When the law is unjust

Yesterday I visited the National Museum of African American History and Culture in Washington, D.C.

As a human, I was hurt by the wickedness of some and moved by the courage of others. As an ethics & compliance officer, one of the many things that struck me was how unjust the law can be. We commonly say that the rule of law is preferable to the rule of man. While that is often true, it ceases to be when man creates laws that support injustice.

There are unjust laws still today. And there are unjust policies in organizations. The ethical leader must remember that ethics is not simply a requirement that we go beyond what the law requires. It is, at times, a duty not to obey the law.

A hundred years from now, people will look back at the public laws and private policies in place today and pass judgment. What ought we to change?

Employee activism

Some Wayfair employees took to the streets yesterday after learning that their company had authorized the sale of beds to a federal contractor operating detention centers for children at the US border. They wanted no part of it.

Employee activism is on the rise, in part because more employers are promoting a speak-up culture. It’s often best for companies to learn about problems before they reach the customer, or the press, or the regulators. But while companies want their employees to raise quality concerns with their supervisor before a product ships out, they don’t necessarily want them to take to the streets with a bullhorn.

The younger generation of workers is increasingly choosing to work at companies like Mayfair because they don’t want to support organizations that make cigarettes or weapons or products that hurt animals or the environment. This is positive because companies get workers that believe in their purpose, which improves performance.

Until there’s a disconnect.

A speak-up culture is good but companies need to listen up as well. When detention centers or opioids or racism hit the news cycle, companies need to turn to their employees and ask “What should we do about this, if anything?”

Want a good culture? Ease up on the scary stories.

In a recent piece, Andre Pinto reminds us that “exposure to other people’s dishonesty might lead us to be dishonest as well.”

Pinto points out that our moral compass is not fixed and can be swayed by how things are done around us. It can be swayed either way, so that other people’s honesty can also lead us to be more honest. The same goes with trust, respect or integrity.

This highlights the danger of sharing a disproportionate number of real cases of wrongdoing within a company, a practice that many ethics and compliance programs have adopted. By sharing bad examples on a weekly or monthly or even quarterly basis, we risk normalizing the behavior and increasing its frequency.

I have written before about the benefits of recognition. My take has usually been that when we “recognize” one person for their good behavior, what we actually do is help everyone else recognize the behavior we want to see. Well, social science tells us that if they see it often enough, they might start adopting it. Thus, we ought to favor positive examples over negative ones.

Corruzione

Within 10 years, we will all be reading about corruption scandals in Italy.

How do we know this? The International Olympic Committee just selected the country to host the 2026 winter Olympics.

Billions (trillions?) of euros will converge on the cities of Milan and Cortina d’Ampezzo in the next few years. Corrupt business people and politicians have already laid their plans.

So if your organization has a presence in Italy, the time to start building your defenses is now. Review your policies, create a multi-year training plan, implement new controls and schedule audits. More importantly, review all your processes and make sure they create the right culture.

Olympic Games and corruption go hand-in-hand. You can choose not to be part of it.

First monitors, now psychologists

A few regulators in Europe and Australasia are appointing psychologists to company boards. The regulators believe that psychologists can help identify risks by understanding the culture of the company.

Of course.

Companies should not wait until a psychologist is forced on them by a regulator, no more than they should wait for a monitor. It’s clear that having someone in the organization who can understand, explain, measure and improve the culture is a plus. Yet, few companies are appointing Chief Culture Officers.

Sometimes, industries self-regulate before governments decide to regulate them. At other times, governments take the first step. When it comes to recognizing the importance of culture, governments now seem to be ahead.

When to exercise ethical leadership

WalMart settled its long-standing FCPA enforcement action yesterday. Under the administrative order, WalMart agreed to pay $327M.

While this amount seems large, our friend Matt Kelly reminds us that WalMart’s global sales will raise as much in 5 hours. A small price to pay given the expansion provided by the corrupt practices.

To be fair, Walmart also spent $900M to improve its controls and systems after the fact. The mighty retailer is now in a position to become a leader of good compliance and ethical practices. Will it seize the opportunity?

If you see an illegal or unethical practice in your organization today, imagine yourself five years down the road after an enforcement action. Create a vivid picture of paying fines, beefing up your compliance program and trying to restore your reputation. Then, instead waiting for the inevitable, take immediate action.

Every day offers an opportunity for ethical leadership.

The Plain View Project

The Plain View Project is a database of public Facebook posts and comments made by current and former police officers from several jurisdictions across the United States. The database will prompt several police departments to examine their culture.

Leaving aside the disturbing posts made by some of the officers, the project confirms that having a social media policy is not enough (many of the police departments had a policy prohibiting such posts). These policies need to be enforced, which requires that posts be monitored or at least audited regularly. I would hope that if the police departments had identified these posts before the Project did, they would have taken action. The conversation that is about to take place within the police force would have taken place much earlier.

The comments posted on Facebook were probably made out loud within precincts and patrol cars countless times before – and tolerated by colleagues and supervisors. Those who wanted to speak up probably feared retaliation. So now, as a result of widespread inaction, all officers, good and bad, are tarnished.

Ethical leadership takes courage.

Scary tactics

Politicians do it all the time. They use fear to gain votes, dividing countries that would be greater if united.

E&C professionals should avoid these short-term gimmicks. They should instead seek to inspire and to unite employees. Dangling the possibility of massive FCPA fines in front of a foreign manager is unlikely to eliminate corruption in their country. We have a better shot if we show them that ending corruption can lift people out of poverty and save millions of lives.

As you sit down to create your next communication, consider whether you want to scare employees into good behavior or inspire them.

On creation

What we design designs us back.

How we design a room, a building or a city affect how we behave in that environment. Change the design and you change the behavior. Put another way, if you want to change the behavior, change the design.

The same is true for the policies, training and controls that we create in our organization. How we design them affects how employees behave. To change behavior requires that we change our designs. Culture is an outcome of our processes.

When my organization was revising its Code of Ethics and selecting new values, some were questioning the wisdom of writing aspirational statements that did not reflect our current reality. I would argue that all designs are aspirational. When we are done creating a building, it is only the start of a bigger design, the design of those who will inhabit it. Thus when we create a values-based Code, it is only the start of designing an ethical workforce.

Create today the world you want to see tomorrow.

Hat tip to Jason Silva.