Pat Harned, Chief Executive Officer (CEO) of Ethics and Compliance Initiative (ECI) and myself are discussing the firm’s 2018 Global Business and Ethics Survey (GBES). In this series we consider each of the four GBES reports released by ECI. These include The State of Ethics & Compliance in the Workplace, released in Q1 2018; Measuring the Impact of Ethics & Compliance Programs, released in Q2; Building Companies Where Values and Ethical Conduct Matter, released in Q3 and Interpersonal Misconduct in the Workplace: What It Is, Where It Occurs and What You Should Do About It, released in Q4. We discuss each report in a separate podcast and then in Part V, tie them all together. Today, in Part 3, we consider the surveyBuilding Companies Where Values and Ethical Conduct Matter.

This Q3 survey took the principals from ECI’s definition of a high-quality compliance program and looked at how they have been operationalized in corporate compliance programs. This survey started by reporting on proactive communications by corporate leaders. Harned noted, “We talk all the time with them about setting a proper tone from the top. At the same time we spend a lot of time thinking about how do you build trust in a workplace? We were looking first at proactive communication, not just when you’re talking at employees, but does it make a difference the way you go about speaking with employees about the importance of ethics? And we found that it actually does make a difference.” She added an interesting way to consider proactive communication by senior management stating,  “when leaders talk about ethics in the workplace in a way that makes it relevant to the way employees are doing their jobs, they make it real to every day decisions that people make and when they encourage people to speak up in the workplace.”

That led directly into a discussion about trust, which is absolutely critical to having an ethical organization. Harned began by noting, “trust is in a lot of ways it shows up on a lot of company core values statements. It’s something organizations articulate as being critical to the way they want to make decisions and behave in the workplace.” Further, while it may be a difficult concept to articulate, much like Potter Stewart, they know it when they see it. Moreover, “if employees do not trust their managers, they don’t trust that decisions are being made based on the ethical standards of the organization.”

This final insight is the sum of two big things. “The first is whether employees are believing and seeing tangible evidence that an organization holds people accountable to the standards of the organization. If you break the rules, will you be held accountable. The second is just having genuine interactions with your leadership. Among colleagues,  people interacting with each other in a way where the values are evident.”

All of this is just another way of discussing institutional justice but ECI advocates taking it down to the individual manager, middle manager and senior manager levels. Some of the questions you might ask are the following: Are you accountable? Are you personally accountable? And is the company accountable in a way that is transparent and fair across the organization? Do you see that as equally important?

Interestingly, in this study employees related that when their managers and their supervisors are willing to admit mistakes, this demonstrates their own personal accountability. Employees believe they are holding themselves accountable to the standards. Harned said employees “are 25 times more likely to believe that their managers and their supervisors value employees and value genuine interaction with their employees.” This demonstrates that “seeing your own leaders, holding themselves accountable is a powerful influence on not only the way people see the culture of the organization, but how they see their own behaviors as well. People are more likely to hold themselves accountable when their manager is modeling that conduct.”

Few would argue about the importance of communication and trust in the workplace; these are well-known ingredients for harmonious working relationships and a productive working environment. But less is known about the reasons that communication and trust are so essential – especially within the ethics & compliance space.

Join us tomorrow when we discuss the survey Interpersonal Misconduct in the Workplace: What It Is, Where It Occurs and What You Should Do About It. 

For more information on ECI, check out their website by clicking here.

To obtain a copy of all four of the 2018 GBES surveys, click here.

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