Transparency as a multiplier

I have visited the facilities of Ben & Jerry’s in Vermont and Heineken in Amsterdam. Both offer a tour that shows you how the product is made, and they give you a taste at the end (actually, Heineken gives you a taste in the middle and at the end). I’m convinced that the ice cream and the beer taste a little bit better because of the tour.

What these companies don’t offer is a tour that shows you how decisions are made. Imagine if we could see how Heineken compensates their farmers, or how Ben & Jerry’s treats their employees. Assuming they do it fairly, their product might taste even better (even though it’s a placebo effect).

Few companies show you how they make ethical decisions. In fact, few companies are transparent even with their employees. To me, that’s a missed opportunity. An employee who is proud of their leadership is more likely to go the extra mile.

Speed and transparency

If the reports are true, this is what happened in just a few days at NBC Universal: a subordinate of the CEO complained of an inappropriate relationship with him, the company investigated, and the CEO apologized and stepped down.

Things rarely move this fast and so transparently. But speed and transparency are necessary if you want your employees to believe your dedication to live by your stated values.

How would a similar situation be handled at your company?

Accountability

Supreme Court Justice Roberts has just been “invited” to testify before the Judiciary Committee.

This speaks to the accountability of individuals in positions of power. While the circumstances surrounding Justice Roberts’ testimony are unique to the legal and political sphere, there are important lessons that can be applied in a corporate setting.

One key takeaway is the importance of transparency and accountability in decision-making processes. In a corporate setting, leaders must be willing to answer questions and be held accountable for their actions. This means being open and honest with stakeholders, including shareholders, employees, and customers, about the reasoning behind important decisions. I’ve written about this here.

Another lesson is the need for a robust ethics program that includes regular training and guidance for employees. This program should outline the company’s values and principles and provide clear guidelines for behavior. Additionally, a culture of ethical behavior should be fostered and encouraged from the top down, with leaders setting the example for the rest of the organization. If the big boss accepts expensive gifts from suppliers, what message does it send to the rest of the organization?

Finally, the importance of an independent oversight body cannot be overstated. In the case of the Supreme Court, the Judiciary Committee provides a check on the actions of the court and its justices. In a corporate setting, this could take the form of an independent board of directors or a separate ethics committee. Such a body can provide impartial oversight and ensure that ethical lapses are identified and addressed in a timely manner.

Overall, the news of Justice Roberts’ testimony underscores the importance of accountability, transparency, and ethical behavior in positions of power. These lessons are equally applicable in a corporate setting and should serve as a reminder to companies to prioritize these values in their decision-making processes.

Share your decision-making process

A business leader recently asked me how she could increase her trustworthiness with her employees. Her business has had a difficult time in the last 18 months, which has forced her to make difficult decisions, and she now can feel a divide growing between her and her team.

My advice: put in writing how you make your decisions, and share it with your team.

Sharing your decision-making process increases transparency, which in turn increases trust. Putting that process in writing can only be done if you are clear about what drove your decision, and your clarity will transfer to your team (even if they disagree with the outcome). Once documented and shared, your decision not only becomes a reference for the future, it becomes open to attacks, something most leaders dread. However, this level of vulnerability is essential to building trust.

Most leaders understand that their job is to make decisions. Too few understand the importance of sharing how they make them.

Choosing between two “rights”

Ukraine is facing criticism today because of its suspected use of petal mines near Russian positions.

Ukraine has been invaded and it has a right to defend itself. It probably feels that it has an obligation to defend its citizens by all means necessary, including using landmines that it promised not to use 25 years ago by treaty. Ukraine is facing a difficult choice: protect its citizens’ lives or uphold a treaty. It’s a difficult choice because Ukraine has to choose between two “rights”. It’s much easier to choose between right and wrong.

Which leads me to ethics training in the corporate world (remember, this is a business ethics blog, not a geopolitical one). Most off-the-shelf training use scenarios where employees must choose between obviously right and wrong solutions: “Should John look the other way when Mike skips a critical safety test on the assembly line, or should he report it?” This type of training might create some awareness but it doesn’t do much in terms of critical thinking.

Surely your company faced a difficult decision in the last few months. It was probably one where the “right thing to do” would impact one stakeholder favorably and another one unfavorably. Why not have leadership share with employees how they made the call? What arguments and consequences did they consider? Why did they land with one course of action over another? This type of transparency generates trust.

