Introduction In order to operate ethically in a global marketplace, corporations like Exxon Mobil need to define the conduct that they expect from their officers, executives, managers and employees. Without a defined code of conduct, employees feel forced to use their personal mores to determine what actions they should take in ethically ambiguous situations. Like children on a playground, employees need to know where the fences are so that they can work effectively. The Eight Principles
In order for the directors and executives in any company to know that their employees are acting in an ethical manner, they need a defined code of conduct that lays out the boundaries and freedoms for each employee. Creating this code requires a framework around which the tenants of the company can be developed and expanded to fill the ethical standards and expectations. The Global Business Standards Codex (GBSC) lists the eight underlying principles that provide a basis for evaluating and interpreting ethical behavior (Stanwick & Stanwick, 2009).
By using these principles, a company’s directors and executives can determine if they are considering all ethical aspects in their code of conduct. The fiduciary principle states that the officers, executives, and employees of a company have a fiduciary duty to act in the best interest of the company and for the company's benefit at all times.
The effective use of this principle prevents conflicts of interest by ensuring that employees will not place their own interests above the company's best interests. This principle also ensures the company's employees will do their best to fulfill their responsibilities and be financially responsible with company’s assets. Employees should also demonstrate a sense of loyalty to the company, perform their daily work with all due diligence, and report any ethical or legal violations to the appropriate manager (Stanwick & Stanwick, 2009).
The property principle simply states that employees should respect the company's property. This statement declares to the stakeholders that the company will not tolerate theft, misuse of equipment, misappropriation of funds or property, or the wasting of resources. Each employee, from the CEO to the CSR, must be a good steward of the firm's assets; they must not intentionally damage or steal any asset or allow a third party to do so (Stanwick & Stanwick, 2009). The basis of the reliability principle is that employees are responsible to honor and follow through on commitments made to the company.
This principle requires that employees will refuse to breach any contract and will not fail to perform a promised action. Each employee will work to fulfill all commitments made. The company also promises to pay all suppliers, contractors, suppliers in a timely manner (Stanwick & Stanwick, 2009). The transparency principle tells us that employees should perform their duties in an open and honest manner, not using their personal agendas to make lasting decisions. Companies are required to keep current and accurate financial records. These records must be presented in a truthful and accurate manner.
Relationships with business partners and suppliers must have their basis in honest interaction. Relationships with customers must also be open, with any safety or health-related issues presented with accuracy and honesty. Competitor information, especially propriety information, must not be sought, collected, or used in any way. Finally, the stakeholders must always be told the truth so that trust in the company can develop (Stanwick & Stanwick, 2009). Every employee needs to respect the dignity, health, safety, and privacy of all individuals. This standard is the basis of the dignity principle.
This principle encourages improvements in human development, both within the company and in society as a whole. Employees should help those who are working on personal development challenges, protect those people who are vulnerable, and ensure the safety of all employees. All officers, executives, managers, and employees should respect the privacy of all employees, customers, and other stakeholders. The dignity principle also explicitly forbids child labor and allows the employees to have the option to join a union for representation. Finally, this principle calls on all stakeholders to respect other cultures and beliefs (Stanwick & Stanwick, 2009).
The fairness principle requires that all stakeholders be treated fairly and it defines fairness in four ways. Reciprocal fairness speaks to treating other parties fairly and having them treat the company and its employees properly as well. Distributive fairness discusses the proper allocation of limited corporate resources to maximize their benefit for the company as a whole. Competitive fairness involves interaction with existing and potential competitors.
Competitive fairness must include fair treatment of your competitors and does not allow collusion, bribes, or other illegal relationships. Procedural fairness requires that the company and its employees treat all parties that interact with the firm properly and with due process, including any internal employees who notify authorities of any illegal actions taking place at the company (Stanwick & Stanwick, 2009).
The key aspect of the citizenship principle is that every employee should be a responsible citizen in the community. All officers, executives, managers and employees must respect all applicable laws, support the legitimate local government and officials that it works with, and work for the common good of the community. The company should also work with the environment in mind and should address any environmental issues it faces in a proper and ethical manner. The company should also encourage its employees to contribute to the general well-being of the community by volunteering through charitable organizations (Stanwick & Stanwick, 2009).
