Construction Informer

Last August I reported here on an effort underway by some of the major construction firms to establish best practices for ensuring, and promoting, ethical behavior in the construction industry. Called the Construction Industry Ethics and Compliance Initiative (CIECI) it has 13 founding member companies and 13 principal member companies.

Firms in any of the AEC disciplines can join the effort for $1,000 plus an annual fee based upon revenues. The more revenues, the higher the annual fee. There is a list of requirements that members must adhere to, and these are all rather loose, and open for interpretation. For example, member companies must:

Have and adhere to a written Code of business conduct. The Code shall establish high ethical values and compliance with the law applicable to the U.S. construction industry.

CIECI meets at least once a year, and its second Best Practices Forum is coming up October 8 and 9. The first Best Practices Forum was held at about the same time last year and there was supposed to be a First Annual Progress Report issued in early 2009, but I wasn’t able to find that at CIECI’s web site.

This effort, which is non-profit and claims absolutely no lobbying agenda, and does not seek to regulate the behaviors of its members, is still timely in relation to the federal government’s 2008 increased interest in the ethics of the contractors working on federal projects. As of December 2008 contractors doing business with the federal government had to comply with FAR – Federal Acquisition Regulation – Contractor Business Ethics Compliance Program and Disclosure Requirements. A noteworthy disclaimer here though is that not all federal government contracts are affected by this requirement. Even so, it’s probably not a bad idea to have some kind of effort at your company to shed light on, and keep people mindful of ethical considerations.

Construction is rife with opportunities to take advantage of someone, or to turn a blind eye while someone else does. But there are also situations where personal interests can lead to ethical questioning and this is where we begin to see how ethics can bleed over into issues of personal choice.

The Federal Highway Administration has published on its Web site a model of an ethics code. One of the potential ethical departures listed there includes times when an employee of a company has a second job, or is involved with civic, charitable or professional organizations and their involvement with those “interferes with their job responsibilities.” The section goes on to suggest this wording in company ethics policies:

Prior to engaging in any outside employment activity or participating in any civic, charitable, or professional organization or activity that may give rise to an actual or potential conflict of interest, the employee must consult with the Corporate Compliance Officer and obtain express written approval.

Now, I don’t know about you but I’m wondering what might “give rise to an actual, or potential conflict of interest.” Could it mean that someone can’t attend a meeting of like-minded people who are opposed to abortion because the company happens to be building a clinic that will, among other things, offer abortions? Is it possible that an employee who is politically motivated by socialism would be triggering a conflict by attending a rally for a socialist political candidate?

Other suggested wording for an ethics code has to do with personal financial interests that may conflict with company interests.

Employees should avoid personal financial interests that might be in conflict with the interests of the Company. Such interests may include… directly or indirectly having a personal financial interest in any business transaction that may be adverse to the Company; acquiring real estate or other property that the employee knows, or reasonably should know, that is of interest to the Company. Such personal financial interests include those interests of not only the individual employee, but also those of the employee’s spouse, children, parents, grandparents, siblings and family in-law.

So if someone buys stock in a construction firm other than the one they work for, is that an example of, “having a personal financial interest in any business transaction that may be adverse to the Company?”

There are all kinds of ethical views in the world, and it might come as a surprise to some, but ethics are not really black and white. Whatever ethics one has are the products of their life experiences, training, early life indoctrination, and a host of other factors. For example, I have known people who when given the incorrect amount of change, in their favor at the checkout, think nothing of pocketing the windfall with the justification that it was the clerk’s mistake and if they had been paying more attention they wouldn’t have made it. While others will alert the clerk that a mistake has been made and get the correct amount of change. Who is ethically correct in this instance? There are potentially many instances where people can innocently do things, or say things that could be construed as unethical. But that doesn’t mean we should use statements in a code of ethics that make it possible to label any kind of behavior as unethical, especially behaviors that conflict with company interests. Isn’t that somewhat unethical?

One of the core considerations here is whether everyone who works for a particular company has to hold the same values, (or at least fein them), in order to work there. There are also two larger questions that companies and individuals should consider:

• How extensive a list of ethical requirements are companies willing to accept in order to do business with governments and others who require them;
• How much of their personal freedoms are employees willing to part with in order to keep their jobs.

Of course the specific discussion about codes of ethics themselves has to do with properly labeling what it is we are trying to do. Being open, or transparent, about our intentions should perhaps be the first step in establishing a code of ethics. If having a code of ethics is really about satisfying government requirements and putting up a good front for customers, then why not say so and include specific prohibitions, not general statements that can be invoked in any situation that feels threatening to the company. We should spell out that people can’t accept kickbacks, (and explain what they are), and they can’t participate in bid rigging or bid staging, etc.

Perhaps the discussion about ethics, and the establishment of codes of ethics, would benefit from looking beyond what is necessary in order to advance business, and focus instead on ethics that advance human collaboration and interaction, within an environment of trust.