“The culture of any organization is shaped by the worst behavior the leader is willing to tolerate.” In this quote from their 2015 book “School Culture Rewired,” educators Steve Gruenert and Todd Whitaker captured the challenge of maintaining high ethics in any business organization.

The Gruenert/Whitaker principle most certainly applies to construction companies. Simply put, the ethical reputation of a construction company, while it is a reflection of actions carried out at all levels of the organization, starts at the top. When it comes to ethical behavior, company leadership must set the example.

Ethical challenges in the construction industry are multi-faceted, ranging from the need for fair and open estimating and bidding before the job starts to quality work performance in the field without taking shortcuts. Rework is costly, in labor and materials. Doing the job right the first time, in fact, is probably the top ethical priority for any construction company.

Step One: Develop an ethics blueprint.

The first step toward building ethical behavior in a construction company, as with any construction project, is development of a blueprint. An ethics blueprint should incorporate three key elements that inform and guide employees’ actions:

• Corporate core values;
• Mission statement; and
• Vision statement.

Step Two: Develop a corporate code of ethics that reflects what is important to the organization.

Make sure the corporate code of ethics aligns with the mission and vision. For example, the company’s code of ethics should focus on a wide range of ethical challenges, including antitrust laws, bribery and kickback prohibitions, conflict of interest responsibilities, solicitation prohibitions, environmental compliance, falsification prohibitions, confidentiality agreements and security procedures. By institutionalizing these codes, the company can ensure that all employees are operating by industry standards of practice, which promote full and open competition with other businesses.

Step Three: Provide regularly scheduled ethical training to employees.

The importance of ethics training cannot be overemphasized. At Shapiro & Duncan, employees receive their first round of in-person ethics training on the first day at the new hire orientation. At the employee’s 60-day mark, the code of ethics is again reviewed. It is also gone over annually at the company-wide meeting and in quarterly meetings with individual managers. The more the critical importance of ethical behavior is put in front of people, the more it becomes a habit.

Step Four: Encourage managers to develop and maintain personal relationships with team members.

If managers get to know their people and interact with them daily, their employees are more likely to be productive and work ethically.

Step Five: Engage with a third-party organization that allows employees to make anonymous and confidential ethics reports.

Engaging with an organization that specializes in advocating ethical culture and behavior in the workplace provides great benefits to construction companies. Many of these specialized organizations implement an anonymous and confidential incident reporting system through their fully secure, encrypted website reporting pages. This allows for employees to anonymously step forward if they feel the need to do so.

By encouraging employees to talk with their supervisors on a regular basis and building those personal relationships, companies can succeed in creating an environment in which employees are willing to come forward and share ethical concerns without using this process. However, at the same time, it’s good for employees to know that there is a confidential third-party reporting mechanism in place if they feel they need to use it.

Bottom Line on Ethics

An ethical approach in construction benefits the bottom line in two ways. Internally, when employees are treated fairly and honestly, they tend to work harder, smarter and more efficiently. This increased productivity has a direct impact on corporate revenues and profits.

Externally, an ethical reputation in the industry also has a favorable impact on the bottom line. This is because partners, suppliers and even competitors (who could be future teaming partners) are more inclined to want to do business with an open and upfront company.

Key Takeaway

Ethics in business comes down to accountability. Leaders of a company must make sure that they are leading by example. This means adhering not only to the ethical blueprint provided by the company’s core values and its vision and mission statements, but also following the company’s code of ethics and any reporting protocols to the letter. This commitment must be unwavering and extend to all parties involved in each project.