HomeMy WebLinkAbout10C - Ethics in Governance
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
4646 Dakota Street S.E.
Prior Lake, MN 55372-1714
CITY COUNCIL AGENDA REPORT
March 19, 2007 fJ
10C (\!
Frank Boyles, City Managert\
Consider Approval of a Request to Prepare a Report Regarding Ethics in
Prior Lake Governance.
Introduction
The purpose of this agenda item is to determine whether the City Council
would support the preparation of a report outlining actions the City could take
to assure a focus on ethics in all phases of City operations.
Historv
Events both locally and nationally of late suggest the need for a purposeful
approach to ethics. The Enron scandal raised this issue on a national basis.
Locally, the fire chief/miscellaneous fund checkbook episode demonstrated
that such things can happen "close to home."
Current Circumstances
The effectiveness of Prior Lake is directly proportional to the degree of
confidence that property owners/taxpayers have in their local government. To
date, they have supported the 2030 Vision and Strategic Plan. This is perhaps
best demonstrated by the 2 to 1 passage of the Fire Safety and Service
referendum last September. But residents must believe that their City is a
good steward of the public dollar.
There are a number of reasons for taking affirmative measures to encourage
ethics in Prior Lake government:
It is the right thing to do.
Ethical cultures are created, they don't just happen.
Such action is consistent with small town values of the strategic plan.
Employee awareness encourages ethical behavior.
Such action spawns confidence in government.
While I have not done complete research, I have learned of two organizations
in the metropolitan area which specialize in this field. I believe that there are
likely to be more.
The Center for Ethical Business Cultures (CEBC) is a non-profit corporation
founded in 1978 by Minnesota business leaders. They use a 28-question
integrity survey to assess ethical dimensions of the organization, consult with
leaders to create and sustain ethical cultures and provide ethical leadership
development through training. Attached is additional information from CEBC.
Prices range from $11,000 for training-only to up to $36,000 for a complete
package including surveying, consultation of senior leadership, training of
www.cityofpriorlake.com
Phone 952:447.9800 I Fax 952.447.4245
ISSUES:
ALTERNATIVES:
RECOMMENDED
MOTION:
leadership team, training all managers, supervisors, non-supervisory and paid
on-call employees (Attachment 1.)
The second organization is the Caux Round Table (CRT). CRT is
headquartered in St. Paul, Minnesota. It is an international network of
principled business leaders working to promote moral capitalism. The CRT
advocates implementation of the CRT Principles for Business through which
principled capitalism can flourish; and sustainable and responsible prosperity
can become the foundation for a fair, free and transparent global society. The
CRT principles apply fundamental ethical norms to business decision making.
A specially designed process for incorporating the CRT principles into the
culture of a corporation is available for companies to use. The CRT has also
published, "Principles for Government" which apply to all levels of government.
I intend to become more familiar with this organization if the council directs the
preparation of a report. The Principles for Government are included as
Attachment 2.
The action recommended below would not commit the Council to engage an
organization for this purpose. Instead, the staff is seeking Council direction
regarding whether additional investigation, analysis and recommendation is
appropriate. If the council believes that this is a worthwhile endeavor, I would
prepare a report with alternative ethics efforts for the Council to consider
together with funding sources therefore. I would also check with the League of
Minnesota Cities to see if they are aware of such efforts.
1. Direct the staff to prepare a report outlining various options for
supporting ethics in Prior Lake governance.
2. Take no action.
Alternative #1
o
CENTER FOR ETHICAL
BUSINESS CULTURES'"
BUSINESS
PARTNERING WITH
THE UNIVERSITY
OF ST. THOMAS
1000 LaSalle Avenue
TMH 331
Minneapolis,
Minnesota
55403.2005
6519624120
TELEPHONE
651 962 4042
FACSIMILE
mail@ cebcglobal.org
www.cebcglobal.org
c,
A-t\.ul\tv-(A.. t- I
13 March 2007
Mr. Frank Boyles
City Manager
City of Prior Lake
4646 Dakota Street SE
Prior Lake, MN 55372-1714
Dear Frank,
Thanks for the opportunity to visit with you. I have appreciated the opportunity to learn
more about the City of Prior Lake and the opportunities and challenges you are
confronting.
Per your request, enclosed is information about the CEBC Integrity SurveyTM. In addition,
per your request, I am suggesting some additional ways that the Center for Ethical
Business Cultures (CEBC) might assist you. Please note that this is not a formal proposal.
