Two sides to each conflict

What should you do if your spouse gets a job offer from a competitor of your employer?

Most people know they should report the potential conflict of interests to their ethics office. And most ethics officers will work with you and your colleagues in creating processes that will avoid actual conflicts and leaks from your organization.

But what about your spouse and the competitor? What is your and your organization’s responsibility? That is a step often overlooked by ethics officers. In some circumstances, it might be reasonable, even advisable, to ask the spouse to inform the competitor of the apparent conflict. In other cases, the ethics officer might even call the competitor’s ethics office to discuss the matter.

Think of it this way: we ask employees to disclose conflicts to their organization in part because if something goes wrong later on, it will look suspicious if the conflict was not disclosed, even if the conflict had no bearing on the thing going wrong. Similarly, we need to consider how our organization will be perceived if something goes wrong and we made no attempt to let the competitor know that we knew of the potential conflict, even if the conflict had no bearing on the thing going wrong.

To some, this might feel like overreaching. To me, it’s a reasonable additional layer of protection for all involved.

Mental toughness

Many studies have found that the most successful people are not the ones with the most intelligence or talent, but the ones with with the highest levels of mental toughness. Mental toughness, it turns out, is a skill that can be built by a series of small but regular wins.

So let’s say you want to become a more ethical leader. You start by defining what that means to you. It might be leading a training session on conflict of interests instead of letting HR do it. It might be sharing an ethical decision that you made in the company’s monthly newsletter. It might be recognizing an employee who made a good call as part of your weekly all-hands meeting. Whatever it is, the key is to find something easy, something that doesn’t require motivation, and to do it consistently. As you accumulate these small wins, you will assume the identity of an ethical leader. Once you truly think of yourself as an ethical leader, you will be emboldened and move from small wins to big ones.

What small win can you commit to for next week, and every week thereafter?

Self-preservation

People are asking if Biden’s administration will prosecute Trump after he leaves the office.

Answers include:

  • This is for the Department of Justice to decide and Biden will not interfere
  • It would be very unusual (in fact, it’s never been done before)
  • It might not be good for democracy
  • It could distract from the real work that needs to be done
  • It’s better to make sure that whatever Trump did cannot be done again
  • A new president should look forward, not backward
  • It’s a political time bomb
  • It could divide the country

Yes. All valid points.

But one basic, more personal reason seems to be missing: whoever first allows prosecution against his predecessor opens himself up to such prosecution.

A classic conflict of interest. Like the employee who riled against managers’ inflated bonuses until he became a manager, and then those bonuses were just fine and actually deserved.

Let’s go for a walk

We’ve all been in the office of a professional and felt intimidated and rushed. Whether it was a doctor or a lawyer or an accountant, we felt mildly stupid and taking too much of their time. Often it wasn’t something they said; it was simply all the diplomas on the walls and the big words they used and the speed of their speech.

Let’s make sure that we don’t make employees feel the same way when they seek our help as ethics & compliance professionals. For example, they should not feel bad about the fact that we can spot from a mile away a conflict of interest that is invisible to them, or that they didn’t know how to make a “noisy exit” during the inappropriate sales discussion at the trade show.

I once had a mentor who always took time to listen to me. Whenever I was facing a difficult situation and needed advice, he’d say “Let’s go for a walk”. Such comforting words! I knew I would get all the time needed, all the attention necessary.

Perhaps we can’t go on a walk with every employee seeking help. But we can make them feel seen and heard. Sometimes, that’s all they want.

Title of Nobility

Most conflict of interests policies seek to avoid two things: (1) actual conflicts and (2) situations that give even the appearance of a conflict.

The Title of Nobility Clause of the US Constitution (often referred to as the Emoluments Clause) is not as specific. Essentially, it simply states that a person holding office, like the President, should not accept anything of value from a foreign official without permission from Congress.

There is nothing in this clause addressing the appearance of impropriety. Nevertheless, early Presidents understood the importance of appearances and frequently gave away to the Department of State gifts that they received from foreign officials, rather than ask permission to keep the gifts for themselves.

Today, the current President is considering hosting the G7 meeting (a multi-million dollar affair) at a property he owns. Several people are trying to determine if this would constitute a breach of the Emoluments Clause. They are focusing on the letter of the law rather than on its spirit. Meanwhile, a 12-year old could tell you that it doesn’t look right.

Why not simply hold the G7 elsewhere?

Would they pay a bribe to work for you?

As I read Michael Volklov’s excellent summary of the college admission scandal, I wondered if any employee had ever bribed their way into my company.

Seems crazy? Ask yourself these questions: Has anyone ever lied on their resume to get a job with you (padding their educational or professional experience)? Has anyone ever improperly used a relationship they have with an existing employee to get through the door (a classic conflict of interest)? If your organization is large enough, the answer is probably yes.

So while it’s unlikely that any of your current managers would accept a bribe in exchange for a job, it’s not impossible. And it’s worthy of a fun 5-minute exercise during your next management meeting.

Put the odds in your favor

People tease me about my interest in poker. Is an ethics professional allowed to gamble?

My favorite poker game is Texas Hold’em. I like it because it’s mostly a game of skill, with the element of chance greatly reduced.

