2003 Baldrige Performance Excellence Criteria Challenge CEOs to Be 'Chief Ethical Officers'

Responsibility for corporate stewardship and ethical business practices starts at the top with an organization's chief executive and governing body, says the 2003 Baldrige Award performance excellence criteria released today by the Commerce Department's National Institute of Standards and Technology (NIST).

"For America to have a strong economy, we need sound businesses with ethical, responsible leaders," said Commerce Secretary Don Evans. "Great authority is vested in the men and women who run our public corporations, and with such power comes responsibility. Corporate leaders aren't simply stewards of their individual companies. They are stewards of American capitalism itself."

The Baldrige performance excellence criteria can help any organization form the foundation for sound management and ethical business practices. They long have stressed that senior leaders should be ethical role models and that organizations have a responsibility to practice good citizenship. But, this latest version clearly states that the responsibility for legal and ethical behavior starts with the organization's senior leaders and governing body.

"Senior leaders should serve as role models through their ethical behavior ...," according to the 2003 criteria. In addition, it states, "Senior leaders should be responsible to your organization's governance body for their actions and performance. The governance body should be responsible ultimately to all your stakeholders for the ethics, vision, actions, and performance of your organization and its senior leaders."

This emphasis is woven throughout all of the Baldrige criteria's seven categories: leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management, and business results. But, it is most visible in the leadership category, which asks how the organization's governance system ensures management and fiscal accountability and independence in audits while protecting stockholder and stakeholder interests. Also, the results category in the 2003 criteria asks organizations to provide evidence of fiscal accountability, ethical behavior, legal compliance and organizational citizenship.

The renewed emphasis on governance and ethics is a result of national needs for management reform and recommendations from many of the Baldrige National Quality Program's private-sector partners.

Other areas receiving greater attention in the 2003 performance excellence criteria include the need to capitalize on knowledge assets, the need to create value for customers and the organization, and the alignment of all aspects of an organization's performance management system with the results measurements.

In addition to being the basis for a Baldrige Award application, the Baldrige performance excellence criteria are used by thousands of organizations to assess and improve their performance on a wide range of key indicators. The Baldrige Criteria for Performance Excellence is available in editions for business, education and health care online or by calling (301) 975-2036.

Named after the 26th Secretary of Commerce, the Malcolm Baldrige National Quality Award was established by Congress in 1987 to enhance the competitiveness of U.S. businesses. The award promotes quality awareness, recognizes the quality and performance achievements of U.S. organizations, and publicizes successful performance strategies. It has five categories: manufacturing, service, small business, education and health care. The award is not given for specific products or services. Since 1988, 46 organizations have received the Baldrige Award.

As a non-regulatory agency of the U.S. Department of Commerce's Technology Administration, NIST develops and promotes measurement, standards and technology to enhance productivity, facilitate trade and improve the quality of life.