Tag: management

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Compliance and ethics business case studies

Profiles of ethical leadership in sports coaching: Jim Valvano

This is the third in a month-long series of five posts that analyze the ethical leadership of famous sports coaches. The first post was about John Wooden, the beloved UCLA basketball coach and creator of the Pyramid of Success. Last Wednesday’s post focused on Johan Cruyff, the acclaimed Dutch footballer and manager of Ajax, Barcelona, and Catalonia football clubs, and his 14 Rules. Today’s profile will be about Jim Valvano’s perspective on leadership and success as expressed in the famous speech he gave at the ESPY Awards in 1993.

Jim Valvano was a NCAA basketball coach for 19 years, ten of those seasons at North Carolina State. He coached his teams at NC State to many winning seasons, including two tournament championships and two regular season championships, and for several years also served as athletic director there. He was also no stranger to controversy during this time, due to accusations of rules violations involving his players’ academic qualifications and financial activities, which led to substantial administrative pressure, scrutiny, and a variety of investigations. Though these numerous investigations revealed no outright major violations in recruiting or financial practices, Valvano ultimately resigned as athletic director in 1989 and in 1990, negotiated a settlement and resigned as basketball coach as well.

Following this somewhat ignoble end to his coaching career, Valvano worked as a broadcaster and became a motivational speaker. His speeches sometimes covered his version of the controversy at NC State or offered commentary to his audiences on how to handle and get over these unfortunate events and the character and reputational damage they present. This is not an unusual path for high-profile people to take after finding themselves in crises of confidence. Practical ethics are complex and transgressions in these professional dilemmas can lead a person to a moral reckoning and awakening of the true values that matter in life and how to embrace them authentically.

Valvano’s enduring legacy is a speech he made in this exact spirit at the first ESPY Awards in 1993. He was accepting the Arthur Ashe Courage and Humanitarian Award and at this time was in the throes of the glandular cancer which would take his life less than two months later. After announcing his intention to create an charitable foundation dedicated to finding the cure for cancer, he went on to speak emotionally and eloquently about individual success and his views on what made life worthwhile. This powerful perspective on purpose-driven living relied heavily on a definition of true success as inner and personal, not dictated by accolades from others or black-and-white “wins,” but rather a personal sense of accomplishment and completion that required no external justification.

This concept of internal success is important in an understanding of applied ethics and translates powerfully to a vision for individual accountability in a culture of compliance. In this theme, here are five significant statements from Valvano’s legendary speech, with suggestions for how to interpret these powerful insights for individual and organizational values to promote ethics and compliance:

  1. “To me there are three things we should all do every day. We should do this every day of our lives. Number one is laugh… Number two is think… And number three is, you should have your emotions moved to tears, could be happiness or joy… You do that seven days a week, you’re going to have something special.” – A balanced life is a sustainable one. This way, the pleasure of the highs will be memorable, the pain of the lows will fade, and the middle will be where the lessons from both come together for a lasting effect. As Johan Cruyff’s “Total Football” showed in last week’s profile, the only practical approach to life or business is a holistic one, with all factors and outcomes taken into fair contemplation. An even keel is a long-lasting perspective.
  2. “I always have to think about what’s important in life to me… Where you started; where you are; and where you’re going to be. Those are the three things that I try and do every day.” – This expresses a perspective on success that is grounded, measured, and reasonable. Success may be a line, or an arc, or a constellation of peaks and valleys, but the present must always maintain an attachment to the origin as well as to the ambition. This perspective can both humble and motivate individuals and organizations to consider, and be true to, their values.
  3. “It’s so important to know where you are. And I know where I am right now. How do you go from where you are to where you want to be? … I think you have to have an enthusiasm for life. You have to have a dream, a goal. And you have to be willing to work for it.” – Success is equal parts planning and effort. In life as well as in business, if you don’t work for it, it’s not worth having and might not be possible to keep. Professionals should be passionate about and engaged the work that they do and the reasons for which they do it – not a paycheck or external recognition, but as Valvano says, enthusiasm, vision, and commitment. Ethical decision-making is only possible if individuals are purpose-driven and accordingly, so long as they hold themselves accountable to that purpose.
  4. “I urge all of you… to be enthusiastic every day… to keep your dreams alive in spite of problems whatever you have. The ability to be able to work hard for your dreams to come true, to become a reality.” – Adversity is always a great challenge to character ethic. Be it accusations of wrongdoing, confrontation with personal moral failures, opposition and criticism, doubt and uncertainty, or even physical illness and disease, resilience and perseverance are the only remedy. Continuing commitment to core values, even when feeding forward input or external changes and making adjustments is necessary, as is appreciation of the work and effort required to reach goals. With this in mind, genuine inner success is achievable.
  5. “Cancer can take away all my physical ability. It cannot touch my mind; it cannot touch my heart; and it cannot touch my soul. And those three things are going to carry on forever.” – The closing and perhaps most famous and poignant lines of Valvano’s speech, the lesson from Valvano’s conviction to endure despite his illness and physical diminishment is universal to all human endeavors. Dignity, legacy, and respect are not circumstantial and cannot be taken from a person unless freely compromised. This goes to the heart of personal ethics and morality – a person’s own register of right and wrong, internal governor and code should be untouchable and can be relied upon in even the darkest and most uncertain times.

