Even though most workers know that it's wrong to do so, many still filch office supplies for their personal use. As a corporate "crime," such pilfering is likely grudgingly viewed by many companies as an annoying fact of life around gift-giving times.

Yet no matter how innocent it appears to be, theft of company goods and services is wrong, immoral, and unethical-and sends a signal that a company's ethical compass may not be aimed true north.

Ethical lapses are widespread

According to a recent survey by the Ethics Officers Association, a nonprofit organization composed of corporate ethics and compliance officers, in conjunction with the American Society of Chartered Life Underwriters, half of U.S. workers have committed one or more illegal or unethical acts in the past year.

These acts included stealing office supplies, abusing sick days, massaging quality control figures, and using or abusing drugs and alcohol while on company time. Other types of unethical behavior include:

• Conflicts of interest
• Disclosure of personal or proprietary information
• Inappropriate (giving or receipt of) gifts, favors, and extra compensation
• Bribes, gratuities, or padding of quotes in order to unfairly win a deal
• Use of company equipment for private gain
• Illegal copying of software
• Securities violations such as insider trading
• Deliberately false recordkeeping
• Acts of discrimination

A recent survey by the Society for Human Resource Management (SHRM) echoes the Ethics Officers Association's findings. Fifty percent of HR managers surveyed by SHRM have witnessed unethical behavior, and 50 percent have taken part in unethical behavior. Such wrongful behavior is why businesses across the United States are developing codes of conduct and ethics and values statements.

Although still more common in health care, financial services, and among government contractors, the business ethics movement spread more widely across U.S. businesses during the 1990s. Now, three-quarters of large corporations have a code of conduct that spells out improper behavior and details the repercussions for ethical lapses in the workplace.

HR experts and labor and employment attorneys agree that businesses-regardless of their industry or size-should craft a code of conduct or ethics policy to ensure that all employees are aware of and understand the basis for making ethical decisions on the job. Failure to have such a code lays a company open to liability, should improper behavior occur.

The stakes of ethics

A company's ethical standing clearly must emanate from the top. Therefore, your senior executives must devoutly believe that righteous behavior is desired, and, acting as role models, they must strive to always conduct themselves in an ethical manner. Savvy senior managers are usually quick to embrace an ethics program, because they know there is a direct correlation between ethical corporate behavior and a robust bottom line.

They also know that news reports of unethical behavior or illegal activities can give a business a black eye-among employees, customers, suppliers and vendors, and influential members of the public-that can't easily be healed. A tarnished business reputation often is the first step toward business insolvency.

For example, a research and consulting firm noted for its objectivity in its industry had that reputation temporarily soiled recently. One of its analysts, in an interview with reporters, touted a particular business as a market leader without divulging to the news media that she held an ownership position in that company. When her ownership became public, the analyst was forced to resign from the firm.

Developing the program and policy

At a recent meeting of the New England Human Resources Association, speakers included Keith Greene, SPHR, director of organizational programs for SHRM. One of Greene's specialties is corporate ethics, which he discussed with a workshop audience. His list of the 10 critical components of a successful ethics program begins with ethical leadership-the element just discussed.

1. Greene urges HR to obtain the highest-level officer possible as the primary sponsor of an ethics policy. If no one in top management agrees to fill this role, says Greene, don't let that halt the program. "Do it yourself," he counsels.
2. Create ethics vision and values statements for the organization.
3. Gather a task force or committee to coordinate the effort.
4. Derive a corporate code of ethics from the vision and values statements. (It's advisable not to give this task to the lawyers but to your managers, who live and breathe the day-to-day realities of operations. Codes developed by attorneys tend to be lengthy, full of legal language, and centered on laws and regulations.) Also, be sure to include lists of acceptable and unacceptable behavior in such likely problem areas as conflicts of interest, time card and expense reporting, suppliers and consultants, and company resources and supplies.
5. Name an ethics officer (who Greene feels should be, but doesn't have to be, the HR director. Making it HR helps to position the function as objectively balancing advocacy between employees and top management).
6. Devise a communications strategy for the program (remembering to distribute the code and have employees acknowledge receipt and understanding through their signatures, as well as including a brief description of the code in interviews with prospective new hires).
7. Conduct training, including plenty of sample scenarios. After all, the goal of the program is to help employees avoid doing something wrong, not to trap them if and when they do.
8. Establish an ethics 'hot line'-preferably one that permits employees to report suspected misconduct anonymously. Consider making this a service of your EAP and/or managing it through an outside contractor.
9. Develop appropriate rewards for employees who 'do the right thing.'
10. Monitor and continually fine-tune your ethical standards.

Mechanisms for reporting and investigating suspected violations are essential, along with sanctions for violations. These may range from warnings, demotions, and temporary suspensions to termination and referrals for criminal prosecution, depending on the severity of the misconduct. If your policy has no teeth, it's likely to be perceived as a sham.