Integrity At The Heart of Your Brand

When you hear the word “integrity,” you probably think of values and ethics. Integrity is part of a culture. It is a moral compass. It is ingrained in a person’s entire being, not just exhibited in the way she or he acts around other people.

Now think about the word “compliance.” Chances are, you’re having a different reaction. Compliance doesn’t connote an ingrained sense of right and wrong; instead, it suggests rules and guidelines for how a person should act around others, not how she should actually be as a person. You probably associate compliance with signing a statement saying you and other employees have read and understood a company code of ethics, as opposed to actually absorbing the organization’s values and taking them to heart.

What does it mean for your organization to have an ethical, integrity-centric culture, as opposed to one that is merely compliant?

At Interactive Services, we want to make your entire culture one that is based on integrity — one in which employees want to do the right thing because they believe in the mission and share the values of the company. Gone are the days of checking boxes to ensure that your employees have done a cursory review of the compliance regulations. Ethics and values should be at the heart of your brand, not an afterthought or a checkmark on a box.

Integrity is your brand, your people, and your mission. We are your partner in building a company culture where people want to do the right thing. Together, we will create a community where people feel empowered to do what is ethical and speak up—not just because they’ve acknowledged your compliance policy, but because these values are ingrained in the heart of your organization.

Using cutting-edge technology and a people-centered approach, we work with you to create compliance training that drives performance, retention, and brand identity. Compliance without integrity is meaningless, but together we can empower your organization and employees to create and celebrate a culture of compliance.

Let’s take a closer look at the difference between an integrity-based code of ethics and a compliance-based code of ethics and examine when it is appropriate to integrate facets of each.

Literally, integrity means having honesty and moral principles. It is a quality and state of being rather than a behavior. In turn, an integrity-based code of ethics is one that defines an organization’s guiding values while giving employees the leeway to interpret and define how they will internalize these values and behave according to their own standards of ethics.

Meanwhile, a compliance-based code of ethics tends to be more restrictive and clearly defined than an integrity-based policy. It evolves from government laws and business regulations and constitutes a set of rules to which all employees must adhere concerning a wide range of areas including criminal activity, interactions among and between employees and clients, dealings with other businesses, and more. It also outlines punishments for violating the code of ethics.

Famously, Nordstrom hands out an employee handbook to new hires containing a single rule:

Use best judgment in all situations. There will be no additional rules.

This is an example of an integrity-based code of ethics: it acknowledges an overarching guiding value and asks employees to act accordingly based on their individual moral compasses. (It’s important to note, however, that while Nordstrom does pass out this extremely brief card, it also has a more extensive policy with a lengthier set of rules and guidelines.)

In contrast, an example of a compliance-based code of ethics is Starbucks’ Standards of Business Conduct. In this policy, Starbucks outlines specific behaviors that are expected of employees in sub-sections including “How We Treat One Another,” “How We Treat Our Customers,” “Diversity,” and more. These sub-sections include questions and answers with hypothetical scenarios, such as sharing and reporting inappropriate jokes with colleagues, and concrete steps employees should take to address them.

Pros and cons of an integrity-based code of ethics

Pros

  • Integrity is essential to establishing a culture of ethics.

Many businesses recognize that without integrity, there is a lack of structure, cooperation, social responsibility, and trust. These values are central to achieving employee satisfaction and, ultimately, brand success.

  • An integrity-based code of ethics affords employees flexibility.

With an integrity-based code of ethics, it is up to each employee to interpret how she should carry herself and behave as a representative of the organization. Given the many different personalities and perspectives on what constitutes ethical behavior, this can be a positive step, enabling each individual to consider her own values and how she will act in a way that is ethical for her. Furthermore, a lack of rigidity can mean a more positive culture overall.

Cons

  • Flexibility does not always generate positive results.

With each employee having an individual interpretation of the organization’s expectations for conduct, it can be difficult to get everyone on the same page. After all, one person’s moral compass may not be identical to another’s. Actions and behaviors may end up in murky territory and create conflict with no clear outline for how employees should conduct themselves.

  • A lack of clear rules can present obstacles when wrongdoing occurs.

An employee makes a comment that another interprets as hurtful or suggestive. A manager engages in a transaction with a client that puts the company in jeopardy.

When there are no explicit rules and employees are expected to follow their own code of conduct, what happens when wrongdoing does occur? This is another downside of an integrity-based code of conduct. How can companies enforce punishments when they have not established what even constitutes wrongdoing or inappropriate behavior? It can be very easy for an employee to say,

I didn’t know I was doing anything wrong.

Pros and cons of a compliance-based code of ethics

Pros

  • Expectations of employees are clear.

Compliance-based codes of ethics generally offer clear guidelines and examples of what is expected of employees, as well as behaviors and actions that will not be tolerated. If an employee has a question such as, “Can I post this on social media?” she can consult the company policy and find a clear answer.

  • Procedures are in place for enforcing rules.

This also means that employees know exactly what to expect if they violate the terms of the company policy. The rules are obvious, and the consequences of failing to follow the policy are clear as well.

Cons

  • There may be too many rules for employees to remember and internalize.

Because there are often numerous rules in a compliance-based culture, it stands to reason that no employee will remember every single one. This means that while employees are signing off that they have read the policy, it’s unlikely that they’re actually internalizing the meaning or remembering everything they can and can’t do.

  • The rigid structure can negatively impact company culture.

A company that searches for wrongdoers and rule-breakers sends a negative message to its employees. Rather than promoting a culture of trust, the compliance-based model suggests that the organization expects employees to fail and diminishes morale.

Which code of ethics approach should your organization employ?

Ultimately, a successful organization that upholds the value of integrity will combine both of these approaches in establishing its code of ethics. Employees should understand what is expected of them while also recognizing the overall mission and wanting to support it. In practice, this might involve establishing several — but not an overwhelming number of — overarching ground rules and examples of different scenarios in which employees might find themselves, while still keeping the overall tone positive and emphasizing the ethics in “code of ethics.