For Valvano’s powerful 1993 ESPY speech, watch it here:

Don’t forget to check back for next Wednesday’s post, which will be about Vince Lombardi, the NFL Hall of Fame coach (and the role model of Jim Valvano, as it happens), and clues about how he saw ethical leadership based on famous statements from his statements to players and motivational speeches. The final post in this series, on November 29, will profile Gregg Popovich, the current coach of the San Antonio Spurs with a progressive view toward people management of his players and political engagement as an expression of leadership.

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Best Practices

Tips for improving employee accountability in compliance programs

The most ambitious culture of compliance paired with the most robust controls framework still cannot succeed without employee adherence. Employees who don’t know the correct thing to do, or those who make an unethical or non-compliant decision despite knowing, can be addressed with awareness communication in the first case or remedial action in the second case.

However, the more frequent and challenging scenario is that employees have received information about compliance risk management priorities and ethical culture at their organization. They understand this information well enough and maybe even admire the aims of the compliance program, but there’s a problem – they don’t see themselves as having an active role in it.

The best efforts of compliance programs will always be overcome by apathetic or unengaged employees who don’t see themselves as having personal compliance responsibilities. In cybersecurity, for example, the best IT systems with the most up-to-date risk controls structure will still be defeated by an employee who falls for a phishing scheme or leaves behind an unsecured laptop in a public place. Some mistakes are unavoidable, of course, just like some risks can only be mitigated or accepted. However, many other errors, acts of misconduct, or risk factors can be prevented with the appropriate individual vigilance and diligence.

So how can a corporate compliance program emphasize to employees that individual responsibility is the fundamental defense in any risk and control framework? Too many solutions from management or consultancy rely heavily on data solutions and systems approaches to addressing compliance risk. The logic goes: failures of existing compliance programs to prevent ever-evolving fraud and misconduct are unfortunately not unusual, so why not simply blame human misjudgment or incompetence for inadequate controls and therefore just automate processes whenever possible?

The above is a cynical and defeatist attitude toward corporate compliance; if management or its advisors decides that corporate compliance will fail, then it certainly will do so. However, removing the obstacles to individual responsibility is an important step to empowering organizational integrity. Outsourcing or digitalizing analysis and advisory work is an artificial, external solution. It may expedite or simplify some aspects of working with compliance risk management, but it cannot ever be as effective as a values-based approach that creates a corporate culture where good judgment and ethical decision-making are incentivized and supported.

Indeed the first, and probably best, solution for raising the standard of compliance programs and their controls is to promote employee engagement in these across all levels of the organization. This starts with individual accountability, which compliance professionals and senior management can nudge employees toward embracing these ways:

  • Walk the walk: Senior management should weave a thread of the corporate cultural values throughout all matters that touch an employee’s working life. This needs to be consistent and visible. Communication should be simple and straightforward, practical and not preachy, but it should express and reinforce the cultural values. In HR matters, for example, transparency should be communicated and modeled. Employees must see the corporate cultural values explicitly expressed as they experience corporate administration across the organization. This brings the values from mere words to a living system in which they are participants.
  • Nudge with timely reminders: Regulatory, legal, and policy requirements change rapidly. Employees that are trained regularly should be respected for what they already know; heavy-handed instruction can be seen as condescending. However, reminders upon key messaging events (anniversaries, completion of investigations, or announcements of strategies) or updates when there are new guidelines or expectations are critical. These reminders can act as nudges toward appropriate behavior for individuals whose attention may have moved on or whose understanding was out of date.
  • Work against culture of fear: People often think about speaking up in the workplace in terms of following an internal escalation process or being a whistleblower. To some people, speaking up by challenging an established procedure or an experienced colleague may seem unprofessional or presumptuous. The possibility of being opposed or facing retribution can be very scary for employees who might want to express uncertainty or ask questions. Corporate compliance programs have a responsibility to create a culture where speaking up routinely is safe and supported. A relationship-based approach to business compliance advisory is a great first step toward combating the fear factor and helping employees to speak up to check understanding or challenge practices. Involved employees are more likely to be accountable ones.
  • Actively address accountability gaps: When it is evident that an employee or group of employees do not embrace accountability in compliance risk management, address it, but not punitively. Open discussion can be mutually beneficial. Take the opportunity to express that individual responsibility is expected, and also to listen to the limitations or uncertainties that may provide an explanation for why it’s missing.
  • Insist on consequences: Disciplinary action is never the intended outcome for any employee-management relationship. Ideally everyone would want to and be able to do the right things all the time, but clearly mistakes and misconduct happen. Good people/bad people dichotomies are classic but not necessarily helpful. In reality, it’s most important to establish from the beginning that consequences for doing the wrong thing exist and will be enforced fairly and meaningfully.

