Therapeutic Dose: For Business Ethics,
Baxter Tries the Ripple Effect

Jan. 20, 2005
Stewardship concerns led Baxter Healthcare to create EthicsKit, an online guide to building an ethics program from scratch. Integrity led the company to share it.
The era of corporate scandal is ushering in the era of corporate ethics. Something is broken in our American and global companies, and, it is widely agreed, we need to look more closely at our individual and collective corporate behavior. Firms near and far have established and expanded ethics offices, hired ethics officers, and instituted comprehensive ethics programs—not just compliance programs, but ethics programs seeking to change the attitudes and actions of employees. It’s a positive trend. People want to do the right thing, but sometimes they need guidance. And they need to know their employers want to do the right thing.An honest-to-goodness ethics program typically includes periodic training for all employees (even part-time) on a company’s mission and code of conduct, an anonymous hotline and secure reporting system, and awards and bonuses for model behavior. It communicates ethics, in posters, on the company intranet and website, in seminars and brown bag lunches. And it has teeth. There are repercussions for non-compliance with the code of conduct; top brass are held to the same standards as shop-floor operators. If your paycheck bears the name of a major pharmaceutical company, no doubt you’ve been massaged by the fingers of corporate ethics some time in the past year or so.Can a company do well by doing good? Sure. Studies show that good corporate citizens tend to have staying power. If you’re looking for a clear business case for ethics, look no further than Merck. It built an empire on integrity and corporate citizenship, and suffers today because it strayed from its roots. Ask Wall Street about the importance of ethics. The penalties for careless or unethical behavior these days are swift and severe.Baxter Healthcare knows this. Years ago, before it was fashionable, the Illinois-based firm overhauled its code of conduct and designed one of the most progressive ethics programs around. The initiatives, led by Gretchen Winter and Brenda Hildreth, who head up Baxter’s business practices office, took root. Slowly but surely, calls to the ethics hotline picked up (that’s a good thing), problems and concerns were reported and addressed, employee satisfaction increased, and ethics became central to all company operations.Trouble was, Baxter had no control over its suppliers and partners. For example, a few years ago the company knew that one of its Caribbean suppliers had problems with kickbacks and nepotism, says Hildreth.Hildreth and Winter, who also serves currently as president of the Ethics Officer Association, found a solution: Spread the word. Share our knowledge. Give our partners the tools they need to develop their own ethics programs. They teamed up with Northwestern University’s Center for Learning and Organizational Change, and a year later, EthicsKit was born.EthicsKit is billed as a “business ethics toolkit.” But it’s really more than that. It’s a step-by-step road map for building an entire ethics programs from the ground up: how to, for instance, create a meaningful code of ethics, to establish open communications and an internal reporting system, and to monitor and maintain ethics within an organization. The online version is interactive, with links to other sites of other firms and organizations that have model ethics initiatives.When EthicsKit was finished, Baxter made it mandatory reading for all suppliers, and even helped some of them, including that Caribbean supplier, train employees. But Hildreth and Winter faced another dilemma: Keep this to ourselves and suppliers, for competitive advantage, or share it, even with our fiercest competitors? They chose the latter. “Ethics is not proprietary,” Hildreth says. “If someone else benefits, that’s okay. The more ethical we can make the business climate, the better.”Go to Baxter's website, download EthicsKit, and see for yourself. Then spread the word.
About the Author

Paul Thomas | Managing Editor