Based on your requirements after consulting with the city council, we would prepare a
formal proposal.
About CEBC and Its Work
The Center for Ethical Business Cultures is a 501(c)3 not-for-profit organization founded
in 1978 by Minnesota business leaders. The Center is dedicated to assisting business
leaders in creating ethical and high performing cultures at the enterprise, community and
global levels. The Center is governed by an independent, business-led Board of Directors
and is affiliated with the University ofSt. Thomas where is has been housed since 1988.
For almost 30 years, CEBC has been working with leaders to help "get the culture right."
Inside of organizations, we do three things: 1) We use the CEBC Integrity SurveyTM to
help organizations assess the ethical dimensions of their climate. 2) We consult with
leaders to assist them in creating and sustaining ethical cultures within their organizations.
3) We provide ethical leadership development designed for all levels of organizations,
from executive leadership teams to middle managers and frontline workers. We have
worked with units of government at the municipal, county, state and federal levels.
In the broader community, through speaking, writing and other public presentations, CEBC
promotes the critical role which ethical behavior plays in organizational life. At the federal
level, CEBC has provided leadership through its participation on the Advisory Group to the
United States Sentencing Commission as it revised the Federal Sentencing Guidelines for
Organizations and through its participation in President George W. Bush's Economic
Forum on Corporate Responsibility.
CEBC works with students at the high school, undergraduate and graduate levels to teach
them the importance played by developing a clear moral center to their role as developing
Confidential & Proprietary
Information contained herein cannot be disclosed or used outside the areas outlined in this Letter of Agreement
without the express written consent of the Center for Ethical Business Cultures@,
leaders. We work with scholars to foster research into critical dimensions of creating ethical cultures.
Our Approach
CEBC's consulting and ethical leadership development training utilize a practical (versus theoretical) and
highly interactive delivery model that integrates ethical principles and "real world" organizational
decision-making. Our approach to building and sustaining an organizational culture puts integrity at the
core and emphasizes four critical themes evident in successful organizations:
.
Values: The organization's core values are developed through rigorous thinking and testing
against real-world situations to ensure that it means what it says.
Improved Outcomes: Organizations that develop ethical cultures - over time - are more
successful than organizations that do not and at the same time will minimize the risk of costly
missteps.
Leadership: The role of leadership cannot be overestimated in building an organizational
culture driven by mission, vision and values. Leaders set the "tone at the top" by modeling
behavior, recognizing and rewarding excellent conduct, and reinforcing what is acceptable and
what is not.
Stakeholders: The importance of respecting and serving multiple stakeholders - including
customers, employees, suppliers, legislators, citizens and communities - is a key dimension of
sound ethical decision making. In building a culture around mission and values, leaders must
engage the stakeholders of the organization, particularly employees.
.
.
.
Assessing Organizational Culture: CEBC Integrity SurveyTM
The CEBC Integrity SurveyTM was developed by CEBC and Gantz Wiley Research (GWR, now a part of
Kenexa). GWR, an international survey research firm founded in 1986, helps clients drive business
performance through the strategic use of employee and customer input.
The Survey
Drawing on CEBC's almost thirty years of expertise in creating and sustaining ethical cultures and
GWR's twenty years of surveying savvy and experience, the CEBC Integrity SurveyTM is a 28-item
survey instrument which provides an in-depth assessment of an organization's ethical environment.
The Integrity Survey probes five dimensions of organizational culture which we understand to be the
building blocks of an ethical workplace:
1) Trust, Integrity and Honesty
2) Mission, Vision and Values
3) Leadership
4) Stakeholders
5) Process Integrity
One-third of the items in the CEBC Integrity SurveyTM are indexed and benchmarked against
WorkTrends™, GWR's normative benchmarking database.
Confidential & Proprietary
Page 2
Information contained herein cannot be disclosed or used outside the areas outlined in this Letter of Agreement
without the express written consent of the Center for Ethical Business Cultures@.
Survey Process
There are three basic steps in the survey process:
1. We will work with you to identify any needed customization and design the questions to meet
those needs. This step normally takes one to two weeks, depending on the level of customization
desired.
2. We will administer the survey. When administered electronically, this step can be accomplished
in about two weeks.
3. We will process the survey data and prepare the reports you need. This step takes two to three
weeks.
Survey Population
Based on our conversations, we would recommend that the following participate in the survey:
. All city employees, both paid and unpaid (this would include the volunteer firefighters and any
other similar volunteers);
. Participants in the strategic planning process
. Any other groups of stakeholders which you might identify
If! understand the numbers correctly, this is going to be about 250-300 people.
