Cultivating a Culture of Honesty

Integrity begins at the top, executives and experts agree.

Recent news paints American businesses as depositories of dishonesty.

-58 percent of office workers acknowledge taking company property for personal use, according to a survey for

-Two-thirds of companies provide little or no ethics training for employees, according to a global poll by the International Association of Business Communicators.

-A Hewlett-Packard search for the board member who violated securities rules by publicly disclosing private information has led to criminal fraud indictments against five company officials on charges of illegal investigative tactics.

No company is free of dishonesty, but executives do have tools for building an ethical and honest workplace, Orange County owners and business advisers agree. And companies owe it to their employees, customers and owners to do so.

“Businesses need to pay attention to this issue; it’s not minor,” said Alan Kopit, legal editor at, owned by legal publisher LexisNexis Martindale-Hubbell. “You’ll never eliminate (theft), but there are things you can do to make it less onerous.”


Top executives create the culture for their companies, said Lauraine Bifulco, president of HR Ltd., an Aliso Viejo human resources consultancy.

“It’s important for bosses to lead by example,” she said. “A boss who pads invoices shouldn’t be shocked if employees stuff their briefcases with office supplies.”

It’s best to set that example from the beginning because it’s so difficult to turn around a corporate culture that has tolerated dishonesty, added Michael Voris, president of Auto & Truck Glass LLC, based in Mission Viejo with 34 offices nationwide.

Voris was brought in as president two years ago, after the company sold to a group of investors. He found that the company, which does glass repair for car-rental agencies at airports, had been lax about employee theft of everything from glass to time.

In one case, the company transferred a truck to another state, and an employee re-registered the vehicle in his own name instead of the company’s.

Changing that culture doesn’t happen overnight, Voris said. “We’re going through the book ‘Values-based Leadership’ by Ken Majer. (Change) starts at the management level and filters down.”

Earlier this year, he evaluated the values of his managers. Now he is implementing better inventory controls to reduce theft of glass and other parts, putting Global Positioning System software on employee cell phones to track how and where they spend their time and initiating a no-tolerance policy toward employee theft.

“Part of the challenge is I have managers who want to hire back guys who we fired for stealing from us,” Voris said. “What makes them think it won’t happen again? It’s hard to get qualified technicians; that’s why managers want to rehire people we fired.”


Many companies wrongly assume employees know the rules, Kopit of said. “They need to make it very clear what will not be tolerated, putting it in employee manuals, posting signs, state it on the first day on the job, making it part of the hiring process.”

Some companies repeatedly remind employees of the honesty imperative.

“Farmers & Merchants Bank was founded on four key principles: honesty, integrity, church and family. We write that into our mission statement and give it to every employee,” said Daniel Walker, chairman of the 100-yearold Long Beach bank with 12 branches in Orange County. “Honesty is written into our strategic plan, our policies and employee manuals.

“Every year at the employee dinner, I stand up and remind them of the history of the bank and those four principles.”

Wayne Pinnell, managing partner at the Irvine certified public accounting firm Haskell & White, explains at orientations for new employees that ethical behavior is the firm’s top core value.

“Underlying this is: What is the honesty that is required by our profession. We work that into our training programs,” he said. “CPAs have to take separate ethics exams to get licensed, plus have a continuing education requirement of an eight-hour ethics class every six years.”

Continual reminders are good as long as the company is honest in communicating them, said trainer Steven Gaffney, author of the book “Honesty Works.” Managers and employees often are dishonest by withholding the truth rather than outright lying. They lie out of fear of confrontation or retaliation.

The employee handbook should include a section on ethics, said human resources consultant Bifulco. “Many companies make the mistake of assuming that people know what good ethics is. Give employees examples, (such as) accepting gifts from customers, antitrust, insider trading, bribes and kickbacks.”

The handbook should make clear that these examples are not the only ethical issues and that when in doubt the employee should ask senior management, she said. “The handbook should also explain that employees who violate the policy are subject not only to discipline but also civil and criminal actions.”

Many companies get into trouble and undermine their message of honesty when they don’t enforce their ethics policies consistently, Bifulco added. “I see all too often in all kinds of industries companies close their eyes to wrongdoing by a salesman who is bringing in a lot of money. Word gets out. Employees know.”


But companies wouldn’t have so many problems with dishonest salesmen and other employees if they paid as much attention to ethics as to technical skill during the hiring process, Bifulco said.

Some companies even use written honesty tests, although California companies must be careful that such tests don’t violate job applicants’ right to privacy, she said. “I recommend to clients that they stick to questions about workplace situations, not about cheating on a spouse or using drugs.”

Haskell & White tries to evaluate applicants’ honesty during the hiring process with questions such as tell me a time when you faced an ethical dilemma on the job and what did you do about it, Pinnell said. “We also run background checks and at higher-level positions run profile reports.”

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