Articles

Ethics: A Critical Business Measure for Marketers Too
by Barbara Palmer, Principal, Palmer Communications As it appeared in the American Marketing Association newsletter of the NY Capital Region Chapter, May 2006.  www.nymarketing.org/capitalregion.

With the Enron trials gearing up, the topic of corporate ethics is figuring prominently again in the news. Several years ago, at the dawn of the Enron era, news stories appeared almost daily about ethical breaches in every kind of organization: corporate, religious, athletic, academic, military. Although the onslaught of such news has diminished, the subject of ethics is firmly on management’s dashboard. Marketing professionals must understand its importance to the credibility of organizations among their customers and markets, as well as their shareholders, peers and partners. It’s more than the latest management fad.

With ethical transgressions seemingly everywhere, the federal government has stepped up its watchfulness. In the realm of public companies, where trust is critical to safeguard shareholders and other stakeholders as well as the economy, Sarbanes-Oxley was enacted in 2002. SOX focuses on public companies and their corporate governance, primarily in financial reporting and disclosures.

In 2004, amendments were made to the Federal Sentencing Guidelines for Organizations, which are more far reaching and relevant to all but the smallest organizations. The FSGO were initially established in 1991 as voluntary guidelines for all types of organizations – public and private, for-profit and non-profit. The 2004 amendments broadened them to emphasize ethical, as well as compliance, issues. Moreover, the FSGO amendments call for the need for accountability not only through compliance programs, but through ethical programs as well.

With government calling for ethical as well as legal compliance, all types of organizations are paying attention now to the role of ethics in everyday business. But, as important, they must understand that compliance and ethics are two different things. Compliance is black-and-white; it’s about the law and conducting business according to non-negotiable standards. Recently, an article in The Wall Street Journal (January 9, 2006) tells how corporations are increasingly forming Board-level compliance committees to monitor and enforce mandates ranging from anti-bribery to worker safety.

Ethics, on the other hand, is more grey than black-and-white. Ethics encompass personal and organizational values, moral standards of right and wrong, and duty (the individual vs. peers, vs. the organization). Ethical dilemmas surface when tough choices involving competing values must be made. What’s more, the day-to-day behavior resulting from such choices is what adds up to organizational culture – norms that are a powerful unspoken force. The Ethic Resource Center’s most recent (2005) National Business Ethics Survey finds that while formal ethics and compliance programs have some impact on ethical organizational behavior, organizational culture is more influential.

Because ethical cultural issues can be so subtle, training and discussion are needed to raise awareness so employees know what’s at stake when they make a choice to speak or act. This heightened awareness must especially permeate the marketing professional’s thinking and communications because they are the keepers of organizational identity and brand and a key bridge to the external world. The external voice needs to match the internal (ethical) culture, for integrity and authenticity.

Such heightened mindfulness creates thinking, intentional, problem-solving cultures – qualities that have bottom-line business benefits in addition to moral and legal benefits.

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