Core values are principles or standards of behavior that represent an organization’s highest priorities, deeply held beliefs, and fundamental driving forces. They’re at the heart of what organizations and employees stand for from an ethical perspective. Core values are intrinsic to the organizational vision that defines what businesses believe and present to the external world—as well as how they’re perceived—and are fundamental to attracting and retaining the best, most capable employees who contribute the most to organizations. They should be integrated with management’s and employees’ belief systems and actions so that clients, customers, and vendors see those organizational values in action, with ethics put into practice, not just talked about.
Core values are guiding principles that form a solid foundation of what organizations are, what they believe, and what they want to be going forward. Together, the core values of leaders and employees in the workplace, along with their experiences, upbringing, and training, meld together to form corporate culture. Organizational culture exemplifies the end result of leadership’s efforts to cultivate an ethical mission, employee activities and interactions, and stakeholder behaviors and beliefs. Decentralized organizations especially need to reexamine their core values due to the remoteness of employees and stakeholders.
Management accountants should ask themselves these questions:
- Does your company serve its stakeholders (i.e., customers, vendors, and surrounding communities)?
- Do your employees “live and exemplify” company values every day?
- Are your employees able to recite your company’s mission statement, and do they aspire to live up to its values?
- When was the last time you conducted a culture survey of your organization’s personnel?
- Do customers and vendors know your company’s mission statement and code of conduct?
A fresh examination of your organizational values should help you to take the pulse of your company’s culture and ethics.
In The Culture Engine, S. Chris Edmonds writes that culture trumps everything else. An organization’s mission statement is the expression of the purpose and values that form its corporate philosophy. Employees who embrace an organization’s values tend to remain with it; those who don’t usually leave. Observe how employees treat one another—is it with respect, disdain, or somewhere in between? Are blaming and finger-pointing seen in their daily behaviors? Civility and accountability should be the norm. Such observations represent criteria that management should use to find candidates who are a cultural fit when they’re interviewing.
Leaders are in charge of culture and shouldn’t treat their cultural responsibilities casually; they’re on duty 24/7. They should create a code of conduct and mission statement that include core values and ethics readily available to employees. They should clarify the organization’s purpose in that mission or purpose statement, articulating the organization’s values and reason for being—the statement of “what we do” will hopefully become second nature for all employees.
According to a survey conducted by Edmonds, 84% of organizations said they have published a mission statement, but 62% of those companies said only half of their employees could recite it. Leadership should dig deeper to look for what inspires employees and educate them about the company’s core values.
Workplace inspiration typically doesn’t happen effortlessly but rather intentionally. Ethical behaviors based on core values become the metrics for evaluating good corporate citizenship and workplace inspiration. Once values are published publicly, leaders must live by them and coach employees to embody them. Leaders have the responsibility to be proactive champions of organizational culture and ethics.
Values defined in behavioral terms are the most important element of an organization’s constitution—33% of respondents to the Edmonds survey agreed that their team had defined “what a good citizen looks, acts, and sounds like.” Companies announce values but often don’t hold personnel accountable for demonstrating ethical values each day. Conduct culture assessments every six months to determine whether leaders and employees are good corporate citizens.
Leaders need to formalize three to five simple, easy-to-remember values with specific definitions and desired behaviors that they should demonstrate, coach, and nurture. Management accounting and finance professionals should model and perform ethical behaviors rooted in core values on a daily basis. High-performing values-aligned teams embrace the promises they make to all stakeholders.
GUIDED BY ETHICS
Ethical culture is a positive force in organizations. Especially with employees working remotely, values need to be applied throughout every organization. The Institute of Internal Auditors unveiled a practice guide in November 2019 titled Auditing Culture, an assessment that checks whether core values permeate the entire organization.
The National Association of Corporate Directors (NACD) Blue Ribbon Commission on Culture as a Corporate Asset recommended that boards of directors make culture an explicit criterion in the selection and evaluation of CEOs. The tone at the top establishing an organization’s culture resonates in ways that are intangible and off the balance sheet. Far too many organizations fail to quantify or evaluate their culture and ethics.
There are profound lessons relating to core values for management accountants. Gauge whether your company’s leaders and employees truly live according to company values. Values reflect a company’s priorities for how personnel spend time and conduct themselves. By reexamining your values, you’ll gain tremendous focus and appreciation for the guidance that your organizational values provide. This will enable your organization’s leaders and employees to make consistent ethical decisions and take values-based actions.
IMA ETHICS HELPLINE
For clarification of how the IMA Statement of Ethical Professional Practice applies to your ethical dilemma, contact the IMA Ethics Helpline.
In the U.S. or Canada, dial (800) 245-1383. In other countries, dial the AT&T USA Direct Access Number from www.usa.att.com/traveler/index.jsp, then the above number.
The IMA Helpline is designed to provide clarification of provisions in the IMA Statement of Ethical Professional Practice, which contains suggestions on how to resolve ethical conflicts. The helpline cannot be considered a hotline to report specific suspected ethical violations.