Is a code of conduct important?

Code of Conduct

Is a code of conduct important?

‘Don’t violate your own code of values and ethics, but don’t waste energy trying to make other people violate theirs.’

Melody Beattie – American self-help author

What is a code of conduct and is it important for a business?

A code of conduct is a set of rules or standards that capture the beliefs and ethics on behavioural expectations in the organisation. There are many types of business codes ranging from financial reporting, conflicts of interest, health and safety, and communication to employment discrimination. A code of conduct sets out a common standard of performance for employees, while respecting the rights of employees and providing a framework for acceptable behaviour.

One of the best examples of a code of conduct is Rotary International’s Four-Way Test for use in professional and personal relationships:

  1. Is it the TRUTH?
  2. Is it FAIR to all concerned?
  4. Will it be BENEFICIAL to all concerned?

Codes of conduct are linked to corporate or organisational values and the mission statement. A good demonstration of the use of corporate values as a guide for decision-making is this example from one of the transport companies I worked for:

‘If you ask yourself the following five questions and you can answer ‘yes’ to all of them confidently, you should go ahead and make the decision:

  • Will the decision help me exceed customer expectations?
  • Is it respectful to all individuals – customers, suppliers, employees and community residents?
  • Does it further our goal of continuous improvement?
  • Is it in the long-term best financial interests of the company?
  • Can I do it safely and ethically?’

If the answer to any of these questions is ‘no’, then the decision you are about to make is unacceptable.

The values, in the form of a card that could fit into a wallet, were given to all staff so that the values could be referred to when required.

In our logistics business, we had a values statement which was as follows:

‘Customers and employees are our greatest assets. The company is committed to providing the highest level of service by working with its customers in an environment of continuous improvement through the introduction of new technology, superior systems, staff training and development.

Work performance and service quality is enhanced by giving responsibility to supervisors on the shop floor. The flat management structure drives the efficiency and effectiveness of the business. It has enabled the company to react quickly to opportunities and requests from current and potential customers.’

However, the statement did not set out specific values driving organisational behaviour – such as work standards, accountability, being open and fair, or personal interactions and behaviour. It did not summarise what needed to be done – for example, ‘we will celebrate success and encourage initiative’ – and what will not be done – for example, ‘we will not tolerate poor performance or rude and condescending behaviour towards others’.

Why was this important?

Because we did not have these values clearly defined, we could not use it as a basis for managing interpersonal conflict when the business was struggling in one area. The failure to accept responsibility for continuing unacceptable performance by a senior manager  who was in denial, and not having a clear values statement, resulted in an acrimonious and deteriorating situation.  Unfortunately, I did not manage the situation constructively at the time and, out of sheer frustration, I allowed my emotions to override a common sense approach to resolving the situation satisfactorily for the business.

Conflicts within organisations are inevitable. The challenge is to manage conflicts when they arise in a constructive way.

Does your business have a code of conduct?

Does it clearly set out the acceptable standards of behaviour as well as a framework to manage conflict?

For example, does it say ‘we will respect and support each other as individuals and members of the team’ and ‘we will recognise both group and individual results’ and ‘we will not ignore achievements or tolerate poor performance’?


Can you recognise an organisational psychopath?

Can you recognise an organisational psychopath?

“There’s an absolute lack of conscience, lack of remorse, and lack of guilt. They’re manipulative, superficially charming, and pathological liars. They like conning people and there’s a grandiose sense of self-importance.”

Dr John Clarke – expert on work psychopaths

For the past 6 months, the news media has been full of stories of inappropriate and unacceptable behaviour by men in powerful positions, whether its sexual abuse allegations against movie producer Harvey Weinstein or Australian TV presenter and producer Don Burke’s alleged sleazy and bullying behaviour, toxic workers are certainly topical.

Toxic employees can have a detrimental effect on an organisation. I wrote about this issue in a previous blog. Furthermore, the failure to take action can be costly in terms of morale and profits. It also takes away the positive energy required for managing an organisation.

One form of toxic employee is the ‘organisational psychopath’ 

The term psychopath conjures up images of evil murderers from a Hollywood movie such as Hannibal Lector in the Silence of the Lambs. However, they generally don’t murder people instead they destroy work colleagues and their subordinates as well as seriously damaging the organisations they work for.

