On retaliation

Stories like the one of Ren Zhiqiang always remind me of the importance of a non-retaliation policy in an organization.

Granted, Ren didn’t have to compare Xi Jingpin to a naked clown. But even if he had not done so, chances are he would have ended up with a similar sentence anyway. Given his age, it’s likely to be a life sentence.

The fear of retaliation helps a culprit maintain the status quo. It is the best tool to prevent people from speaking up. When employees are not willing to speak up, it is nearly impossible to maintain a robust compliance program and an ethical corporate culture. For the ethics & compliance professional, the fear of retaliation is Public Enemy #1.

Is it safe to report wrongdoing?

I recently returned from the latest ECI Fellows meeting, which focused on behavioral ethics. This post is part of a series where I share my insights and lessons from the meeting.


According to a 2018 report from the Association of Certified Fraud Examiners, 40% of workplace wrongdoing is identified through tips provided by employees. No other form of identification comes close (internal audit, IT controls, surveillance, etc.).

This is noteworthy for at least two reasons, both related. First, this high percentage is achieved despite a strong fear of retaliation by employees (reports of retaliation doubled between 2013 and 2017). Second, we can unleash even more reporting if we invest in our speak-up culture rather than in our controls.

Companies should make sure they have an anonymous reporting channel and a non-retaliation policy in place. Beyond these program elements, they should focus on creating a culture where people don’t feel pressured to compromise standards and feel safe when reporting concerns (i.e. don’t fear retaliation). If done well, I would like to think that 80% of wrongdoing could be identified by employee reporting (and the rest by controls).

How can you start down that path today? Identify a business pressure and tell your employees you do not expect them to compromise their standards to overcome this pressure. Then – and this is key – ask them how they intend to meet their goals despite this pressure. They won’t believe you truly want them to do things the right way until they truly believe you care about how things get done. Once that belief is set, they will feel safe to report wrongdoing and won’t fear retaliation for doing so.

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.

Love the process

I’m not going to be happy just when I finally buy the New York Jets. I’m happy now trying to buy the NY Jets. You have to love the process.

Gary Vaynerchuk

Ethics and compliance professionals aim for specific outcomes. We strive to reduce the pressure that employees feel to engage in wrongdoing, to reduce the number of instances employees notice wrongdoing around them, to increase their levels of reporting when they do see wrongdoing, and to decrease instances of retaliation when they report wrongdoing.

We engage in specific actions to reach these outcomes. We seek to draft simple policies, to create effective training, to communicate clear expectations, to investigate swiftly, and to discipline fairly.

As with all in life, we have more control over our actions than we do over our desired outcomes. Thus the key to a happy work life for an E&C professional is to love the process, to do each task as well as we can, in the present. If we devote ourselves to this art, we should get the outcomes we seek. If we don’t, we’ve been handed a learning putting us back on the path to mastery.

Disrupting ethics and compliance

We all know what Airbnb, Uber, Zappos and others did to disrupt their industries: they attacked the worst part of the customer experience.

If ethics & compliance was an industry, and employees were the customers, what part of the customer experience should we disrupt? Here are a few ideas:

  • Long policies written in legalese that no one wants to read or can easily understand
  • Risk-based training that doesn’t help anyone to do their day-to-day tasks.
  • A lack of transparency during and after investigations
  • Double standards when imposing discipline
  • Tolerance of retaliation

This list overwhelming and yet not comprehensive. Now is the time for this young profession to realize it is heading in the wrong direction. Changing course is easier to do today than it will be tomorrow.

And it will be less disruptive.

Thoughts from the ECI Best Practices Forum

I spent the last two days in Dallas for the Ethics & Compliance Initiative (ECI) Fall Best Practices Forum. The topic was “Building a Respectful Workplace.”

