Small Business Consultations



530 West Ojai Avenue, # 209
Ojai, CA 93023

Over the years, in addition to his clinical practice, Dr. Gladstone has been asked to provide consultations to small businesses and corporations (e.g., medical practices, law firms, private schools, engineering corporations), to help resolve employee communication and relationship problems.

As a licensed clinical psychologist and owner of a thriving private practice for over 30 years, Dr. Gladstone is in a unique position to apply knowledge of psychological and behavioral principles to business and corporate employee problems, which are inherently psychological in their nature. His consultations frequently involve education and coaching of senior management and supervisors, instruction in communication skills, problem solving and methods of motivation, and the development of a Code of Ethics or Standards of Conduct tailored to the specific values and needs of the corporation. The vast majority of employee problems are addressed and well-managed by a carefully crafted and effective Code of Ethics. For this reason, the development of a Code of Ethics is usually a central feature of Dr. Gladstone?s corporate consultation.

What is a Code of Ethics? Ethical codes are not new. Perhaps the first documented codes for guiding individual and group behavior emerged in the ancient Vedic tradition of India dating back more than 5000 years. They were called Smriti, divinely inspired descriptions of basic laws of nature; Shruti, codes of conduct derived from those laws; and Purana, descriptions or case studies illustrating the practical application of the codes in everyday life. Other examples of Codes of Conduct include the Ten Commandments of the Old Testament, the Five Pillars of Islam, Ten Precepts of Buddhism, the Jewish Torah and countless warrior codes. More recent examples of ethical codes and codes of conduct include the Magna Carta (1215 A.D.), The Declaration of Independence, the Constitutions of democratic governments, the American Bill of Rights, and scores of codes developed by professional groups and universities. Commercial businesses and corporations are perhaps the most recent entities to develop comprehensive ethical codes of conduct. In business, ethical codes articulate and define corporate values, the needs of employees, acceptable and unacceptable behavior for all employees, and the consequences of violating the codes. There is no single, one-size-fits-all or correct code. Ethical codes are as varied as the organizations that create them, but it is essential that the Code developed by each corporation is created from within, with participation of all employees, and reflects both corporate and employee values.

A Code of Ethics is a systematically organized written set of principles or guidelines for the behavior and decision making of members of a group or an organization.

Why do businesses and corporations need a Code of Ethics?

 There are many reasons why corporations need a Code of Ethics. Certainly the need for guidelines governing the behavior of individual employees stems partly from egregious behavior of some that may bring harm to the public, to clients and customers and therefore to the company and to the professions it employs. In the age of the world wide web, awareness of our interdependence upon one another is enhanced and we are challenged to become more accountable for our behavior and more skilled at self-regulation. Recent scandals that have captured public attention because of their enormous impact on people and society, (e.g., Enron, etc?.), have heightened public awareness of the need for more explicit and effective ethical standards. In most cases, these scandals have involved unethical or illegal behavior on the part of top management as well as lower level staff. In 2002 Congress passed into law the Sarbanes-Oxley Act requiring transparency in accounting practices in corporations and demonstration of a corporation's "best effort" to create a working Code of Ethics governing employee behavior at all levels. However, there are other reasons beyond the misbehavior of a few for companies to develop a Code of Ethics.

In the broader perspective a Code of Ethics will help corporations achieve the following:

Articulation of corporate values to all employees, from the Board of Directors to non-professional staff.
Increase accountability in all employees, including Directors and Managers.
Inspire loyalty and dedication in employees.
Improve the performance and financial success of the company.
Define acceptable and unacceptable behavior and its consequences.
Reduce and manage risk by giving employees clearer guidelines for decision-making.
Enhance the public image and reputation of the corporation.
Comply with Federal Regulations (e.g., the Sarbanes-Oxley Act of 2002 and Federal Sentencing Guidelines for Organizations, 2004). *

* Copies of the Sarbanes-Oxley Act of 2002 and Federal Sentencing Guidelines for Organizations can easily be obtained online. Not all companies are required to show their "best effort" to comply with Sarbanes-Oxley Act.  It does not apply to privately held companies.  However, the benefits of creating a Code of Ethics are numerous, even for small companies and businessesof all kinds.  It is well worth the effort, even if it is not a requirement.

What are the Functions and Benefits of a Code of Ethics?

A corporation?s Code of Ethics becomes a public statement to all employees, customers, shareholders, and others about the corporation?s values, ideals and standards for doing business in the community and the world at large.

Primary functions of a Code of Ethics include:

Providing language for leadership to communicate its standards. Defining unacceptable (unethical) behavior, sanctions or consequences. Raising the standards of respectful, ethical behavior for employees Legitimizing and encouraging discussion of ethical and unethical behavior among employees. Encouraging and supporting the reporting of unethical behavior or misconduct. Providing guidelines for processing ethical complaints and correcting misconduct. Assuring employees of confidentiality and safety in the reporting process. Encouraging employees to seek advice before making difficult decisions. Protecting the welfare of everyone connected with the corporation.

Primary benefits of a Code of Ethics include:

Improvement in relations between leadership and other employees. Higher levels of job satisfaction and productivity among employees. Lowering risks inherent in undetected, unreported unethical behavior. Establishing objective measures for evaluating unethical behavior. Empowering employees to make better, wiser decisions. Creating a foundation for revising standards as awareness grows and circumstances change. Return on Investment for developing a Code is broad and measurable. Security of being in compliance with Federal regulations.

What are the steps in creating your Code of Ethics?

The long-term success of any Code of Ethics will depend upon some level of defined participation by everyone to whom the Code will apply, including everyone from hourly staff to top management. While some employees may decline to participate or be disinterested, they should all be given opportunity and encouragement to participate and they should be educated about the Code of Ethics. Thoughtful planning and organization by the top management is required to work through the steps to developing the corporation?s Code of Ethics.

The steps I recommend for developing a corporate Code of Ethics are based on those developed by The Ethics Resource Center (ERC), a non-profit organization in Washington, D.C. Since 1922 the ERC been helping schools, businesses, and governments develop ethical work environments. The ERC recommends roughly 15 steps divided into eight phases as below:

Planning the work effort:

Getting the Management Team’s unanimous support. Creating a Code Development Committee or Task Force. Determining goals, objectives and measures of success.

Collecting baseline data:

Interviews with senior or key employees. Create focus groups or discussion groups. Create and distribute a survey, analyze and report data.

Drafting the Code:

Committee identifies central values from survey data. Committee describes content areas of the Code.

Defining reporting and enforcement processes:

Receiving complaints, monitoring compliance. Determining disciplinary measures.

Leadership reviews the Code:

Code reviewed by management leaders and legal counsel. Determine that Code complies with law.

Obtaining approval of Code by Management Team or Board:

Approval of final draft of Code.

Revise Code draft and distribute to all employees:

Determine methods of distribution, communication & education.

Scheduling Code updates and revisions

Concluding Remarks

The development of a corporate Code of Ethics is a fairly intensive undertaking requiring thoughtful planning, organization and participation of many people. The most effective and durable Codes are those created from within the company with participation of people at all levels of employment. The role of a consultant is to guide selected company personnel through the steps to the final draft and its implementation and maintenance. While this looks like a lot of work for people already very busy in their job assignments, it can be fun and inspiring and the final result will benefit the corporation for generations to come.

Anyone interested in corporate consultations or in developing a corporate Code of Ethics can contact Dr. Gladstone via e-mail at [email protected], or by telephone at 805-646-9724.

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