Not long ago, consultant Frank Navran worked with a company that hung key words of its ethics code on banners inside its lobby. It was an impressive sight. So he asked one employee about the company's values.
"The what?" came the reply.
"What do the company's values stand for?" he asked again.
"Oh, you mean the banners. That's just for show," the employee assured him.
It's often hard these days to separate the trappings from the truth of corporate behavior. But in a period of expanding business scandal, that knack has become suddenly important especially for the job seeker. Is there a way to avoid getting hired by the next Enron?
In most cases, yes, ethics experts say. Job applicants today not only can run prospective employers through an ethics audit, they should.
"You really have an obligation to do that," says Mr. Navran, principal consultant of the Ethics Resource Center, a nonprofit education and research organization in Washington, D.C. The last thing new employees should do is invest years in firms they don't believe in, he adds.
"With the Internet, there's just no excuse for not doing your homework," adds Vivian Weil, director of the Center for the Study of Ethics in the Professions at the Illinois Institute of Technology in Chicago. "The main point is to be on the alert to realize you're interviewing the company as well as they're interviewing you."
Like any research project, an ethics audit begins with data. The wannabe employee should dig into at least three areas, ethics experts agree: a company's social responsibility record, its financial practices, and, especially, its culture. The place to start is online.
Any Web search engine will quickly reveal ethics challenges facing a major company. Activist groups are eager to highlight the best and worst corporate actors in their particular arena. Of course, people campaigning against cruelty to animals may have lots to say about a cosmetics concern but not even mention the firm you're interested in. So check with major social-responsibility investing groups for a broader look.
And don't forget the business press. Does the company show up on Fortune or Working Mother magazine's list of 100 best companies to work for? Did Business Ethics Magazine include it in its list of the "100 Best Corporate Citizens?"
Even if a potential employer doesn't make such lists, it's often not enough to write the company off.
"You have to realize that everyone has their point of view," says Mike Lawrence, executive vice president of Cone Inc., a Boston-based firm involved in cause-branding issues. "So a good company may end up on a bad list. A bad company may end up on a good list."
In fact, the most telling point may not be the company's particular ethical difficulty. "I don't think employees should look for companies that are completely unblemished that's harder and harder to find," says David Eichberg, senior manager with Business for Social Responsibility, a business membership organization based in San Francisco. "If that company is called out on a particular issue, they should be looking at how the company is addressing that issue."
In several instances, ethics experts say, public disasters have forced companies to make far-reaching reforms.
At some point, however, it's time to quit reading and talk to people. And one of the fruitful encounters you can have is the face-to-face interview.
"An interview is a mutual process," says Mr. Navran of the Ethics Resource Center. So don't feel intimidated in asking lots of questions, such as: "What does this firm believe in? How does this firm's mission serve society? What are the priorities?"
"What you're trying to get at is the ethical attitudes of the people at the top," explains Rushworth Kidder, president of the Institute for Global Ethics, a nonprofit organization promoting ethics, based in Camden, Maine. "You can learn a lot by going into a company and asking 'Do you have a code of ethics?' and watching carefully the response and body language that you get."
Although most major corporations have a code of ethics, the importance of such codes varies wildly. If the interviewer hesitates, goes rummaging around to try to find a copy of the code, that's a good indication that the company doesn't place the code at the core of its culture, Mr. Kidder says. On the other hand, if the interviewer pulls out a dog-eared copy close at hand, that's probably a good sign, he adds.
In a 2000 survey, the Ethics Resource Center found that 92 percent of employees of large corporations felt loyalty to their company if it had a complete ethics program in place. That's substantially higher than the 73 percent who felt the same way towards companies that had only a set of ethics standards.
While employees should feel free to ask lots of questions, they should do so tactfully, warns Keith Greene, director of organizational programs at the Society for Human Resource Management, which represents human resources professionals.
"Are you ethical?" won't elicit a useful response, he says. But an employee who begins by saying something along the lines of "I'm really concerned that the organization I work for fits with my ethical perceptions" can introduce a string of key questions. What is the composition of the board of directors? How are these individuals selected?
"As a prospective employer, if I'm asked that question, I'm going to say to myself: 'Here's an individual who wants to make a truly educated decision," says Mr. Greene of the Alexandria, Va., organization.
Don't just rely on the interview. Try to pick up the feel of the place. What are the employees talking about in the cafeteria? How organized or informal does the workplace look? "You want to nose around," says Peter D. Kinder, president of KLD Research & Analytics, the Boston consulting firm that created the social-responsibility Domini index. "If there's a convenience store next door, ask the convenience store owner what he thinks of the people who work at the company."
Get candid assessments from current workers by hanging around the parking lot at closing time, Greene suggests. And don't overlook Internet news groups, where you can troll for current and former employees.
These steps will go a long way toward avoiding working for a company that will embarrass you or lay you off because of scandal down the road. But they can't eliminate all the risk. Companies such as Enron fooled even social responsibility investment experts.
"If you're talking about something like an Enron situation or a WorldCom situation, there's really very little a potential employee can do" to spot trouble, says John Warren, associate general counsel of the Association of Certified Fraud Examiners, a professional membership organization based in Austin, Texas. But "from talking to people in the industry, you can get a sense of the corporate culture."
And that might be enough to send up a red flag. In the end, "you have to go with your gut," says Mr. Kinder of KLD, "and never go against your gut."
Before a face-to-face interview with a prospective employer, use the Internet to conduct an ethics audit of the company. Any good search engine will find big controversies the company has stumbled into. Then use these sites to dig deeper:
Business Ethics Magazine (www.business-ethics.com) lists the 100 Best Corporate Citizens for 2002.
Business for Social Responsibility (www.bsr.org/Meta/MemberList.cfm) lists many of its members. If your prospective employer is on the list, it means the company is at least interested in exploring ethical issues.
Calvert Group (www.calvert.com) posts a social index, which profiles companies that have passed its criteria and produce safe, beneficial products with integrity and attention to employees and the environment.
Center for the Study of Ethics in the Professions (www.iit.edu/departments/csep) contains hundreds of codes of ethics online. Click on "Codes of Ethics Online" to see if your company is listed.
Domini 400 Social Index (www.domini.com/dsi400) lists companies that uphold certain social-responsibility standards, including commitment to the environment, employee diversity, charity, and human rights. Of course, no list is perfect. The venerable Domini 400 included Enron at one point.
Fortune magazine (www.fortune.com/lists/bestcompanies) ranks every year the 100 best companies to work for.
Working Mother magazine (www.workingwoman.com) ranks the best 100 companies for women who balance career and children.