From Paper to Practice: The Real Test of Corporate Ethics

We are witnessing a range of global trends shaped by key concepts such as transparency, anti-corruption and accountability. One term that continues to appear in these conversations is ethics.

Recently, I had the opportunity to participate in a closed-door discussion on ethics, which made me ask myself a simple question: has the code of ethics in some companies become little more than a decorative element?

From the perspective of communication management, a code of ethics can sometimes remain nothing more than a well-written document published on a corporate website, shared on LinkedIn or, less frequently, included as an appendix to an employment contract. In practice, however, it can easily become a document that exists on paper but has little influence on everyday decisions.

The true value of a code of ethics does not become visible when everything is simple. It becomes visible when leaders and managers are required to make difficult decisions.

Does your code of ethics guide decision-making when profit and its distribution are at stake? What happens when there is pressure from different stakeholders? How do you respond when a company or an individual faces a conflict of interest?

These are precisely the situations that reveal whether ethics is truly part of an organisation’s culture or merely a formality.

Following the discussion, I outlined several open questions that I believe every management team should consider if it wants to transform ethics from a PR formality into a genuine part of organisational culture.

Do employees actually understand the code of ethics?

When employees sign their contracts, do they receive clear information about the company’s code of ethics? Is it simply another document they are expected to read and sign, or does someone actually take the time to discuss its meaning with them?

A code of ethics should not be a document employees receive once and then forget about. Information and education should help every employee understand what its principles mean in everyday work and how they should be applied when a real ethical dilemma arises.

The real test comes when business results conflict with ethical principles.

Imagine an employee who has achieved all assigned financial targets and KPIs, but it is later discovered that they violated the company’s code of ethics in the process. Would that employee receive a warning or face consequences? Are there clear procedures for such situations? Or would excellent business results outweigh the way in which those results were achieved?

From my professional experience, I am well aware that situations like these can expose a company to a serious crisis.

How safe are those who choose to speak up?

Throughout my career, I have encountered companies and organisational structures in which the head of a particular department had almost complete control, while employees within that department had no genuine opportunity to report a potential ethical violation committed by their superior.

This raises a very simple question: can an employee in a junior position report an ethical violation by a superior without fearing retaliation, losing their job or being marginalised?

What is your position as a leader or manager when it comes to such reports? More importantly, are there procedures that give employees confidence that their concerns will actually be heard?

Simply providing a reporting channel is not enough if people do not trust the system that is supposed to protect them.

Deadlines, results and pressure

Digital transformation has changed the way we work, but it has also changed the ability of managers to assign new tasks, targets and deadlines almost instantly. Within minutes, pressure can be created that sometimes becomes excessive, particularly when expectations are unrealistic.

Have we ever considered whether these deadlines and targets can encourage employees to bypass certain ethical standards simply to achieve results or, in some cases, to protect their jobs?

Managers and leaders often have bonuses linked to performance. Their role is to achieve targets and encourage others to do the same. But where does legitimate business pressure end, and where does pressure that pushes people towards behaviour contrary to the company’s stated values begin?

A code of ethics needs to provide more than a general statement when answering that question.

The code of ethics in the digital age

Another important question is whether existing codes of ethics are truly adapted to the digital environment.

How does your code address the everyday use of artificial intelligence? How does it approach user privacy and data protection? Where are the boundaries when it comes to information about employees and their behaviour on personal social media accounts?

Are employees allowed to publish messages related to their company on their private social media profiles? If so, to what extent? Are there clear rules in place, or does the company react only after a problem occurs?

In my own work, I also use services provided by specialised agencies, including online forensic analysis that I commission from the Slovenian agency Press Clipping when needed. The development of such digital capabilities raises another important question: where does legitimate analysis end, and where does the area begin in which clear ethical boundaries must be established?

I believe that a comprehensive study would show that many companies still do not sufficiently address the digital environment, artificial intelligence and the new ethical questions arising from their everyday use.

Do we measure ethics or simply claim to be ethical?

If a company has established procedures and provides training, it is equally important to examine whether those mechanisms actually work in practice.

A high number of anonymous reports, for example, may indicate that employees do not have sufficient trust in the existing system or in open communication channels. It is also important to monitor how much time passes between the initial report of a potential ethical violation and the closure of the case, including the implementation of appropriate measures in accordance with internal policies.

Those policies also need to evolve continuously because the environment in which we operate is changing faster than ever.

Sending employees a video about the code of ethics once a year, followed by a few clicks to confirm completion, is not the same as genuine education.

Of course, the appropriate form of training depends on an individual’s position and level of responsibility within the company. For some roles, basic video training may be sufficient. For others, continuous discussions, workshops and simulations of decision-making under pressure are necessary.

Companies should also ask themselves whether ethical leadership is actually recognised and rewarded. How much value is placed on it? Is ethical behaviour incorporated into the way managers are evaluated, or are they ultimately judged only by the results they deliver?

The code of ethics as an operational risk, not a PR obligation

Leaders and managers often find themselves in difficult positions because they regularly face uncomfortable choices, pressure and decisions that do not have simple answers.

This is precisely why the real implementation of a code of ethics begins when a company and its management stop viewing ethics as a cost or a PR obligation and start treating it as a fundamental operational consideration and a foundation for sustainable business.

Finally, there are several simple questions worth asking.

When you started your current or previous job, were you genuinely introduced to the company’s code of ethics? Did anyone explain what it meant in practice? Did you know whom to contact if you witnessed a violation?

And perhaps most importantly, do you believe that ethics in today’s business environment is still merely a formality on paper, or is it a genuine value that can contribute to more transparent business practices, more open communication and, ultimately, a more productive organisation?