Have you ever worked with or for an organisational psychopath?

How do you recognise an organisational psychopath?

They are not normally the overbearing, rude and unreasonable boss. They far too clever for that and often remain undetected for years in organisations.

I can remember working for one many years ago. He was superficially charming, had excellent oral communication skills, was outwardly extremely confident and ‘managed up’ exceptionally well.

Within 3 months unbeknown to me, he was wanting to dismiss me. There were no conversations about performance and he certainly gave me no assistance in my role. I later found out that he had previously forced the departure of several other employees. What alerted me was him undermining and subtly criticising the staff under my control. He was known as the ‘the smiling assassin’ and was displaying the psychopathic characteristics of lack of conscience.

My wife came to work to pick me up one afternoon with our 6 month old baby. He was dismissive and rude. This should have rung alarm bells, as one of the characteristics of a psychopath is a lack of empathy.

He was described as a hero by the business owner, as under his division, the business had grown significantly in terms of profit and revenue using new technology. I found out later that another executive was instrumental in advising and assisting him in implementing the new technology and opened the doors with existing customers. This shows three other characteristics of psychopaths, claiming credit for others work, being manipulative by managing up and using excellent oral communication skills.

Like all good organisational psychopaths, he left the organisation before he was found out. Upon leaving, the final confirmation fell into place. I was to complete a project he had commenced and found out that much of what he had claimed had been completed had not. Yes, the final characteristic was being a pathological liar.

The experience of working for this organisational psychopath left me somewhat scarred, losing my confidence and feeling demoralised. However, I learnt how to recognise organisational pathological behaviour and made a pact with myself never to work with or for one again and help others to manage who had been affected by their behaviour.

The following link provides a good summary of how to deal with them.

Read it and refer to it when needed…………………

Business Values – are they of value?

Business Values – are they of value?

“When you are led by values, it doesn’t cost your business, it helps your business”
Jerry Greenfield

Many business advisers and media commentators maintain that business values are essential for a business to be successful. Many CEOs and business owners think this is just “consultant speak” or just a marketing ploy to drum up business. They think the prime purpose of business is to make money.

An ongoing debate in the business sector seems to be around whether or not business values are of any value at all. When Moses received the Ten Commandments on Mount Sinai what was their purpose? To give clear expectations on how God expected people to behave. To dictate what someone of the Christian or Jewish faith can and cannot do. So in our modern world has anything changed – are values in business important?

Think of some recent business failures.

These may illustrate the point about whether or not values are important. Remember Enron’s collapse in 2001 after the company defrauded investors and the senior executives were gaoled? What about the late Alan Bond who deceptively siphoned off shareholders’ funds from Bell Resources to prop up his Bond Corporation in the 1990s? Unfortunately not only were shareholders’ funds lost. People also lost their jobs.

Wayne Bennett, an Australian National Rugby League (NRL) coach is a positive example of the ‘value of values’ in an organisation. In over 25 years of first grade coaching, his teams have won 7 premierships. Quietly spoken, at times appearing unemotional, much of Bennett’s success could be attributed to his high values which flow onto the players in the teams he coaches. Talent is not enough, players who do not meet behavioural standards, work ethics or have the team’s interests at heart, were quickly removed from the team. Bennett showed his true values when he sacked Wally Lewis, as Broncos captain. Lewis was also an Australian captain. The public outcry was overwhelming, with irate fans calling for the Broncos to re-instate Lewis and sack Bennett. He had the long term interests of the club at heart and the Broncos went onto winning more premierships.

As a manager or business owner, business values and your values are important. Sound business values lead to better places to work, more satisfied customers and higher profits. Furthermore, they provide guidance on how to handle everyday problems. This is why values have expectations.

As a manager or business owner, people whether employees, customers or the public are watching……

“Do as I say, not as I do”

“Do as I say, not as I do”

This is not a really a quote, but an expression. The derivation is believed to originally come from the Bible, Matthew 23 “For they preach, but do not practice” when Jesus highlighted the hypocrisy of the Pharisees in the Temple. Years later a book by Peter Schweize titled Do as I Say (Not as I Do): Profiles in Liberal Hypocrisy sought to expose the public utterances and conflicting private actions of leading ‘progressive’ USA politicians.

