How to Protect Business

First of all, don't be naïve and blissfully think it can't happen to you. (Maybe it already has.) Start by defining, in writing, exactly what your ethics policies are. Maryland-based quality management consultant Ed Caldeira says every company needs not only written ethics guidelines, but training as well. "You need to explain why supers can't be allowed to build houses on the side - because it makes it too easy to ask for special 'deals' from the trades," he says. "When you have responsibilities documented, it makes it much easier to hold people accountable."

Southern California-based Fieldstone Communities has written forms that employees are required to file if they ever have a trade contractor or vendor do private work for them. "Even if one of our guys just wants to have one of our plumbers install a new toilet in his private home, he has to file a full record of the transaction, to verify it's at market value," says Rick Peters, Fieldstone operations manager. "All of those forms are disclosed to our chairman, Peter Ochs, at the end of every year.

"When people are hired, we ask they sign an acknowledgement form that lists examples of things we'd like them to avoid because they might be perceived as conflicts of interest. We want to stay out of the gray areas," Peters says. "Every employee carries a card listing our company values, one of which is 'integrity in the conduct of our business.' We are just as careful in our partnering relationships with trades, asking to hear from them about anything that might be perceived as a conflict of interest."