Ethics training spotlighted by tough new federal rules

Suddenly, business people are beginning to pay attention when Cliff McCorkle talks about the importance of formal programs to develop business ethics.

After eight often-frustrating years in which McCorkle sought to translate Truckee Meadows business owners' good intentions into action, top managers and owners now face substantial penalties under federal law if they don't undertake ongoing programs in ethics.

And they're paying attention.

"I'm finding a real strong interest among business people, only because they can see instantly their personal exposure," McCorkle said last week.

Federal regulations that took effect Nov.

1, an offshoot of the Sarbanes-Oxley requirements on publicly held companies, substantially raise the requirement for ethical practices at privately held companies and nonprofits.

The regulation essentially requires, McCorkle said, that every organization with more than one person start an ethics program.

And,McCorkle said, it's not just accounting ethics that are in the spotlight.

Everything from sexual harassment to drugs in the workplace potentially could leave an organization exposed to the regulations' requirements.

The new regulations require, too, that whistleblowers be provided a safe way to express their concerns without fear of reprisal.

Organizations can reduce their exposure, however, through an ongoing program to educate employees and managers about ethical practices.

"It's not enough to have it in your employment policy manual,"McCorkle said."There has to be a deliberate and ongoing effort."

Here's how a deliberate and ongoing effort might look: The Ethical Practices Institute, a Sacramento-area nonprofit, developed an ethical practices program that's taught by employees in the company itself.

Twice a month, the trainers take 10 minutes at the end of a staff meeting or, in some industries, a safety meeting to present an ethical principal, discuss its application in the real world and assign participants homework to practice during the next couple of weeks.

In addition, the institute contracts for whistleblower hot lines with CLC Inc., a company in Granite Bay, Calif., that's developed a speciality in that service.

Price of the program: It starts at $79 a month for companies up to 25 employees and goes up to $750 a month for companies with as many as 5,000 employees.

The Ethical Practices Institute says some of the costs might be offset by lower liability insurance rates.

If nothing else, the organization says that an ethics program will improve a company's work environment and bottom line.

For McCorkle,who was dismayed by the nation's ethics when he returned in 1995 from a stint in Eastern Europe, the fact that businesses are paying close attention to ethics only because of a legal threat is both heartening and dismaying.

It would be better if business owners acted on their own to bring their good intentions to reality, he said, but any attention to ethics no matter what the reason is a good thing.