What relevance does this have to being a good manager?


Let me give you an example. It was a condition of site entry in a business I was involved with that all staff had to either sign in or use an in/out who’s on site entry board. Two senior managers, including the CEO rarely did this, despite it being mentioned and noted in safety and management meetings. One day we had a fire evacuation drill which is mandated by law. This is where the building is evacuated and the site safety representative calls out the names of those on-site to ensure everybody is out of the building. After the names were called out you are asked to stand to one side. This is to ensure that the fire safety drill has worked successfully.

In this case, two people were left with their names not called out – the two senior managers. One made some excuses. The other was embarrassed.

How did this look to staff? Well you can only imagine.

Staff pick up hypocrisy quickly, word spreads and the authority of management and company policies are eroded. Also the moral authority or status of individual managers is severely weakened. In this case it seemed to demonstrate to the assembled staff that either safety was not important and/or that there were two sets of rules. I witnessed plenty of sniggering and hushed conversations at the time.

Another example is the wearing of safety vests in industrial environments such as warehouses and construction sites. In the business mentioned earlier, it was a requirement for all staff to wear safety vests and this was enforced by the supervisors. However some senior managers still continued to walk around the site without safety vests as required by company policy. Warehouses are potentially dangerous places, especially with fork lift trucks and other equipment on site. Even worse, this action unsettles operators who have to perform their duties with a heightened level of concern that, at any time, plain clothes staff can and will wander the warehouse, exposing all parties to risk. These actions undermined the authority of the supervisors and in discussions with them, reduced the respect for the managers who did not abide by company rules.

We are often bombarded by media coverage of politicians in safety vests, goggles and hard hats on the campaign trail. Whilst this may seem like overkill, it does send an important message. What would be the affect if the politicians did not wear the prescribed person protective equipment?

Management is about integrity and leading by example – you can’t expect staff to perform or conform to the required standards if you as a manager or supervisor don’t. Do the right thing at all times, and your staff will respect you for it. Don’t and you will pay the price, at the least in lost respect and poor compliance and at worst – an avoidable site injury or fatality.

As a manager your actions are important to the organisation, yourself and the staff…

What is the cost of safety to a business?

What is the cost of safety to a business?

“The purpose is clear. It is safety with solvency. The country is entitled to both”

Dwight D Eisenhower, US President

Industrial safety, Occupational Health and Safety (OHS) and now Work Health and Safety (WHS) is becoming increasingly more prominent in the media and especially in state of Victoria where the government safety agency WorkSafe runs high profile media campaigns that tug at your emotions.

Many business owners see safety as an overhead cost that should be avoided where possible.

Is this good business practice?

Can poor safety be detrimental financially to your business?

Many business owners would see it as a risk worth taking. Is it?

Just recently a major transport company lost nearly $100m of business primarily due to their poor safety record, highlighted by a fatal accident that caused the death of two people in 2013.

A major multi-national company would not allow them to tender on a major contract because of their substandard safety. Poor safety is often a symptom of poor systems and management. If safety is poor it is likely that there are other major issues with the business. The ramifications go further. The holding company in the past month has had $239m wiped off its value and now 540 jobs will be axed. Clearly poor safety does not pay!

By way of example, I managed a major interstate transport division for a public company where the managing director was passionate about safety. The evidence was clear; vehicle servicing schedules, management of driver hours, no speeding trucks, clean trucks (a good sign of a well-managed transport business), driver training and rigorous selection.

The evidence of success for the division I managed was emphatic. Low driver turnover, high truck utilisation, high profitability and no fatal accidents in the 6 years I managed the business. How was it done?

It was quite simple. A management system was implemented where drivers’ performance was reviewed weekly (over 120 drivers), drivers were involved in managing their own performance, driver selection criteria was rigorous and maintenance schedules were strictly adhered to. Supervisors and drivers were involved and a culture from senior management that safety was paramount.

As a business owner or manager, next time you wish to cut corners for safety keep in mind the consequences…………….and remember to ask the question: “is the business at risk?”