The economic downturn may have disrupted the flow of business and crippled the financial apparatus we have come to rely on, but it uncovered the corruption and greed that permeated our financial institutions.

The irony is that unethical practices in the country's economy did not happen overnight, but evolved as a slow erosion over time.

It is during these critical times that our character is tested. Integrating ethical principles into our daily decision-making is the key to navigating the business climate with integrity. Ethics need to be woven into daily practices and procedures, requiring a constant commitment that cannot be swayed.

Some practical ways to integrate ethics into your work environment are:

Honor your promises and commitments. Set up a "What I said I'd do" section in your day planner or personal organizer. Record every commitment you make. Check the list daily as a reminder.

Talk it up. Keep ethics "in front of people." Periodically check your firm's pulse by asking, "How are we doing?" and soliciting ideas on what you can do more of, do less of and do differently to make ethics a way of life.

Celebrate integrity. Look for every way possible to make a big deal of performing with honor and integrity. Publicize positive behaviors and results.

Make it safe to be ethical. Make sure that employees face no negative consequences for doing what they feel is right, or for questioning others (including yourself).

Set the ethical example. Regardless of what's written or said elsewhere in the organization, your behavior is the performance standard employees will follow. Meet the responsibility. Seize the opportunity!

Accountants can appreciate that ethical skills require an exacting balance. Often our moral compass indicates that something's wrong when we steer away from our ethical code. Some decisions may appear to boost the bottom line, but will compromise our integrity if not thought about beforehand.

When faced with a dilemma, consider these questions to navigate an ethical response:

What feels wrong about this situation? Identify the underlying issues that need to be brought to the surface.

Is this situation against company policy or law? This is a viable indicator that will quickly resolve the issue.

How will our stakeholders be affected? Evaluating how our actions will affect others, including employees, investors, business partners and the public, brings clarity.

How will I be affected? This helps evaluate the personal impact of the decision.

Talking about ethics is one thing, but actually allowing them to drive your decisions and business practices speaks volumes. People may listen to what you say, but they remember what you do. For example, in my own business we will issue refunds to clients even though we completed our responsibility

Ethical choices are navigated by an internal compass, which is employed in simple and complex situations where values are at stake. Peter Wuffli wrote, "It is only individuals who can act responsibly. A company is as ethical as its people ... every single one of them."

Following an ethical compass is a personal responsibility that manages choices that will shape one's character. Every individual is a choice-making manager who continues to navigate their daily decisions through the ethical compass that guides them.

 

Phil Liberatore, CPA, is an accounting and financial advisor for individuals and small- to midsized businesses in Southern California, and the founder and manager of Philip L. Liberatore CPA and IRS Problem Solvers Inc.

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