The responsiveness principle requires that the company respond to requests for information about operations from the stakeholders in a timely manner. These requests may include complaints about products or services, health and safety issues about products or services, or requests for information about those products or services. In general, the company should always strive to meet or exceed the expectations of the customers. Ideas from the stakeholders about how to improve operations should always be respected and evaluated objectively, and the executives and management should always respond to outstanding issues from employees, suppliers, community and other stakeholders in a timely manner (Stanwick & Stanwick, 2009).
Each of these principles is Biblically sound and ethically above reproach (Blocher, M. 2013). By following these eight principles and incorporating them into their codes of conduct, a business can function without being concerned that its employees might act in an unethical manner. If all companies followed these practices effectively in their everyday activities, unions would be unnecessary, customers would always receive excellent service, and communities would receive unequalled corporate support. Customers would always be happy, competitors would compete in fair-minded, evenhanded ways and employees would never feel the need to grumble about their employers. Exxon Mobil's Standards of Business Conduct
The Exxon Mobil Corporation is the world’s largest publicly traded oil and gas company. With operations on six continents and in more than 40 countries, Exxon is committed to “superior financial and operating results while simultaneously adhering to high ethical standards” (Our Guiding Principles, n.d.). Being present in so many countries and cultures requires that Exxon maintain the highest standards of ethical operations and conduct. Without defined standards, a corporation this large would not be able to operate effectively while it tried to negotiate the minefields of cultural issues that it sees on a daily basis.
Therefore, Exxon Mobil created and published it “Standards of Business Conduct.” This code of conduct attempts to answer any operational issue from an ethical standpoint so that all officers, executives, managers and employees will know what the company expects of them in their daily activities. Starting with their Guiding Principles, Exxon clearly focuses on being a company that operates ethically. Fiduciary statements, such as “we are committed to enhancing the long-term value of the investment dollars entrusted to us by our shareholders” (Tillerson, 2011, p.2), are included in the discussion points concerning the shareholders, the customers and the employees.
Transparency is evident in these guiding principles with statements concerning high ethical standards. The company shows responsiveness with statements concerning open communication and trust and these same statements include dedication to fairness for the customers and the employees. Citizenship and dignity are also represented in these guiding principles with statements about respecting the diversity of their employees and the local cultures and laws.
The Ethics Policy for Exxon represents the entire Global Business Standards Codex. Starting with citizenship, this policy requires that the corporation comply with all laws, rules, and regulations that apply to their business in the countries where they choose to do business (Tillerson, 2011). Exxon then makes a clear statement to show that simple legal compliance is not enough. “The Corporation’s Ethics policy does not stop there. Even where the law is permissive, the Corporation chooses the course of highest integrity” (p.3, emphasis added).
With affirmations of the local cultures and mores, Exxon demonstrates dignity, but, in the same statement, declares, “Honesty is not subject to criticism in any culture” (p.3). Exxon sees the value of a transparent, fair and honest reputation. The Ethics Policy continues to stress fairness, transparency and reliability by requiring high standards of integrity, stating multiple times that unscrupulous dealing will not be tolerated. All transactions are expected to be accurately entered and reflected in the records, and proposals and transactions are expected to be evaluated honestly to make sure the corporate resources are being used properly, in recognition of the property principle (Tillerson, 2011).
Throughout the Ethics Policy, Exxon call upon its employees to act in the best fiduciary interest of the company. This commitment is clear in the statement “The Corporation cares how results are obtained, not just that they are obtained” (Tillerson, 2011, p.3, emphasis added). The Ethics Policy closes by declaring that they will make all disclosures and public communications in a full, timely, accurate manner. This dedication to the responsiveness principle rounds out the Ethics Policy with the last GBSC principle. Exxon Mobil has certainly committed itself to ethical business operations standards (Tillerson, 2011).
In the Conflicts of Interest Policy, Exxon requires that all officers, directors and employees “avoid any actual or apparent conflict between their own personal interests and the interests of the Corporation” (Tillerson, 2011, p.4). The policy goes on to define possible conflicts of interest and even gives examples. This instruction is a clear representation of the fiduciary principle,and Exxon is clearly concerned with this issue. Employees are expected to protect the property of the company, as stated in the Corporate Assets Policy.
