Knowing When to Accept the Fam Trip and Other Ethical Issues

Victoria Frank, the owner of Carlson Frank LLC in Northfield, IL since 1997, has seen more than her share of questionable ethical practices during her previous 12 plus years spent as a meeting planner. Frank has worked for three different firms — a commercial real estate company, a destination management company (DMC) and a small, commercial travel agency.  Both the DMC and her company used vendors that paid the highest, regardless of cost to the client. Elaborate gifts were offered by vendors to influence decisions; the agents would take familiarization trips to locations that they were unlikely to use; and planners stole clients as they moved to competing firms.

Mistakes Not Repeated

Frank said she has been careful sure not to replicate these ethical missteps with her own meeting services firm. As her Web site states: “Our budgets are detailed, open book and include our professional fee, typically a percentage of the total. We never accept mark-ups from our suppliers and pass on all hotel commissions to our clients… Every dollar spent is accounted for — fiscally as well as from the results the investment will reap.” 

And she lives by her philosophy. When an incentive client, upon booking a third program, asked Frank to factor in a “cash incentive for him — naturally paid by his employer” as part of the budget, she refused, and subsequently lost the account.

“I feel our industry is rife with questionable business practices,” said Frank.  “Because this recession was caused by questionable business practices on Wall Street, and this recession has hit our industry so hard, it seems to me to be the perfect time to make some changes.”

Ethics: Good Business Practice

Good ethical practices are not only a moral issue but make good business sense as well, according to a research brief supplemental to the Ethics Resource Center’s 2009 National Business Ethics Survey: Increasing Trust and Driving Down Risks.  The Ethics Resource Center, founded in 1922, is America’s oldest nonprofit organization devoted to the advancement of high ethical standards and practices in public and private institutions.

According to the report, “In stronger ethical cultures, employees feel en­gaged and committed to the company, and the company is protected from the risks associated with misconduct and lurking ethics issues. Efforts to promote ethics and develop a strong ethical culture are not only the right thing to do—they make business sense because in stronger ethical cultures.

Among the benefits:  Fewer employees feel pressure to compromise company standards; more employees observe misconduct and there are fewer incidences of every kind of misconduct; employees who observe misconduct are more likely to report it; and those who report issues are less likely to experience retaliation.

Two Sides to Every Issue

Still, many situations can be seen in two ways and aren’t as clear-cut as “Don’t cheat the client” or “Don’t steal the accounts when you leave.”

In a recent seminar entitled, “Black, White and Shades of Gray: Ethics in Meeting Planning” facilitated by industry consultant Joan Eisenstodt, several scenarios were brought up that could be interpreted in two ways.  For example, stealing small amounts of copier paper and paperclips didn’t seem like a huge offense by most participants, especially when compared to walking out with the office copier, and many argued that they often bring work home (unpaid time) and use their own supplies for their company’s benefit.  However, Eisenstodt quoted attorney Kelly Bagnall who estimates that pilfered office supplies costs U.S firms upwards of $50 billion each year. 

Another issue: when an employee travels out of town to attend a trade show and wins a booth prize, to whom does the prize belong? Does it go to the employee who took time away from home and endured the rigors of travel to attend the trade show, or to the company who footed the bill?

Put It in Writing

The answer, said Eisenstodt, is having a written code of content so that employees know exactly what is expected of them. “Knowing what is expected is helpful no matter what kind of policy or procedure a company has.  For example: Are regular work hours 9 – 5 or is there flexibility? Are co-workers allowed to date each other? Is there any prohibition on married or partnered co-workers being employed here? May I accept gifts from vendors and if so, at what value? 

“For a company’s reputation and to guide employees, knowing what is acceptable behavior and what is not and being specific about it helps everyone proceed accordingly,” she continued. However, a code of conduct is not an end-all solution, she warned. “If the examples of Enron, MCI, and other companies are viewed, however, even having an ethics policy doesn’t guarantee compliance.  Ethics policies should be living, breathing documents. Companies should ensure methods by which questions may be asked without an employee feeling uncomfortable in so doing.”

Aside from personal use of office supplies and ownership of prizes won on company time and on the company dime, Eisenstodt listed a number of issues that should be tackled by a comprehensive code of conduct. They include:

•         Acceptance of gifts from vendors

•         Acceptance of fam trips

•         Requirements of conduct when witnessing ethical missteps of fellow employees

•         Corporate social responsibility guidelines including environmental issues

•         Protection of data and other information 

•         Alcohol consumption on company time or when representing the company  at a professional event

•         Diversity issues

•         Conflicts of interest

•         Disclosure of information 

Avoiding the Pitfalls

Eisenstodt had some tips for agencies or planners developing a code of conduct, including determining if the code is aspirational, as is often the case for members of an association or profession, or if it is binding. She also suggested that organizations work with an ethics professional or research from an organization like the Ethics Resource Center www.ethics.org to develop the guidelines and as well as consulting with an attorney who specializes in ethics, especially if there are professional designations involved (such as CMP, CMM, CAE, etc.) to determine what additional procedures need be in place.

Additionally, she noted that it is important for an organization to determine how the standards/code will be disseminated and used and how ethics complaints/infractions will be processed. FAQs should also be created to clarify specific issues that may not be covered in the code. For example, the code may say that employees may only accept gifts valued at $25.00.  The FAQ may clarify that this means $25, one time each year, she noted.