October 1998

Managing:Legal Issues

Examining Ethics Jewelers of America is testing a first-time policy and the American Gem Society is revising its standards

BY WILLIAM H. DONAHUE JR.

In the past few years, the subject of ethics has generated much discussion in the jewelry industry. Issues range from the highly philosophical to the more concrete, but you might ask why any of it should matter to you. The reason is simple – ethical issues touch practically everything you do every working day. Following clear ethical guidelines is critical to the long-term success of your business.

"I have always had the strong conviction that doing the right thing is also doing the smart thing," says Cecelia Gardner, the new executive director of the Jewelers Vigilance Committee. Ethical business practices will build your reputation, which will build a strong customer base.

While there are disagreements among those in the industry as to how to establish ethical business practices, there is a consensus that ethics policies, clearly and simply stated, are the individual jeweler's best chance for success and the industry's best hope for revitalizing what many see as a reputation badly damaged by TV exposés about a few dishonest jewelers.

"Jewelers who act ethically relate to their customers and to all with whom they have business relationships – such as suppliers, wholesalers, bankers and lawyers – in a way that makes them feel secure and trusting," says Paul Cohen of Continental Jewelers in Wilmington, DE, chairman of the ethics committee of the American Gem Society. "This is a hallmark of jewelers who have succeeded not just for a few years, but for many years and decades."

JA Tackles Ethics Jewelers of America recently announced the next phase of its ongoing Ethics Program, which it describes as a "comprehensive program developed to demonstrate retail jewelers' commitment to professional and ethical service to consumers." The Ethics Program began in 1995, responding to members' calls for JA to raise the level of professionalism practiced by member jewelers.

JA sought input from retail jewelers across the country and the leadership of state jewelry associations in developing its Code of Ethics and Rules of Professional Conduct. The current phase is a pilot program in which the following state affiliates are educating members about the code: Intermountain Jewelers Association, Iowa Jewelers Association, Missouri Jewelers and Watchmakers Association, New Mexico Jewelers Association, Ohio Jewelers Association, Oklahoma Jewelers Association, Pacific Northwest Jewelers Association, Pennsylvania Jewelers Association, Rocky Mountain Jewelers Association and Texas Jewelers Association. The pilot program concludes at the end of this year.

JA's plan includes a provision eventually requiring members to sign the code as a commitment to ethical standards. One part of the pilot program is determining whether such a requirement would affect membership, says JA spokesman Misha Glezin.

Codifying ethical standards is important to JA because it will make members feel there's an inherent value to membership, says David Rocha, deputy executive director. Jewelers who can point to their JA membership as strong proof to consumers that they do business ethically will reap the rewards, he says.

Rocha stresses the importance of the pilot program in helping the association work out the logistics of providing members with educational materials defining ethical behavior. It also will help JA determine how to handle complaints, questions and grievances. "This is much more than a fine-tuning of a document," Rocha says. "We are looking to see how the whole system works."

Enforcement The process for dealing with grievances privately worries some jewelers. They wonder whether JA will come up with an effective means of dealing with violations reported by jewelers or consumers. Rocha says JA will make enforcement of the standards an important part of the program. The current plan is to establish a grievance review committee with an appeal process to the JA Board of Directors.

Gwenae Barker, executive director of the Pennsylvania Jewelers Association, the second largest JA affiliate with 650 retail members, says PJA kicked off its pilot program at its annual convention in August. Her organization provides volunteer members with a copy of the code, an explanation of how to use the complaint-and-review process, details on how to evaluate its effectiveness and other educational material. The volunteers will brainstorm how the code can be used as a marketing tool by jewelers committed to following its tenets.

AGS Revises Rules In its more than 60-year history, AGS has been dedicated to dealing with questions of ethics. Now AGS is revising its separate "Rulings" and "Recommendations" documents into a single document to be known as "Standards." The revision is part of the process of reconfirming the society's ideals and standards, says Robert Bridel, executive director. He compares professional ethics to the test drivers take to get a license. Though everyone starts out knowing the rules, people tend to remember only the ones they use all the time. When confronted with a question about a practice not used often, many people need help and guidance. That's the role ethics policies play for jewelers, he says.

Ethical standards are built into the society's application process, Bridel points out. Before gaining membership, a jeweler must show AGS he or she has a reputation for ethical business dealings in merchandising, marketing and customer relations. AGS also requires its successful applicants to undergo continuing education. AGS has a process to investigate grievances and take action against offending members ranging from reprimand to dismissal from the society. As JA plans to do, AGS provides its members with marketing materials that can be used as part of an overall advertising and communications program. The materials stress AGS members' commitment to ethical practices.

Copyright © 1998 by Bond Communications.