Managers hold positions of authority that make them accountable for the ethical conduct of those who report to them. They fulfill this responsibility by making sure employees are aware of the organization's ethical code and have the opportunity to ask questions to clarify their understanding. Managers also monitor the behavior of employees in accordance with the organization's expectations of appropriate behavior. They have a duty to respond quickly and appropriately to minimize the impact of suspected ethical violations. Lastly, managers make themselves available as a resource to counsel and assist employees who face ethical dilemmas or who suspect an ethical breach.
Of course, managers are responsible for upholding ethical standards in their own actions and decisions. In addition to following the organization's ethical code, managers may be obligated to follow a separate professional code of ethics, depending on their role, responsibilities, and training. Fiduciary duty is an example that applies to some managerial roles. A fiduciary must put the interests of those to whom he is accountable ahead of any interests, and must not profit from his position as a fiduciary unless the principal consents.
Many managers have responsibility for interacting with external stakeholders such as customers, suppliers, government officials, or community representatives. In those encounters, managers may be called on to explain a decision or a planned action in terms of ethical considerations. The stakeholders will be interested to hear how the organization took ethics into account, and in those cases it is the manager's duty to speak on the company's behalf.
Additionally, managers may be responsible for creating and/or implementing changes to an organization's ethical codes or guidelines. These changes may be in response to an internal determination based on the experience of employees; for instance, additional clarification may be needed about what constitutes nepotism or unfair bias in hiring. Alternatively, new regulations, altered public perceptions and concerns, or other external factors may require the organization to make adjustments.
The manager's role in ethical conduct
The manager has an important role in maintaining ethical conduct in a firm, but a firm's ethics cannot simply be based on a "manager to the rescue" approach.