There will always be people in organizations who either are in need of training or resourcing attention (wanting to do the right thing but not being properly equipped) or people who are not cultural fits (wanting to do the wrong thing despite organizational priorities). Engaging these people where possible is critical, just as holding all others accountable for their actions and responsibilities is the frontline defense most important to compliance risk management.

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Compliance and ethics business case studies

Profiles of ethical leadership in sports coaching: Johan Cruyff

This is the second in a month-long series of five posts that discuss successful sports coaches in terms of their ethical leadership qualities. Last Wednesday’s post was about John Wooden, the visionary UCLA basketball coach. Today’s post will focus on Johan Cruyff, the acclaimed Dutch footballer and manager of Ajax, Barcelona, and Catalonia football clubs. Next week, the profile will be about Jim Valvano’s leadership ethic as expressed in the famous speech he gave at the ESPY Awards in 1993, two mere months before he died of cancer. On November 22, the post will be about Vince Lombardi, the NFL Hall of Fame coach, and clues about how he saw ethical leadership based on some of his most famous public statements. The fifth post in this series, on November 29, will study Gregg Popovich, a current NBA coach with a progressive view toward developing his team as both players and people.

Johan Cruyff is widely thought of as one of the greatest football players of all time, having won the Ballon d’Or three times and playing many extremely successful seasons for Ajax (1964-1973) and Barcelona (1973-1978) in club play and the Netherlands (1966-1977) in international play. Cruyff is equally regarded for his impressive achievements as a club manager. His innovations while at the helm of Ajax and Barcelona football clubs laid the generational foundations of coaching philosophy that continue to shape the directions of those teams and their youth academies, as well as those of many others.

To learn more about Cruyff’s life and accomplishments as a player, read this profile from The Guardian published after his death in March 2016.

Cruyff, regarded by many as a technically perfect football player, was able to devote his energy to creative organizational strategies to make the game more cooperative and dynamic. From his perspective, technique went far beyond fundamentals of football that could be learned from rote practice of drills. Rather, real playing ability came from having a fluency and versatility with the game that allowed players to connect to one another and work in an instinctive and flexible system together on the pitch.

Cruyff also receives special mention for his approach to the game that emphasized morality via simplicity of play. While regarding football as a beautiful game, this was not merely based on entertainment value or competitive stakes that might be exciting, but also on efficiency and mental strategy, where the mind’s plan facilitates the body’s actions. This is a powerful consciousness that elevates a deeper existential, internal success over the fleeting external recognition of a win-lose result that was not achieved by a personal commitment to greatness via integrity and discipline.

Cruyff’s strong values toward the game and life are most poignantly embodied in his “14 rules,” which are displayed in each of 200 Cruyff Courts set up in countries all over the world for children to use freely to play football together.   These 14 basic rules are fundamental for all players in football match to follow, but they also provide a guiding philosophy for a values-based approach to life. Applying these as both personal and business management principles allows an individual to seek inner satisfaction and success via connections to and cooperation with others, personal accountability, authenticity, and informed ambition.