Benchmarks
WorkTrends™ is Gantz Wiley Research's unparalleled normative benchmarking database, providing
current, relevant, and flexible data. Most other survey research firms build their norms by simply
aggregating data from clients who have decided to do an employee survey with them in the past. Clearly,
such data are unlikely to be either broadly representative or up-to-date.
By contrast, to create W orkTrends, Gantz Wiley Research commissions a periodic, nation-wide panel
survey of U.S. adult workers. This sample of U.S. workers is drawn to match the latest U.S. census
statistics. The sample reflects 16 broad industry groups, and allows for comparisons based on industry,
job type and level, tenure, race, gender, and other important variables. WorkTrends provides a valid,
meaningful frame of reference for interpreting survey results.
Reporting and Presentation of Findings
While there is no question that quality data (reliable, valid, actionable) are absolutely critical for helping
organizations drive high performance, we recognize that those data are meaningless if not effectively
communicated. At the start of any new project, CEBC works closely with clients to determine the most
effective and efficient approach for communicating survey results. Typically, the data from the CERC
Integrity SurveyTM are presented in two ways, written reports and executive presentations. Reports, which
can vary in length and depth, are designed to portray large amounts of data in an easy-to-read format that
quickly conveys the salient points. Reports can be delivered electronically via permissioned access or on
paper, depending upon client preferences.
The reports contain:
Confidential & Proorietary
Page 3
Information contained herein cannot be disclosed or used outside the areas outlined in this Letter of Agreement
without the express written consent of the Center for Ethical Business Cultures@.
. A table of survey items and easily understandable explanations of statistical measures employed
in the format prescribed by the client.
. Overall theme and items within theme results.
. Top- and bottom-ten items.
. Comparisons to trend data (in subsequent administrations).
. WorkTrends™ data for an appropriate benchmark group (e.g., Government agencies) on
comparable items.
While the content and scope of executive presentations vary based on your specific needs, type of
audience, appetite for detail, and desired follow-up activities, presentations typically include the
following:
. Explanation of results (i.e., how to read the data, determine strengths/opportunities, interpret
significant differences).
. Summary of key findings highlighting key strengths, opportunities, comparisons to benchmarks
and subgroup (e.g., functions and demographic) differences.
. Results at the theme (e.g., Process integrity) and item levels.
. Suggested priorities for action.
Further Work
You asked that I describe additional steps which CEBC might take after a client uses the Integrity Survey.
We at CEBC operate from the premise that every organization has a culture. Leaders have a choice about
whether or not they are deliberate in shaping that culture. We believe that culture, particularly its ethical
dimensions, should be a part of every organization's strategic planning, with goals, objectives and
benchmarks attached.
Based on that premise, we would suggest that creating and sustaining an ethical culture should be a key
ingredient ofthe City of Prior Lake's strategic planning going forward. Based on our conversations,
some or all of the following steps might be elements of that strategy:
. Assessing the ethical climate ofthe City of Prior Lake through use of the CEBC Integrity SurveyTM
provides a benchmark which can be used to measure progress.
. Typically, the Integrity Survey points to a gap in perception between the senior leaders of
organizations and those in the middle and on the front lines. Typically, also, the Integrity Survey
points to shortfalls in what CEBC calls "process integrity." ("Process integrity" describes the ways in
which the human processes of an organization-recruiting, hiring, communicating, evaluating,
compensating, promoting, demoting, firing, etc.-align (or don't!) with its values and mission.) If
those results are found to be true for the City of Prior Lake, we would want to consult with the
leadership team (you, the mayor and city council, etc.) to identify concrete step to address those
issues.
. The following are steps we frequently take with organizations:
~ A day-long (8 hour) seminar for the city council, mayor, city administrator and other senior
leaders focused on the key role leaders play in creating and sustaining an ethical culture within
your organization.
Confidential & Proprietary
Page 4
Information contained herein cannot be disclosed or used outside the areas outlined in this Letter of Agreement
without the express written consent of the Center for Ethical Business Cultures@.
).> A % day (6 hour) seminar for all managers and supervisors focused on their distinctive role in
sustaining an ethical culture.
).> A series of half -day (4 hour) seminars for non-supervisory staff focused on ethical decision
making.
).> Evaluation and revision, if necessary, of processes within the City of Prior Lake to make certain
that they are aligned with its values and mission.
).> Reassessment within 18-24 months to measure changes which have taken place.