This property does not include only the physical assets, but also the information that is used in the daily activities of the employees. This policy clearly represents the GBSC’s property principle (Tillerson, 2011). The Directorships Policy focuses on both the fiduciary and citizenship principles with an interesting combination of thoughts. This policy clearly states that officers and employees cannot accept a position of directorship with another for-profit organization that may involve a conflict of interest. It also allows officers and employees to serve in a directorship role for non-profit organizations, provided a conflict of interest does not exist (Tillerson, 2011).
This policy covers both principles in an interesting way and encourages involvement in the community. The Gifts and Entertainment Policy and the Anti-Corruption Policy both focus on the transparency and fiduciary principles (Tillerson, 2011). Both policies require that employees act in the best interest of the corporation with good, ethical judgment. The Gifts and Entertainment Policy also includes a statement of fairness when it states, “gifts and entertainment must not be intended to create an improper advantage for the Corporation” (Tillerson, 2011, p.7). Clearly, a company the size of Exxon Mobil could easily use its vast resources to create an advantage for its global operations.
The fact that they explicitly state that this behavior is improper and unacceptable is quite impressive. Political Activities and International Operations are both policies that focus heavily on the citizenship principle. The Political Activities Policy discusses involvement by individuals in the political processes of their local, state and national governments, including encouraging employees to vote, contribute, stay informed, serve in civic bodies and join in campaigns for the candidates of their choosing. The policy carefully states, however, that Exxon Mobil does not participate or contribute as a company (Tillerson, 2011). The Antitrust Policy is a clear statement of fairness. It requires compliance with the antitrust and competition laws of the nations where Exxon does business (Tillerson, 2011).
The Health, Safety and Product Safety Policies are an impressive compilation of statements focused on the safety and wellness of their customers and employees. Exxon Mobil has a clear focus on being responsive to the needs of their employees and their customers in the event of an accident or crisis (Tillerson, 2011). In the same way, the Environmental Policy focuses on being responsive to the needs of the environment, but this policy actually has a fiduciary aspect to it. Exxon Mobil will only invest and develop technology that is “based on sound science and considering the risks, costs, and benefits, including effects on energy and product supply” (p.13).
The Alcohol and Drug Use Policy and the Harassment in the Workplace Policy are both very focused on the dignity of the employees of Exxon Mobil. Both of these policies are perfect examples of a company that is dedicated to its employees' well-being (Tillerson, 2011). By actually publishing their own Equal Employment Opportunity Policy, Exxon Mobil is doing more than just accepting the government’s minimum requirements for equal employment.
This policy shows a commitment to fairness, transparency and employee dignity (Tillerson, 2011). Finally, the Open Door Policy is a clear commitment by Exxon to be transparent and responsive to their employees. This type of policy can be difficult to maintain but is effective in letting employees know that their opinions and concerns matter and they are being heard (Tillerson, 2011). Conclusion
Exxon Mobil, being a very successful multinational corporation, has made their codes of conduct a very integral part of their corporate culture. Their Standards of Business Conduct encompasses all eight principles of the Global Business Standards Codex: fiduciary, property, reliability, transparency, dignity, fairness, citizenship and responsiveness (Stanwick & Stanwick, 2009). Their policies are all encompassing, addressing each principle multiple times and in multiple ways. As a corporation, Exxon Mobil is a fine example of a company that considers the need for ethical conduct to be a key operational factor in its success.
References Blocher, M. B. (2013, March 22). BUS-503 Reading, Day 5. Retrieved April 1, 2013, from https://moodle.cornerstone.edu/mod/page/view.php?id=43032 Our Guiding Principles (n.d.). In ExxonMobil. Retrieved May 4, 2013, from http://www.exxonmobil.com/Corporate/about_who_sbc.aspx Stanwick, P. A., and Stanwick, S. D. (2009). Understanding Business Ethics (Vols. 1 - 1, pp. 8-12). Upper Saddle River, NJ: Pearson Education, Inc. Tillerson, R. W. (2011, November). Standards of Business Conduct. In ExxonMobil. Retrieved May 1, 2013, from http://www.exxonmobil.com/Corporate/Files/Corporate/sbc.pdf