Cruyff’s 14 rules, annotated with suggestions for their application to corporate cultural principles in interests of promoting organizational and employee integrity, are as follows:

  1. Team player – To accomplish things, you have to do them together. – True success is achieved by focusing on collaboration and cooperation, not making isolated decisions in disconnected processes.
  2. Responsibility – Take care of things as if they were your own. – Individual ownership of risks and recognition of each person’s role in their management is fundamental to any defense strategy as well as necessary for a genuine culture of compliance at all organizational levels.
  3. Respect – Respect one another. – Businesses must have zero tolerance for non-inclusive or abusive behavior; incidences of it must be addressed seriously and mitigated or prevented from reoccurring when possible.
  4. Integration – Involve others when possible. – Work together to share responsibility – invoking praise when duly earned, and liability when risks are not managed.
  5. Initiative – Dare to try something new. – Foster and contribute to a culture of speaking up and out. Challenge heuristics and routines which can drive unethical decision making and narrow cognitive frameworks.
  6. Coaching – Always help each other within a team. – Regard the organization as an interdependent unit to support an integrated style of decision-making and working.
  7. Personality – Be yourself. – People should maintain their personal code of ethics and sense of right and wrong that they have in life, at work. Good people should not be afraid or unable to do good things.
  8. Social involvement – Interaction is crucial, both in sport and in life. – Be active champions for ethical processes and work together to promote them. Isolation is toxic to collective integrity.
  9. Technique – Know the basics. – Have or get the information needed to remain in constructive compliance with rules, regulations, and laws. Stay up to date or in front of them.
  10. Tactics – Know what to do. – Have a strategy that is flexible but driven by defined values and a thoughtful understanding of risks. Prepare work based on a plan and in agreed terms.
  11. Development – Sport strengthens body and soul. – Stay up to date or in front of the guidelines that form the controls framework. Feed-forward ideas, letting future productivity benefit from past performance.
  12. Learning – Try to learn something new every day. – Be open to and informed about different perspectives and opportunities. Seek knowledge and evaluate strategy based on it, not based on what is easy or fast.
  13. Play together – An essential part of any game. – Share values and manage risks by working together. Don’t be solicited for advice or seek an opinion; have an evolving and ongoing relationship.
  14. Creativity – Bring beauty to the sport. – Be passionate and on the lookout for novel approaches that will provide elegant solutions to dilemmas.

Cruyff’s 14 rules are about so much more than football or sport. These rules are succinct, relatable suggestions for how to live a moral life in harmony with others and in pursuit of self-sustaining accomplishments. This emphasis on values drives intellectual curiosity, physical effort, mental development, and individual accountability. These powerful principles promote integrity in all areas of life and work.

To learn more about Johan Cruyff and his undeniable legacy in football and leadership, check out this Football’s Greatest feature on him:

Also, make sure to read next Wednesday’s post, when this series continues on to look at Jim Valvano, a famed NCAA basketball coach and, later, broadcaster and motivational speaker, and his legendary speech at the first ESPY Awards in 1993 which makes a powerful, simple statement on integrity and internal success.

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Best Practices

GRC for compliance professionals

Compliance as a function is sometimes subject to varying definitions. Across different companies, industries, and cultures, organizational perspectives on the purpose and scope of a compliance program can vary. Some see compliance as an alternative to or close relation of the legal department, while others position it much more independently, perhaps as an intermediary between the business lines and audit. Still others may see compliance as the depository for risk-based support activities that do not otherwise fall cleanly into any other established unit.

As previously discussed on this blog, and as this blog will continue to ensure to express, the autonomy and visibility of compliance is integral to the integrity and sustainability of an organization’s employees and business strategy. Compliance blends a rules-based approach with a values-based approach to reconcile ethical expectations with legal obligations and technical requirements.

Professionals who work with interpreting legal and regulatory guidance and implementing these into business practices will likely recognize the acronym “GRC.” GRC stands for governance, risk management, and compliance. This umbrella term integrates these functions to describe the operational activities undertaken by an organization to execute plans, manage risk, and encourage integrity.

The GRC model refers to process themes, not necessarily functional units of an organization. Indeed, the three themes of GRC may be included in operational tasks and across numerous independent departments, including HR, finance, IT, audit, and at the board level, in addition to the obvious areas such as risk, legal, and compliance.

GRC can be seen as a discipline that seeks to coordinate the flow of information and ownership of risk so that the activities and processes it encompasses are effectively and efficiently incorporated. As organizations become bigger, this discipline becomes all the more important for keeping channels of communication open and clear, both up and down silos as well as across business areas.

Ethical decision-making thrives in an integrated system where objectives are clearly expressed and information-sharing is transparent and relied-upon.   Elevating a coordinated GRC discipline can foster a communication regimen in an organization where reasonableness and feedback rather than heuristics and routine dominate. Equity and integrity can thrive if actions are taken openly and cooperatively rather than in isolation.

