Page 16 - PCCA Journal 1st Quarter 2012

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PCCA Journal|1
st
Quarter 2012
16
who reported some form of economic crime, 13 percent were
impacted by bribery and corruption. Within the E&C indus-
try, that figure grew to 29 percent. Added to the significant
financial costs of unethical behavior was an identifiable cost
to employee morale: according to findings, morale within the
E&C industry is impacted more greatly by fraud than in other
industries (see Exhibit B). Clearly, there is cause for counter-
ing these issues, both at a human and company level.
Firms are motivated to implement a formal ethics program
by a variety of factors:
Company leadership might recognize a need to preserve
integrity, honesty, fairness, and ethics in the company
culture, especially after a period of growth.
A firm pursuing federal work must comply with FAR when
competing for and fulfilling contracts.
A firm has experienced an ethical and/or legal breech and
wishes to insure against a damaged reputation, heavy
fines, penalties or lawsuits, and criminal action against
employees.
Companies identify a vulnerability to unethical behavior
through a risk assessment or find that there is no process
or mechanism for handling reports from employees of
wrongdoing.
Unethical behavior inhibits healthy competition and im-
pacts the financial bottom line and reputation of the industry.
When one contractor takes shortcuts or performs work of
poor quality, they put other contractors at a disadvantage and
betray the owner’s trust. Ethical violations also have very
real ramifications for safety and quality. For example, use of
unspecified materials or shortcuts in procedure can compro-
mise structural integrity in the long-term. There are ways to
mitigate unethical behavior. The federal ethics mandate is
part of a larger trend toward incorporating and improving
corporate governance, risk management, and compliance.
Bill Skelley, human resources director at ColonialWebb, be-
lieves an ethics program can offer tangible savings. “One thing
you can measure in terms of cost is the number of employee
complaints that go beyond our internal resolution processes
and result in formal charges,” he said. “By providing train-
ing and counsel to our leaders, we have been able to diffuse
potential litigation and the high cost associated with it.”
Ethics programs provide a bridge between corporate cul-
ture and operational accountability. More than just added red
tape, a well-managed ethics program provides an opportunity
to maximize your firm’s performance.
Making Ethics Tangible
FMI spoke with 20 CEOs and compliance managers at leading
design and construction firms to establish a picture of the
ethics and compliance initiatives currently in practice. Some
interviewees had been with the same firm for decades and
were associated with long-established ethics programs, while
others were shaping relatively new ethics programs. Worth
noting is that all participants reported ongoing refinement
of their corporate policies and practices regarding ethics and
that all had fashioned the associated collateral (code of con-
duct, code of ethics, employee handbook, training modules,
scenarios, etc.) through a largely internal process. Although
many aspects of their programs are comparable, each firm
developed its own program based on experience, research,
and risk assessments and through trial and error.
Following are a list of best practices FMI has extracted from
the interviews.
Ethics starts at the top; the leader must champion ethics
policies, practices, and attitude.
Mitch Haddon, president and CEO of ColonialWebb, imple-
mented a values system and leadership playbook in 2005
after a period of company growth. The leadership playbook
details exact behaviors managers should exhibit throughout
the organization, a cue for the entire staff.
“Common sense doesn’t appear ‘common’ until you have
it written that way,” he explained. “The playbook for leader-
ship behaviors creates the value system at all levels.”
To counter the risk of ethics initiatives coming off as sim-
ply more bureaucracy, a demonstration of personal invest-
ment by leadership can invigorate staff. Granite Construction
Inc. had its CEO introduce ethics training sessions to demon-
strate that the initiative was important to the company. Doug
Woods, president of DPR Construction, is blunt about the
importance of leading by example: “If leadership is not com-
mitted to something, you know lip service will never make it
happen.”
Keep your ethics policy clear, and tie it back to key
values.
Factors like integrity, honesty, fairness, and ethics are often
Ethics Programs
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