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

Corporate cultural change: Tone and conduct at the top

This is the first in a series of five posts suggesting best practices for implementing corporate cultural change.  For an overview of all the tips on this subject, check out this preview post.  Today’s post will discuss tone and conduct at the top.  Next Monday’s post, on March 5, will be about enforcement.  The third post in the series, on March 12, will discuss effective policies.  The fourth post, on March 19, will focus on procedures to complement those policies.  Finally, on March 27, the fifth and final post will provide insights about innovative approaches to take employee and organizational education beyond the basics of routine training.

Building on the momentum created in 2017 by the brave and bold disclosures of the Silence Breakers, the #MeToo movement, and the #TimesUp initiative, in 2018 it is more timely and important than ever to throw major weight behind the need for disclosure, self-analysis, and change within organizations in all industries.  The focus on individuals – both in protecting those who have spoken up, enabling others to speak out, and keeping people safe in the future, and in properly punishing those who abused and harmed others as well as deterring further misconduct – must continue.

However, for true progress in this cultural movement for change to continue, the course of the challenge must also give way to emphasizing the responsibility of organizations and systems to do better.  These institutional systems (as discussed in this post about the U.S. Olympic Committee and the swimming team program underneath it) hold significant responsibility for not stopping, identifying, or properly taking action against abusers and the organizational power structures that allowed their malfeasance to continue unchecked.

Organizations and their compliance programs have to take the lead in addressing the cultural and systemic deficiencies that have protected or even supported people who have committed discrimination, harassment, and abuse, rather than acting against them and helping those in a position to be harmed.  While the devil is in the details for the concrete systemic change that needs to occur, executive boards and senior management must lead the way with their statements and actions in order to help the change take root at all levels.

The following are principles which are necessary from a compliance perspective to actively instill an appropriate and progressive tone at the top and conduct to meaningfully match it:

  • Communicate tone at the top – As corporate social responsibility (CSR) initiatives and organizational political engagement vividly demonstrate, the public face of corporations can make a big impact in communities and society at large.  Corporations and institutions can play very visible roles in the public discussion and must be responsible for rejecting silence or ambivalence and instead being loud about where they stand and the values with which they identify.  For more on CSR programs as expression of organizational purpose, check out this post.
  • Demonstrate conduct at the top – As important as tone at the top is, it must be made concrete by being followed up with consistent and decisive action.  Key moment messaging and making statements that reflect cultural and behavioral expectations within the organization and the community are really important.  However, these words must have meaningful action behind them – not just tone but also conduct to back it up.  Organizational leadership must be ground zero for containing developments that are cultural and organizational threats, as well as the incubator for substantive action toward disclosure and change in support of justice and responsibility.
  • Invest in resources – Executive boards and senior management need to put their money where their mouth is.  To match the tone of seriousness about progress and doing better to confront past wrongdoing and prevent or call out future problems, leaders must commit adequate resources.   Companies and institutions can’t be too busy with commercial objectives, or too distracted by internal political agendas, to stop what they are doing to make sure that corporate cultural change gets the attention it deserves.  Whether it is money to be spent on personnel and programs to support additional controls, or reprioritization of business strategy to put work on corporate change out in front, organizations must put promoting integrity, justice, and reform at the top of their planning and get to real work on it with the concrete financial and management support of leadership.
  • Make values concrete – Customers, stakeholders, partners, and the general public have a right to know where the organizations they engage with stand on the issues that matter to them.  Likewise, employees should be able to commit to the guiding principles of the organizations where they work, not just to do a job, but to be part of a shared mission and objective that they all can get behind.  These choices are part of individual and organizational integrity, and they must be set clearly by the explicit commitments of leadership.  For more on the role of mission statements in creating organizational compliance cultures, check out this post.
  • Engage in radical transparency – Organizations need to help set a new standard for honesty and truthfulness, no matter the stakes.  A major component of the disappointment with organizations from the recent disclosures has been how many times people within companies and groups protected abusers or prevented survivors from reporting or coming forward.  In order to commit to a new way of working, organizations have to also commit to being transparent even when it hurts.  Self-criticism and reporting designed to expose and work past wrongdoing, rather than hide and ignore it, will be critical to continuing progress.

Check back next week, Monday March 5, for the second post in this series of five, which will focus on how compliance and ethics professionals can contribute to consistent and visible enforcement for organizational integrity and justice.

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