And consider using that scenario (or a similar one) in your training. By asking employees to make and justify their own call, you will sharpen their skills for the next tough decision.

Documenting and FAQs

Ethics and compliance officers often share with me their struggle to communicate about the E&C program. “How many different ways can I tell them about our code of conduct, our policies and our training?”, they ask.

Two ways are often overlooked:

Documenting: Let’s say you are in the process of revising an existing policy. Share that with your employees. Tell them you are launching the revision process and why. Later, tell them how you partnered with HR to get feedback on the first draft. Once approved, share the questions that leadership asked before approving the policy. You can do that with any project you are working on. Documenting gives you a chance to stay in front of your employees, to tell a story (that’s how people truly learn), and to add transparency to your work (transparency promotes trust).
FAQs: If you don’t have a big project to document, then consider writing FAQs. You can easily write FAQs about your code, about each of your policies, about your training, investigations, controls, etc. All you have to do is collect the questions you get from employees and organize them. Once you have 3 or more on a given topic, you can publish the FAQ.

Of course, you can also document your creation of FAQs!

Transparency or corruption

I have written before about the corruption risks related to major sporting events like The Olympic Games and The World Cup. Whenever billions of dollars converge on a single event, corruption risks are high.

There is an unusual event these days that is also attracting billions of dollars: the pandemic. Governments all over the world are spending billions every month trying to contain the virus and finding a vaccine. One way to mitigate related corruption risks is to clearly see how these billions are spent.

To that end, the US Congress passed a law earlier this year creating a database that was intended to track all COVID-related monies spent by the US government and to protect taxpayers. However, the current administration found a loophole and awarded $6B of vaccine contracts to a single company without taxpayer protections.

The US government is indicting more companies than ever under the “books and records” provisions of the FCPA (and for good reasons). So why is the same government not following its own advice and being transparent about how it is spending public funds?

Twitter and trust

When Facebook was found, again, to have improperly shared the personal information of millions of its users last year, it had to be dragged in front of the US Congress to explain itself. Facebook said that “mistakes were made” and that “they should have done better.” Somehow, that left me feeling that they weren’t really sorry about the angst caused, and perhaps that they had done it on purpose.

When 130 Twitter accounts were compromised last week, Twitter soon issued a statement stating “We’re embarrassed, we’re disappointed, and more than anything, we’re sorry. We know that we must work to regain your trust, and we will support all efforts to bring the perpetrators to justice. We hope that our openness and transparency throughout this process, and the steps and work we will take to safeguard against other attacks in the future, will be the start of making this right.”

Twitter’s statement alone restored my trust. It made be believe that they were truly caught off guard, that they originally had defenses in place that they believed would protect its users, and that they will not rest until the problem is fixed.

When trust is broken, we can make two types of statements. One that will build trust, or one that will further destroy it.

Three questions

“Can we do it?”

That’s the compliance question. If the answer is yes, there’s a second question.

“Should we do it?”

That’s the ethics question. If the answer is yes, there’s a third question.

“How should we do it?”

That’s the culture question. Different ways of doing something lead to different cultural outcomes.

Where the rule of law is strong, people have recognized the importance of the first question. Where transparency is present, people have learned to ask the second question. And in a world where the means of production are becoming accessible to all, the third question will soon break any organization that ignores it.

AI ethics for business – Part 1

I recently joined a small group of E&C professionals who decided to complete the free online course on AI Ethics for Business, offered by Seattle University.

We agreed to complete a module or two every week and to share our insights. Here are some of my insights from Module 1:

Every organization engaged in developing AI should identify the principles and values that will guide their efforts. So far, it seems that only large technology companies or professional associations have published their principles. But with regulators now starting to weigh in, organizations should accelerate their work.
From Google to Microsoft to the IEEE, the principles articulated are all based on similar values. My favorite value when it comes to AI ethics is transparency. If we can clearly and completely articulate what the autonomous system is doing for the human, and how, we can address many of the current and future concerns around AI.
People face ethical dilemmas all the time and they come up with excuses to avoid resolving them. A common excuse, which I find particularly relevant to AI ethics in business, is “hurry”, or the pressure that most employees feel to deliver products and services quickly. People want to be seen as efficient, as meeting goals, as contributing to the overall success of the company. But we all know that pressure is a key element of fraud, which, in the case of AI, can lead to disastrous effects.

To read more about this topic and about my colleagues’ insights, please visit this thread on LinkedIn.