Practical insights for compliance and ethics professionals and commentary on the intersection of compliance and culture.

Insights from psychology for compliance officers

An informed approach to business compliance can be improved by taking theoretical insights from different fields.  For example, a corporate culture which seeks to promote ethical leadership, or provide support for making choices from a basis of integrity, or encourage employee engagement with compliance values, should take lessons from a variety of sources to make relevant and relatable appeals.

Psychology in particular has many affinities with a profession that is focused on culture and values, both of organizations and of the individuals within them.  Study of psychology in search of insights relevant to compliance ethics can be used in creating our culture, informing our norms, and helping us to develop and articulate our values.  All of these insights are necessary for cultivating a compliance culture and professionals in the compliance and ethics function have to be the first ambassadors for this.  To do this effectively, psychology can provide important guidance.

Abraham Maslow – Psychologist Abraham Maslow was best known for creating his eponymous “hierarchy of needs,” which is a psychological theory of mental wellness determined by the priority in which needs are fulfilled in order for individuals to progress from subsistence survival to the ultimate stage of self-actualization. Maslow’s hierarchy of needs was first expressed in his 1943 paper “A Theory of Human Motivation,” which was published in the journal Psychological Review.  It can be applied in the organizational context as well, as companies attempt to succeed, grow, and change, and encounter difficulties with sustainability and identity throughout this process.  At the bottom of the hierarchy are the most fundamental needs, which for humans are physiological and safety needs which dominate their behavior, but for organizations could be business survival and basic market access.  At the top is self-actualization and self-transcendence, which for humans and organizations alike relates to the desire of realizing full potential, mastery of all previous needs, and giving the self over to a higher goal within community and society.  Check out this interview with Abraham Maslow on self-actualization from 1968:

  • Viktor Frankl – As a Holocaust survivor, neurologist and psychiatrist Viktor Frankl brought a personal perspective to the field of existential analysis in which he was a pioneer. Based on his experiences while interred in concentration camps, his famous book Man’s Search for Meaning posits that the purpose of life is to find and pursue meaning in all forms of existence, including suffering and struggle.  A sense of purpose and meaning is the source of existential motivation, and drives a direct path to inner success and ethical achievement based on character ethic and personal commitment.  For more from Frankl himself, check out this video from a 1972 lecture he gave at Toronto Youth Corps on the human search for meaning:

  • Barry Schwartz – Unlike Maslow and Frankl, who are legendary psychologists who were active in the early and mid 20th century, Barry Schwartz is an American psychologist who is a frequent contemporary commentator and speaker. Schwartz’s work is often focused on morality and ethical choices, and therefore he is particularly relevant to compliance and ethics for decision-making and choice architectures in organizations.  Of particular interest is Schwartz’s concept of choice overload, expressed in his book The Paradox of Choice.  Schwartz argues that reducing choice offered, while still respecting individual liberty and autonomy, could benefit individuals psychologically by reducing the anxiety and other burdens of having too many choices (“choice overload”).  With fewer choices to make, individuals can focus instead on goals and considering their respective importance in order to determine how directly the available choices contribute to their goals.  This approach dovetails neatly with libertarian paternalism and nudge theory (which will be covered in a future post on behavioral economics and were also discussed in this post about the work of Dan Ariely), useful for creating controls frameworks and compliance culture values in organizations.  Check out this TED talk from Barry Schwartz on the unintended psychological consequences of having too much freedom of choice:

  • Sheena Iyengar – Sheena Iyengar is a social psychologist and an expert on the choices people make. Her work on judgment and decision-making is far-ranging, with the focus of her work on the psychology of choice and how individuals perceive, make, and respond to the choices they make and those of others that impact them.  As encouraging decision-making from a basis of integrity and providing adequate support and resources for ethical choices is a major components of any corporate compliance initiative, Iyengar’s work on positioning choices as expressions of values and identity is hugely helpful.  Check back on March 23 for another post on Iyengar and her many talks about the meaning of choice and design of decision-making.  In the meantime, here’s a preview from Iyengar’s Knowledge at Wharton presentation on the power of choice:

  • Malcolm Gladwell – Malcolm Gladwell is a very well-known journalist and author who has published articles in The New Yorker since the mid-1990s as well written several of his own very popular books on topics like sociology, psychology, and social psychology. Gladwell’s writing has broad applications throughout the social sciences and is often appreciated for the interesting anecdotes and insights from research that he collects and presents in a digestible and interesting fashion.  Blink, Gladwell’s second book, which was published in 2005, focuses on decision-making and how humans use instinct, heuristics, or bias to make informed choices very quickly.  Blink introduces the concept of “thin-slicing,” which is a method of making a quick choice that will be just as effective as a time-consuming, highly-considered one.  In Gladwell’s view, too much information is just as dangerous as not enough information, and filtering via thin-slicing can help to narrow options and speed up making a neutral decision.  For more from Gladwell on thin-slicing, check out this talk on the dark side of judgment based on intuition and quick impressions:

This post was the first in a series of four on insights for compliance officers from different fields of study.  Check back next Tuesday, on February 27, for a post about insights from self-development and coaching – with more from Stephen R. Covey as well as others such as Brene Brown.  On March 6, the post will be about insights from behavioral economics – including an overview of the works of Dan Ariely, Richard Thaler, and Daniel Kahneman among others.  Finally, on March 13, the last post in this series will discuss insights from management theory, with commentary on authors such as Simon Sinek and Daniel Pink.

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