CEBC's Role
In developing a program to meet your requirements, CEBC will work closely with you and your
leadership team. We will want to clearly understand the City, its strategic situation, culture and leadership
so that our work will synch with initiatives which are already underway, particularly with your 2030
Vision and Strategic Plan.
The steps outlined below provide more detail. Final content and costs are subject to discussions. Please
note that the Center gives a 10% discount to nonprofit organizations and government agencies which has
been included in the prices below.
Enhancing an Ethical
Culture Seminar
Senior Leadership Team
8 hours
$7,000-$10,000, depending
on customization needed in
items and reports.
$5,000 plus expenses
$13,500 plus expenses (Price
includes customization for the
City of Prior Lake)
Employees & key
CEBC Integrity SurveyTM stakeholders
Consultation, as needed
Senior Leadership
8 hours
Ethical Decision Making
Seminar for Managers
All managers &
supervIsors
6 hours
$5,625 plus expenses
Ethical Decision Making
Seminar
All non-supervisory paid
and volunteer employees
4 hours
$3,600 per session plus
expenses (Price for more than
3 sessions is $3,240 each)
Alternative
You asked that I suggest an alternative strategy for addressing the ethical concerns you have raised. A
bare minimum strategy, and, in my view, a much less prudent and strategic use of resources, would be to
provide training such as the Ethical Decision Making Seminar for all paid and volunteer employees. In
groups of30 or less, this would require three to four sessions with a price range of$II,000-$13,000.
Next Steps
I understand that the city council has a meeting scheduled for 19 March at which you will present the
information you have gathered to facilitate their decision making. I will expect to hear from you after that
to plan for whatever next steps are appropriate. From a project management point of view, it will be
Confidential & Proprietary
Page 5
Information contained herein cannot be disclosed or used outside the areas outlined in this Letter of Agreement
without the express written consent of the Center for Ethical Business Cultures@.
helpful to know as soon as possible should the council decide to proceed with the Integrity Survey so that
we can plan appropriately.
Frank, we at CEBC would very much enjoy the opportunity to assist you and your colleagues as you
continue strengthening the culture ofthe City of Prior Lake. These efforts have the potential to
dramatically enhance the City of Prior Lake. I look forward to hearing from you.
1/dS,
Robert C. Shoemake
Director, Programs & Membership
Confidential & Proprietary
Page 6
Information contained herein cannot be disclosed or used outside the areas outlined in this Letter of Agreement
without the express written consent of the Center for Ethical Business Cu!tures@.
A~ ~~,-.L Z--
CAUX
TAB LE
CRT PRINCIPLES FOR GOVERNMENT
INTRODUCTION
Persuaded by experience that a person's moral sense contributes to success in business
endeavors, in 1994 the Caux Round Table published certain Principles for Business as a
world standard against which business behavior could be measured.
After a decade of remarkable economic growth in many parts of the global economy, the
Caux Round Table notes that sufficient investment capital has been accumulated that,
should it be invested wisely in poor and developing countries, a dramatic reduction in
levels of poverty could be achieved for most of humanity. In the stock markets of the
world some thirty trillion US dollars are available for equity investment. Trillions more
of US dollars are available in short term money markets, in currency markets, and in
possible debt financing. There is more liquid capital available to the owners of private
business than poor countries could presently absorb into their economies.
Yet in most instances such capital is not invested where people are poor. In the minds of
many, therefore, globalization remains vulnerable to a moral critique that it does not, and,
some would say that it can never, achieve social justice. The Caux Round Table believes
that, while private business can improve standards of living through the creation of
wealth, business only responds to opportunities for profitable exchange. The investment
of capital waits upon favorable conditions; such investment is reactive and selective,
always searching for well-founded expectations of return as well as for security that those
expectations will come to fruition.
It is the work of others, not primarily that of business, to create the fundamental
conditions under which capital can be invested. Bluntly, it is in the first place the task of
responsible government to provide for sustained wealth-creation. Business can be called
upon to invest responsibly within the framework of the Caux Round Table's Principles
for Business once governments erect and sustain the requisite infrastructure of laws,
regulations, and physical improvements to transportation and communication.
Bad government is a short cut to endemic poverty.
Therefore, the Caux Round Table offers the following Principles for Government in the
expectation that better government around the world will attract greater investment of
private capital to create more wealth for poor people.
