Ethics getting in the way of business

cq5dam.web.231.231.desktop​In 2015, Deloitte published a compendium​ on building world-class ethics and compliance programs.  In it, they expand on five (5) key differentiators in the highest performing programs.  I was particularly interested in the one dealing with corporate culture.  My reading notes are at the end of this post but allow me to share one passage that struck me:

“Culture has always been important to how organizations operate.  So why is it getting so much attention lately?  One reason is that regulators have come to the realization that without a culture of integrity, organizations are likely to view their ethics and compliance programs as a set of check-the-box activities, or even worse, as a roadblock to achieving their business objectives.”

At any given time, organizations employ a few executives and managers who believe that compliance programs get in the way of doing business.  What they say in meetings, what they write in emails, and how they behave generally undermines the program.  If you work with one of them, consider this other passage from the report:

“Nothing will damage culture more than the malcontents.  When people get in the way of supporting the culture, they can cause roadblocks and undermine the efforts of the enterprise.  They must be identified, counseled, and offered the opportunity to conform to expected behavior, or they should be separated from the organization.”

Ethical leaders have the responsibility to ensure that counseling is provided or separation effectuated. It takes courage.  As all forms of leadership do.

Additional reading notes:
  • Culture is moving from a lofty, “squishy” concept to something that should be defined, measured, and improved.
  • Strong cultures have two common elements: there is a high level of agreement about what is valued, and a high level of intensity with regard to those values.
  • Culture is about how things get done in an organization.
  • A culture of integrity is generally characterized by:
  • A clear set of values
    • Tone at the top
    • Operational and business imperatives that align with the messages from leadership related to E&C
    • Middle management carries the banner
    • Employees are comfortable speaking up
    • Senior leaders hold themselves and others accountable
    • Values are across the hire-to-retire lifecycle
    • Rewards and promotions are based, in part, on good behavior
    • Procedural justice permeates the organization
  • Use cultural assessments to get an accurate picture
  • Values must be clearly and consistently communicated
  • Cultural audits should be part of the due diligence process in M&A
  • Performance reviews should be structured to include how results were achieved
  • Use stories to avoid “values fatigue”
  • Culture cannot depend on a single person or group.  It must survive changes at the top.
  • The new workforce is driven by a sense of purpose.  To retain this workforce, our culture must have staying power.​

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