I walked away with many concepts and ideas to explore. Here are a few:

  • Employees used to protest (strike) only for better wages and benefits. Now, they take to the streets to decry what their employers tolerate in the workplace (e.g. Google, McDonald’s, etc.). How much internal dialog took place before this boiled over? Did the companies listen? Did the companies feel they could just ignore the complaints? How should companies change to address these concerns before they spill into the public realm?
  • When asked what type of misconduct they observed in the last 12 months, employees consistently place abusive behavior in the top 3 list. So why don’t we ever see this risk on an ERM mitigation plan?
  • The more powerful the perpetrator of wrongdoing, the more likely s/he is to retaliate against the person reporting the behavior. Do we have a process in place to monitor retaliation by executives?
  • Incivility in the workplace increases misconduct. Diversity in the workplace increases civility. Can we thus argue that diversity reduces misconduct?
  • When you strongly disagree with someone, adopt a position of curiosity.
  • Our fear of conflict leads us to agree with the majority. What can we do to make people feel safe in holding a different opinion? What is the point of diversity if no one is willing to speak up?
  • Take this test to find out your implicit associations about race, gender, sexual orientation, and other topics: https://implicit.harvard.edu/implicit/
  • The science shows that the psychopath “top performers” are actually not helping the organization reach its performance goals.
  • Every company has some leverage over a segment of society. Why not use it for good?
  • “A solution should not cost more than the problem.” Is this a valid argument only when you put your shareholders at the top of the list?
  • When having a difficult conversation, separate the people from the problem. Be soft on the people and hard on the problem.
  • When asking questions, decide if they are in service of the other or of you.

We are in the business of changing behavior

Many E&C professionals struggle to answer the question “How do you measure the effectiveness of your program?”

The research conducted by the Ethics & Compliance Initiative (ECI) offers a simple answer: use employee surveys to measure the following four outcomes of any program:

  • Whether employees feel pressure to engage in misconduct
  • Whether employees have observed misconduct by others
  • Whether employees are willing to report misconduct
  • Whether employees fear retaliation for reporting misconduct

You can use the same outcomes to measure the effectiveness of one aspect of your program. Say you want to measure the effectiveness of your E&C training. You can measure these outcomes before and after your training. If the scores go up, your training was effective. If the scores don’t change, your employees might be smarter but their behavior hasn’t changed, which means your culture hasn’t changed, which means your training wasn’t effective.

We are in the business of changing behavior, and there is a science to it.

Culture assessment and risk mitigation

In 2007, the Ethics & Compliance Initiative (ECI) demonstrated that there are two drivers reducing risks in organizations: a robust compliance program and an ethical culture.

The ECI research found that you need both drivers to effectively reduce risks; that it is more effective to start with building a compliance program; and that once you have a robust program in place, the effects of an ethical culture on reducing risks are greater than the effects of the compliance program.

These findings, especially the last one, should be considered when creating or deploying employee surveys. Many organizations with robust compliance programs are asking survey questions that focus solely on the program and ignore the state of the culture. These organizations are missing an opportunity to improve their culture and to significantly reduce their risks.

These two drivers (programs and culture) produce four positive outcomes. Good survey questions will measure these outcomes and, at the same time, the culture. The outcomes are:

  • Fewer people observing misconduct
  • More people willing to report observed misconduct
  • Fewer people feeling pressured to commit a misconduct
  • Fewer people perceiving retaliation as a result of reporting misconduct

Every organization should be measuring its program and culture. And for those with robust programs, a focus on culture, in these times, is sorely needed.

On investigations

One of the best ways to show your employees that we care about them is to take action when they report improper behavior.

When thing go badly in the workplace, a robust investigative process and timely feedback can make a huge difference for the reporter.

No matter how long an employee works for us, they will vividly remember the time they reported wrongdoing and the ensuing investigation. It will stand as one of the most emotional moments of their career. Their courage to speak up should be rewarded with a thorough investigation and protection from retaliation.

Preventing harassment: involve the supervisors

Ten years ago, I led a team of about 100 ethics & compliance officers for a large multinational. Whenever one of them reported that “things were quiet” (i.e. they weren’t receiving allegations of wrongdoing to investigate), I would tell them to get invited to various staff meetings and to provide a short training on conflict of interests. This simple exercise was guaranteed to generate work.

In today’s climate, I would advise them to provide a short training on respect in the workplace. To cover issues related to bullying, discrimination, harassment and retaliation. That ought to generate work as well. And I would recommend one additional feature: make sure the group leader is involved in the training. Having her speak up on the importance of treating each other with respect will get employees to think about the culture of the organization as well. They’ll have a better sense for what’s acceptable and what’s not.

Of course, the goal is to create a culture where harassment doesn’t take place. But, at a minimum, we should want a culture where employees feel comfortable reporting harassment when it happens. The first place they’ll look to for comfort is at their immediate chain of command.