Just as the Principles for Business, these Principles for Government derive from two
ethical ideals: "Kyosei" and "Human Dignity". The Japanese concept of "Kyosei" looks
to living and working together for the common good while the moral vision of "Human
Dignity" refers to the sacredness or value of each person as an end, not simply as a means
to the fulfillment of others' purposes or even of majority demands.
2
GENERAL PRINCIPLES
1. Public power is held in trust for the community
Power brings responsibility; power is a necessary moral circumstance in that it binds
the actions of one to the welfare of others.
Therefore, the power given by public office is held in trust for the benefit of the
community and its citizens. Officials are custodians only of the powers they hold;
they have no personal entitlement to office or the prerogatives thereof.
Holders of public office are accountable for their conduct while in office; they are
subject to removal for malfeasance, misfeasance or abuse of office. The burden of
proofthat no malfeasance, misfeasance or abuse of office has occurred lies with the
office holder.
The state is the servant and agent of higher ends; it is subordinate to society. Public
power is to be exercised within a framework of moral responsibility for the welfare of
others. Governments that abuse their trust shall lose their authority and may be
removed from office.
2. Discourse should guide application of public power.
Public power, however allocated by constitutions, referendums or laws, shall rest its
legitimacy in communicative action and discourse among autonomous moral agents
who constitute the community to be served by the government. Free and open
discourse, embracing independent media, shall not be curtailed except to protect
legitimate expectations of personal privacy, sustain the confidentiality needed for the
proper separation of powers, or for the most dire of reasons relating to national
security.
1. The Civic Order must not forget its duties to citizens.
Public power constitutes a civic order for the safety and common good of its
members. The civic order, as a moral order, protects and promotes the integrity,
dignity, and self-respect of its members in their capacity as citizens and, therefore,
avoid all measures, oppressive and other, whose tendency is to transform the citizen
into a subject. The state shall protect, give legitimacy to, or restore all those principles
and institutions which sustain the moral integrity, self-respect, and civic identity of
the individual citizen, and which serve to inhibit the processes of civic estrangement,
dissolution of the civic bond, and civic disaggregation. This protects the citizen's
capacity to contribute to the well-being of the civic order itself.
3
4. Corruption may not be condoned.
Public office is not to be used for personal advantage, [mancial gain or as a
prerogative manipulated by arbitrary personal desire. Corruption - fmancial, political
and moral- is inconsistent with stewardship of public interests. Only the Rule of Law
is consistent with a principled approach to use of public power.
5. Security of persons, individual liberty and ownership of property are the
foundation for individual justice.
The civic order, through its instrumentalities, shall provide for the security of life,
liberty and property for its citizens in order to insure domestic tranquility.
The civic order shall defend its sovereign integrity, its territory, and its capacity to
pursue its own ends to the maximum degree of its own choice and discretion, within
the framework of intemationallaw and principles of natural justice.
6. Justice shall be provided.
The civic order and its instrumentalities shall be impartial among citizens without
regard to condition, origin, sex or other fundamental, inherent attributes. Yet the civic
order shall distinguish among citizens according to merit and desert where rights,
benefits or privileges are best allocated according to effort and achievement, rather
than as birth-rights.
The civic order shall provide speedy, impartial and fair redress of grievances against
the state, its instruments, other citizens and aliens.
The Rule of Law shall be honored and sustained, supported by honest and impartial
tribunals and legislative checks and balances.
7. General welfare contemplates improving the well-being of individual citizens.
The state shall nurture and support all those social institutions, most conducive to the
free self-development and self-regard of the individual citizen. Public authority shall
seek to avoid, or to ameliorate, conditions of life and work which deprive the
individual citizen of dignity and self-regard or which permit to powerful citizens the
exercise of dutiless opportunities of exploitation ofthe weak.
The state has a custodial responsibility to manage and conserve the material and other
resources that sustain the present and future well-being of the community.
4
8. Transparency of government ensures accountability.
The civic order shall not act with excessive secrecy or provide its citizens with
inadequate information as to the acts and intentions of the civic order and its
instruments, which secrecy or withholding of information would prevent its citizens
from acting the citizen's part in the discourse providing the civic order with its
authoritative legitimacy.
9. Global cooperation advances national welfare.
Governments should establish both domestic and international conditions under
which justice and respect for the obligations arising from treaties and other sources of
international law can be maintained; live together in peace as good neighbors; and
employ international machinery and systems for the promotion of economic and
social advancement.
For more information, please contact:
Stephen B. Young
Global Executive Director, Caux Round Table
Phone: 651-265-2761
Fax: 651-223-5119
E-mail: CauxRT@aol.com