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Codes of conduct and brand reputation: Learning from the News International scandal

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5th Sep 2011
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Is your brand's code of conduct an effective tool protecting your reputation? Or a fig leaf whose shortcomings will leave you exposed if things turn tricky? Isabel Collins explores.

In light of the News International scandal there is an important question that all organisations should be asking themselves: is the code of conduct an effective tool that actively helps protect your reputation, or a fig leaf whose shortcomings risk leaving you woefully exposed if things turn tricky? 

According to James Murdoch’s testimony before the Parliamentary committee investigating phone hacking, the key to business integrity is 'sending everybody a copy of the code of conduct'. 
Sorry James, but that’s the barest of bare minimums.
Of course it’s important every employee receives and reads a code of conduct but what really makes a difference is an ongoing process of staff engagement and top brass buy-in. 
So what should organisations like News Corp be doing to ensure Code of Conduct best practice? At Radley Yeldar, we have isolated three key areas:
  • The Code of Conduct needs to be well designed and more than just a book of rules – not just about compliance. It needs to be inviting as well as instructive.
  • Implementation of the Code – it is essential that employees are engaged with the code on an ongoing day-to-day basis so that it is both embraced and understood.
  • The culture - It is about having the right measures and the right culture in place, throughout the organization. Upholding the principles from leadership to frontline.
In a recent study entitled  “Commitment Beats Compliance: Why The Code Of Conduct Needs To Be More Than A Book Of Rules” we examined codes of conduct amongst the FTSE100 and FTSE250. We looked at each company’s website, annual report and CR report and scored each one against a defined set of 28 criteria – with the emphasis on the codes value as an effective piece of communication rather than its legal accuracy.
If the results were a report card, it would read – ‘could do better’.
Of the FTSE350, only 40% (142 companies) have a Code of Conduct in the public domain. Interestingly, although not a FTSE listed company (Murdoch chose to list in the US) News Corp does have code of conduct in the public domain which, according to Rupert Murdoch “we try hard to communicate as crisply as we can to everyone in the business”. However having a code of ethics publicly available does not equate with ‘job done’ – indeed of the 40% of those FTSE350 who do, most are nowhere near robust enough to avoid the ethical turmoil News International is currently experiencing.
The research also revealed that of those companies with codes in the public domain (40%) only 23% encourage individuals to be responsible and use common sense; 16% are visually engaging and only 13% have learning aids to help staff understand and apply the code.
None of which is good news. 
However it’s not all doom and gloom. Of those FTSE350 companies with a code of conduct in the public domain 80% encourage employees to speak up; 78% use plain English (making it easier to understand) and 70% emphasise a commitment to non-retaliation. But, it’s still not enough.
And organisations need to do more and do it better because good Code of Conduct practice makes good business sense. Reducing the risks and costs of contravention, increasing the power and value of reputation and enhancing employee engagement and consequently efficiency are just some of the myriad benefits.
Organisations need strong ethics for the same reason individuals do – to guide behaviour, weigh-up options and help them steer clear of trouble. Today, savvy customers don’t ask that companies maintain a certain moral standard; they demand it. Integrity and transparency are the order of the day, and any business unwilling or unable to deliver, risks raising suspicions amongst the very people on whose trust it depends. 
It’s clear which description applies to News International; it’s equally clear that strengthening your code of conduct could be the best business decision you’ve made in years.
Isabel Collins is Head of Employee Engagement at Radley Yeldar and author of Commitment Beats Compliance.

 

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