Ethics in Corporate America have experienced a setback in recent years. Enron, WorldCom, and Martha Stewart are examples of highly publicized cases where there was a failure of the corporation to maintain an ethical environment. Whether large or small, profit or not-for- profit, corporations have a responsibility to act ethically.
When speaking of community associations, the standard of ethics applies equally to the management team, the Board of Directors, committee members, club officers, and association volunteers. Implementing ethical standards, an ethical code, and a code of conduct for all who participate in the governance of our Association can circumvent impropriety.
Ethics is defined as a system of moral principles and the rules of conduct with respect to a particular group or organization. There is a difference between a code of ethics and a code of conduct. The code of conduct provides precautions on how one must behave. The ethical code describes statements of core values that indicate how one should behave. A person who is ethical acts with fairness, equity, and impartiality and respects the rights of other people. Someone who is unethical chooses personal or professional gain at the expense of others.
In order to see how ethical standards can be applied, there needs to be an understanding of conflicts of
interest. Conflicts of interest can best be described as situations where one’s own benefit or gain takes
precedence over one’s duty to another. There are two types of conflicts: potential and actual. A potential conflict of interest exists when there is a possibility that a decision might be influenced by one’s personal circumstances. For instance, a director who has a relative in the landscape business might potentially alter a decision in order to help the relative get a contract. Potential conflicts of interest can become actual conflicts when the decision-making process is subverted by the
conflict. Most observers believe that actual conflicts of interest can be avoided by disclosure of the potential conflict. The argument is that known potential conflicts of interest will never manifest themselves as actual conflicts of interests as long as everyone understands that the potential exists.
Ethics for community management professionals are defined through a system of certification and designation. Managers strive to exhibit their standards of ethics by adhering to a professional code of ethics. Professional ethics are standard in professions such as those practiced by doctors, lawyers, accountants, etc. Similarly, professional managers adhere to ethics in several formats. The Community Associations Institute (CAl), through its system of designations and certification, requires adherence to a code of ethics. Whether the designation is the CMCA, AMS, or PCAM, CAl has an established
ethical standard for the profession. Please note that Rich Smetana has his CMCA designation and I have my CMCA and AMS designations through CAI. According to the CAl, there is a strong need in the
industry for ethical standards and codes of conduct. In order to create codes of ethics and of conduct, several steps need to be followed. First, the Board needs to identify the core values of the community, which normally include preserving and enhancing property, safety, fairness, and respect. Core values involve more than just buildings, money, and rules; they may also include protecting the environment plus respecting diversity and individual rights of the homeowners. Second, a community association/Board needs to understand that corporate ethics do not exist independently from social
principles — they are, in fact, a reflection of basic human values. Sun City Shadow Hills does have a Code of Conduct that all Board/committee members agree to abide by when serving on behalf of the community.
At Sun City Shadow Hills, we are blessed to have staff and governance volunteers who exhibit high standards of ethics and the desire to follow our code of conduct. We will always strive to ensure that our Association is managed to reflect our community’s positive values and will act professionally in all we do for you. With that being said, and with the start of a new year, I would like to thank all the committee members, sub-committee members, Association volunteers, and especially the Board of Directors for their many years of tireless and dedicated service. A warm round of applause
is deserved by all.