When you play enough poker, you start thinking about odds in other areas of your life, like when I see an employee misbehave at work.  Let me explain and give you a simple example.

You are playing Texas Hold’em and your hole cards are of the same suit, say hearts. The flop reveals one more heart, and the turn is a heart as well. All you need is one more heart on the river to make your flush, which we’ll assume would be the winning hand.

What are your odds of getting that heart? Well, you know that there are 9 hearts left somewhere in the 46 cards that are still face down (either in the deck or face down in front of the other players). So you have about a 1 in 5 chance that the next card will be a heart.

Should you bet? Well, that depends on the size of the bet and the size of the pot. If you must bet $1 and the pot has $10 in it, it’s a good bet. Why? Because if you played that hand 5 times, you would lose $1 four times and win $10 one time. Over the long run, this is a winning move.

Conversely, if you had to bet $10 into a $40 pot, it would be a bad bet.

So what does this have to do with bad behavior at work?

Well, take the employee who steals $50 from the petty cash box at the reception desk. In some way, he is betting his $50,000 salary that he won’t get caught stealing $50. What he is essentially doing is betting $50,000 into a $50 pot. As we’ve seen, this is a good bet only if his odds of getting caught are lower than 1000/1. Given the financial controls around petty cash, the workplace cameras, other employees walking by, it’s clearly not a good bet.

We’ve all heard of the small-time thieves making this common mistake, impulsively robbing a convenience store with a sign on the door warning them of camera surveillance and that the cash register never contains more than $200. On the other hand, professional criminals make much better bets, going for big rewards after careful planning.

We see employees (and politicians, and celebrities, etc.) make these bad bets all the time. Harassment, discrimination, conflicts of interest – you name it. They bet their reputation and future earnings on small pots when the odds are against them.

Don’t get me wrong. I’m not suggesting that employees should carefully plan bigger scams. What I’m saying is that an employee’s odds of getting away with wrongdoing in the modern corporation are very low. Too low to bet their future earnings and reputation.

We all have so much good to give, why not stack the odds in our favor?

Q&As add more value per minute

Today, I will be hosting a Q&A call on the topic of internal investigations for my team of ethics & compliance officers (ECOs).

One of my colleagues, a retired FBI special agent, will be answering most of the questions. We have no agenda and no slides. We haven’t prepared in the slightest way, if you discount the 60+ years of experience we have between the two of us.

The idea of hosting Q&A sessions came to me after years of delivering formal presentations. I noticed that my favorite part of a one-hour presentation was the Q&A in the last 2 to 5 minutes. I loved the engagement and I felt, no, I knew, that I was adding real value. Eventually, I decided to allocate at least a third of any presentation to Q&As, no matter how much time I was given to present. Even when I took one hour of questions, I seemed to run out of time and employees would approach me afterwards for more.

So it wasn’t a big stretch to create Q&A-only sessions. I have hosted several on conflict of interests and investigations, and will soon offer other topics. The beauty of these sessions is that I don’t have to guess what’s on my team’s mind. They will ask us questions that really matter to them. We will add value no matter what. It’s a great feeling.

Any leader can easily hold these sessions. Choose a topic your employees care about. For example, you can hold a session for employees who joined your organization less than 3 months ago. Based on their questions, you’ll be able to identify ways to improve your onboarding process. Or you can do something a bit more challenging and hold a session about bullying or sexual harassment.

The density of value-add in Q&A sessions is worth a leader’s time. Give it a try.

COIs: Common & Complex

Today I am hosting a call during which I will be discussing conflict of interest (COIs) situations with my team.

COIs are very common in organizations. Every employee is likely to face one. Some employees fall in love with a colleague, some need a second employment, others might have a financial interest in a customer or received a gift from a supplier.

Being common doesn’t make COIs easier to resolve. While there are similarities between COIs, each is unique to the persons involved. It might be fine for Employee A to receive a gift from Supplier B, and completely inappropriate for Employee C to receive the same gift from the same supplier. My standard response to an employee who calls me and asks “Do you have 5 minutes for a quick COI check?” is “Do you have 30?” I know from experience that I will need to ask her several questions and consider not only the likelihood of a true conflict but also even the appearance thereof. Both should be avoided.

So naturally, E&C professionals find it difficult to resolve COIs. The best way to get better at it is to do it often. Which is why I am hosting this call. Over 160 of my team members have signed up. Our plan is to repeat this exercise every month.


What’s another topic that keeps ECOs awake at night? Let me know in the comments below. Thank you!

Al Capone and cover-ups

The American gangster Al Capone was convicted of income tax evasion today in 1931.

One could say that it wasn’t his original crimes that put him behind bars but his attempt to cover them up.

Many employees follow this pattern. They break a rule and try to get away with it by breaking another. That cover-up usually gets them terminated.

An interesting difference between Capone and our employees (there are many, of course) is in the comparative seriousness of the original violation and of the cover-up. For Capone, it was almost comical that he was sentenced to 11 years for tax evasion rather than for life for corruption, racketeering and murder. For our employees, it is often sad that they get terminated for covering up a minor conflict of interest or mistake, one they could have easily survived had they simply admitted to it.

Our policies, training and communications should aim not only to prevent mistakes and violations but also to prevent cover-ups. Cover-ups only make things worse.

Unless you are Capone.