regain some of that back. If you are doing something about that but are not able to express it, the benefits of your efforts may be a long time in coming. Closer to home, as society continues to react to the financial crisis, our front line employees are repeatedly asked to deliver government sponsored programs or comply with under-defined regulations which constantly yield unintended consequences. Another reason is that business schools are beginning to say that they have historically relied too heavily on quantitative aspects of business and are identifying qualitative aspects missing from their curriculums. So our bright young graduates and tomorrow’s leaders have no experience discussing ethics. Can we competently discuss ethics within our environment? A recent study of mortgage banking leaders suggests that senior leaders discuss ethics amongst themselves pretty freely, they discuss them with their employee base a fair amount and with their board of directors the least. It also found that leaders discuss ethics more frequently than attempt to write about it. Over 90% of those who participated in the survey said their organizations had a Code of Ethics, so the first step in a foundation with words and thoughts does exist in those environments. While leaders were confident in their own ethical clarity and observable ethical actions, they were far less confident in their employees’ ethical understanding. In the absence of senior leaders talking and writing about the industry’s or firm’s ethics, are employees only left with the narrative formed by the media or politicians? Will that improve the industry’s ability to add its voice to the public debate about who and how home finance is structured in the future? Less than half the survey respondents indicated that their firms had a methodology to deal with ethical issues. However, an ethical framework needs to be in place to enhance communication and improve the influence in society the industry has in determining its future. (... maybe - to improve industry’s prospects of determining its own future through its influence in the society?) An ethical framework uses the vision/mission of a planning process (purpose), and a code of ethics to align the firm’s values. These values are put it (incorporated?) into the firm’s documentation (policy & procedures, job descriptions, performance reviews and any other documentation which supports manager and employee decision making. It requires the firm to train its employees and managers on ethics adequately and regularly. Additionally, to ensure usage, your ethics key performance indicators must be identified which are usually answers to stakeholder issues and questions. Then create reports and score cards to track the indicators and measure improvement on a topic. Finally introduce into standing committee agendas these reports and score card to reinforce that managers and employees are accountable to perform these tasks regularly and to be fully operationalized. The development of this framework along with embracing it will create a common language about ethics within your organization as well as help align your firm’s values with its people’s decision making. This foundation will support enhancing your firm’s voice in the debate on the future of the industry.