Codes of Conduct and Workplace Ethics:
Your Anchor for a Successful Transition into the Private Sector By Paul Falcone The U.S. military is world renowned for its code of conduct, ethics, morals, and behavior befitting the elite troops that serve our nation. But did you know that the private sector has a similar code? “SOX,” more formally known as the Sarbanes-Oxley Act of 2002, came about after the stock market meltdown known as the “Tech Bust” where the Nasdaq exchange lost more than 75% of its value. The new law unleashed a panoply of corporate obligations and responsibilities to protect investors, which also impacted the day-to-day conduct of employees of publicly traded companies. When it comes to SOX, the first thing that comes to mind is financial and operational controls and disclosure requirements. And while financial measures and reforms in corporate governance standards make up a majority of SOX initiatives, documented codes of ethics are also a mainstay of the Act. To comply with SOX, publicly traded companies must publish a code of conduct, often times referred to as a business ethics statement that, in turn, must be proactively communicated to all employees. Private companies were not required under the act to publish a code of business conduct, but most caught onto the idea and were quick to adopt business conduct statements of their own. So, what’s in a typical organization’s code of conduct, and how does it impact you when the time comes for your transition to the private sector?
“SOX”
Obligation #1: Disclose Potential Conflicts of Interest A conflict of interest exists when your outside business or personal interests adversely affect or have the appearance of adversely affecting your judgment at work. Therefore, it’s critical that you disclose in writing anything that could place your company at risk, such as having an undisclosed family relationship with coworkers, customers, suppliers, or competitors of the company. Other examples of potential conflicts include accepting a personal benefit that obligates you in any way to a customer, vendor, or competitor; accepting or offering cash under any circumstances; taking a business opportunity away from your company by doing personal business with a customer, supplier, or competitor (except as a regular consumer); and having a financial interest in a customer, supplier, or competitor, other than less than 1% ownership of a publicly traded company. When potential conflicts come up, you have an affirmative obligation to disclose it to management. Full disclosure permits the organization to address the conflict and adjust accordingly. Failure to disclose, however, can result in serious discipline or even outright termination. To be on the safe side, even if you’re not given a formal disclosure form to fill out, email the issue to your supervisor so that you have an electronic record of the disclosure to protect yourself.
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WWW.HomelandMagazine.com / NOVEMBER 2020