Social Performance
Organizations have a responsibility to monitor and enforce behavior that represents a sense of social responsibility. Therefore, the social performance of a company must be organized in a manner that takes into consideration the laws for which they should uphold. One way to ensure that organizations are aware of those laws and refraining from illegal behavior is to adopt a code of conduct. The code of conduct is contingent upon the industry in which a company operates, but no matter what industry that is, the organization must recognize the laws pertaining to them and ensure that all employees are in compliance.
I’m seeking to establish a code of conduct for my property management company. The property management industry is closely related to the real estate industry because it usually involves the purchase of commercial or residential real estate. The property or properties are usually occupied by tenants who require its owners to maintain their investment and to ensure tenant relations are given considerable attention. Property managers can be owners of the properties they manage or act as third-party managers for owners of real estate properties. Third-party management groups are paid based on a management fee charged to the owner for maintaining the upkeep of the property, employee and tenant relations. Property management groups are also responsible for providing the owners and/or investors with accurate financial information in relationship to how the property or properties are performing. Due to the fact that this a customer/client oriented business, it is very important to establish a code of conduct that clearly defines how this company should act and what they are responsible for doing.
Establishing a Code of Conduct
The first thing to consider when establishing a company code of conduct is the industry in which you operate. The code of conduct for one industry may not be the same as it is for another. Let’s examine the code of conduct for the Real Estate industry, Property Management Companies and Landlord.
The National Association of Realtors (NAR) lists these three areas when considering how its members should behave: * Duties to Clients and Customers * Duties to the Public * Duties to Realtors
The Property Agents Board code of conduct for the Property Management covers the following areas: * Supervision of employees * Duties to clients * Unsatisfactory Professional Conduct and Professional Misconduct
Residential Landlord Association (RLA) code of conduct covers the following: * Duty to comply with legal obligations * Duty to sustain from dishonesty * Duty to attain good standards of practice * Duty to restrain from any act of harassment or illegal eviction * Duty to confidentiality * Duty to protect members of the public * Duty to act at all times without discrimination
Similar
challenges in the real estate industry that effect ethical behavior involve how each of these companies deals with the public and the respective customers or clients. Each of them is held to a high level of responsibility in how they conduct business since they are all customer service related industries as well.
In order for me to establish a code of conduct for my property management company, I must realize how my business relates to the industry and the standards already in place. With that in mind, my company’s code of conduct is as follows: * Build Trust and Credibility * In order to build trust and credibility, our company must keep its commitments to the client. * We must set realistic goals that ensure we meet our obligations to the client. * We must create an environment that can withstand and succeed over time. * Policy and Procedures * Create and maintain policies that serve as a guide for all employees to follow. * Ensure that all employees are aware of the policies and procedures and are in compliance with them at all times. * All policies and procedures should be clearly defined and made accessible to all parties involved. * Respect for Individuals * Treat all people with respect and dignity * No tolerance for any form of discrimination * No tolerance for any form of harassing, offensive or abusive behavior * Create a safe environment for employees as well as customers * Maintain a culture of open and honest communication * Open door policy * Transparency in reporting procedures * Maintain two-way lines of communication between company and employees as well as company and clients * Set the tone at the top * Management is first responsible for adhering to and upholding the code of conduct and then demonstrating it to others * Management is responsibility for enforcement of the code of conduct * Accountability * Each person is responsible for knowing and adhering to the values and standards set forth in the code of conduct. * Each person is responsible for questioning any uncertainty about company policies.
Federal Sentencing Guidelines for Organizations
The Federal Sentencing Guidelines for Organizations states that each organization must adhere to compliance standards and procedures that can reasonably be in place to reduce criminal activity. Any oversight by high-level personnel can leave the company in direct violation with these guidelines and result in large fines and penalties. The guidelines also suggest that companies use best practice standards that are already in place within the industry they wish to operate. In order to be in compliance with the standards, a company must communication these standards with every employee.
Adopting and Enforcement
Adopting and enforcement of a code of conduct will have its challenges, due to the fact that there may be cost involved with establishing the new policies. Usually the cost is related to training and the publishing of new material to distribute to employees. No matter the cost related to implementing a code of conduct, it is minimal compared to the fines my company could face from not having one in place. But, just having the policies in place will not be enough to protect the company from violation. It is also important for us to enforce the policies and ensure all employees are in compliance. Another added cost may be in the need to hire a compliance officer to maintain and enforce the policies and to help the company stay abreast of any changes to the laws set by the different agencies.
My company should also look to establish good corporate citizenship by implementing a code of conduct. This shows that we are concerned with developing and maintaining our social responsibility to the people we serves and the communities we may affect.
Outside Influences on the Code of Conduct
Changes in the economic, political, social, culture and technological forces will have an adverse effect influence on this company’s need to maintain a code of conduct. During times of an economic crisis, many companies are looking for ways to cut back and spend less, but we will continue to maintain the policies to ensure we stay in compliance. There will also be times that call for cuts backs on services we provide, benefits we offer and it can be easy to ignore social responsibilities. But, recognizing these challenges we will plan ahead and continue to implement new policies and procedures accordingly. As a company we may decide it is needed to cut back on the cost of training, which may leave them susceptible to compliance issues. So, to ensure that doesn’t happen, we will utilize all of our in-house resources to help us keep up with those changes. Political changes can also have an effect on the issue with changes to new government policies or regulations that each company is responsible for knowing.
Social and culture changes could mean that as a company we may need to implement new policies to ensure they continue to be in compliance with these standards. When social conditions changes, its every company’s responsibility to know how these changes affects the way they do business.
Technological changes can be good and bad for a maintaining a code of conduct. Usually new technology means a quicker, easier and sometimes better way of doing things. But, often times there are a major cost to implementing changes in technology. Most property management companies use some sort of financial software to maintain its financial reporting. New advances in accounting software may mean a more efficient way of doing things, but may come at a cost too great for a company to absorb. These increases are usually past on to the client or customer, but we will do so in a way that ensures we are keeping with the policies established within the code of conduct.
Companies should first establish a clear concise code of conduct and begin the process of implementing and enforcing it. The other important thing to consider for moving into the future is ensure they have created standard that can be maintain and continues to evolve as the conditions around them changes. If hiring an in-house compliance officer is not a realistic financial goal for the company, then management should create a committee within the organization. It should be the collective responsibility of that committee to ensure that the policies and standards are in place to ensure the company gets into, or stays in compliance with the rules and regulations for the industry. If it is not possible to determine the structure for the code, then the committee to research and create one based off the best practices of other companies in the industry. It is not an option to not establish a code of conduct, but a violation can be costly and will not be reduced because a company failed to implement a policy to protect itself against the behavior of its employees.