The Analysis: Ethical Janitors, Ethical CEOs

Ascension Health was right to scrutinize itself based on company principles, not laws. But more stakeholders should be involved

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Johnson & Johnson (JNJ) faced a crisis in 1982: bottles of its Extra Strength Tylenol had been laced with cyanide. With the fate of the company quite possibly hanging in the balance, CEO James Burke turned to the company credo, which began, "We believe our first responsibility is to doctors, nurses, and patients, to mothers and fathers and all others who use our products and services." Using those guiding principles, he made an unprecedented move toward corporate transparency and responsibility: He took the crisis public. J&J lost market share initially in the wake of public fear but soon regained it. Indeed, the company's handling of the situation is seen as textbook example of crisis management.

The lesson of the incident would not be lost on Ascension Health's sponsors council: a company mission is something that should be constantly called upon to improve business.

Even so, few corporations have systems in place to measure how well they carry out their mission each day, such as the system Ascension is developing. "I feel they have done something out of the box," says Subir Chowdhury, CEO of ASI Consulting and a quality management expert. "Most companies do not measure the ethics of their employees and processes."

Ethics for the Rank and File

Still, there is room for improvement in the Ascension initiative. First, it must propagate the assessment through its ranks. "In the health-care profession particularly, but in business in general, organizations are exposed to considerable risk with respect to the conduct of all employees—not just their senior executives," says Ron Berenbeim, principal researcher of ethics at the Conference Board and an adjunct professor at the New York University's Stern School of Business.

Chowdury agrees: "In any assessment, the leadership must share the data to all levels of the organization, from a janitor to a CEO. If it is not communicated at all levels, I don't think it will accomplish the goal."

And according to Berenbeim, it's not just employees who should be involved: Other stakeholders, like patients and suppliers, should be solicited for feedback.

Berenbeim also believes that the self-assessment and improvement process itself could be improved upon by more objectivity. "It does have a third- party assessment, but it's the same people who designed the program," says Berenbeim. "A real third-party assessment would be by someone who had no involvement in the design of the program."

One of the strengths of the Catholic Identity Matrix is its adaptability; just as one of the governing body's strengths is its continued desire for improvement: Next year, when the sponsors council reveals the progress of goals, it will also consider changes to the assessment initiative.

Douglas MacMillan is a staff writer for BusinessWeek.com in New York.