- Posted by Ted Hull
- On October 2, 2019
- Board Role, Executive Limitations
Tone at the top is about an ethical culture where all employees feel responsible for doing the right thing. Since the board is at the top of the organization, what’s the board’s role in ensuring ethical culture?
One of the best definitions of culture I’ve heard is it’s just the way we do it. Every organization has a culture. Every organization has a way it does things, including its response to employee input or feedback. From the board’s perspective, the only question is what elements of culture would the board consider unacceptable.
An Executive Limitation addressing this will further interpret the usual encompassing statement in the largest Executive Limitations policy that prohibits “any organizational circumstance that is … unethical.” One definition of ethics is principles, values, and beliefs that help us define what is right or wrong. As it relates to corporate culture what would be considered by the board to be an unethical corporate culture?
Going through lunch bags in the staff fridge to see if someone else has a better lunch may be considered unethical – (and arguably illegal). But why is it unethical? Maybe the last place someone worked people did that. But here we don’t go rooting through other people’s lunch bags. We eat our own lunch and no one else’s. It’s just the way we do it. We want an environment where our employees assume that personal items won’t be plundered. Why? Because the Board has a value that it is unacceptable to allow a situation where employees feel unsafe. That can be having their lunch bags pillaged or by having their opinions discounted.
A potential Executive Limitation would describe elements of organizational culture that would be unacceptable to the board. It might be a culture where integrity is not understood to be paramount, where employees don’t feel safe expressing their opinions or offering suggestions, or where there is not a clear, safe way in which an employee can report unethical behavior.
When developing Executive Limitations, be sure your board has carefully considered whether it wishes to further delineate in lower level policies what it means by prohibiting unethical circumstances. And then, monitor regularly to ensure those policies are followed.