In the ever-changing regulatory landscape of modern business, it is so important that an organization’s GRC activities be coordinated so that work is not duplicated or wasted and gaps are filled rather than passed over with tunnel vision. These functions share stakeholders and objectives, and therefore should share information to maximize meaningful impact and minimize redundant effort.

The basic concepts of the GRC approach are all useful for a compliance officer or other professional to consider:

  • Governance: This refers to the management control framework used by an organization’s senior leadership, relying on management information from across the organization in order to direct and control the overall strategy and operation of an organization. This concerns major existential questions for the organization, such as – what are the roles of leaders at all levels? What are the reporting mechanisms and what checks and balances exist for these? How does business strategy translate into directions to various business units and how are these instructions communicated to employees? Having an informed perspective on the organization’s governance objectives is very important for a compliance officer because this gives insight to the tone at the top and the mechanism through which these critical values become concrete practices.
  • Risk management: Risk management is the identification, assessment, and response to risk factors which may have an impact on an organization’s activities. This also includes considering risks which do not have an impact and ascertaining that this evaluation remains correct and current as fluid business objectives and conditions may change. All organizations are subject to some risks, such as operational risk, technological risk, and financial risk, while others may be determined by the industry in which they operate, such as market risk, liquidity risk, political risk, third-party risk, and product-specific risks. Risk management entails planning and implementing controls in order to address these risks, either by mitigating them, changing strategy or practice to eliminate them, accepting them, or transferring them to a service provider or partner who is positioned to best respond to them. Legal, legislative, and regulatory risks are of particular interest to compliance officers, as are compliance-centric risks such as reputational risk. Compliance officers should take risk identification and assessment well into account when planning compliance program objectives so that these can be fine-tuned to the emergent and most important needs the business faces in this area.
  • Compliance: Of course, staying in good standing with supervisory authorities and ensuring that business practices and procedures meet standards and requirements set by external laws and regulations as well as internal policies and procedures, ensures that the work done in governance and risk management activities is properly directed and sufficiently supported. An on-going assessment and prioritization of the compliance program’s effectiveness and appropriateness is necessary to ensure that the controls in place are up-to-date and working as intended.

The themes above are all germane to the objectives of a compliance program and can be referred to in seeking buy-in from senior management or supervisory board members, with whom ultimate responsibility for establishing and executing these systemic processes rests.

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Compliance and ethics business case studies

Profiles of ethical leadership in sports coaching: John Wooden

This is the first in a month-long series of five posts about historically significant sports coaches as exemplary models for ethical leadership values. Today’s post will focus on John Wooden, the legendary UCLA basketball coach. November 8th’s post will analyze the famous “14 rules” of Johan Cruyff as business values to promote organizational and employee integrity. On November 15, the profile will be about Jim Valvano and the inspiring speech he gave at the ESPY Awards only two months before his untimely death in 1993. Vince Lombardi, the NFL Hall of Fame coach, and his insights on the ethics of leadership and performance will be the focus on November 22. Finally, on November 29, a contemporary coach will be the final profile along with the previous leaders from sports history, with the focus on NBA coach Gregg Popovich.

These coaches are all beloved, legendary figures whose importance in society extends far beyond their teams, and for good reason.   Beyond inspiring players and other coaches who develop with them or work alongside them, the ideas coaches share about motivation, personal growth, attitude, and performance can easily translate from the court, pitch, or field to all areas of life.

No discussion of legendary coaches in sports history is complete without mentioning John Wooden, so it is logical to start this inquiry with him. John Wooden was the head basketball coach at the University of California Los Angeles from 1948 until 1975. During that time, he coached the team to ten NCAA national championships in 12 years, seven of those in a row. For his many storied accomplishments at UCLA, Wooden was named coach of the year six times.

Apart from his winning record, Wooden is renowned for his popularity among his former players, many of whom recognized him as having shaped their lives positively. He is well-known for his organizational leadership and insights which have been translated as tips for success in life in general, often relying on simple and straightforward inspirations for positive behavior and attitude. Wooden defined many leadership and performance principles to inspire his players to achieve their best in basketball and life. These were embodied by, for example, his Seven Point Creed, which included being true to yourself, helping others, building relationships, seeking advice, and being thankful, and the Pyramid of Success.

The Pyramid of Success describes 15 blocks which, when considered in performance and strategy, support competitive achievements which can be reached through a values-based approach. These 15 qualities are: (1) industriousness, friendship, loyalty, cooperation, and enthusiasm; (2) self-control, alertness, intitiative, and intentness; (3) condition, skill, and team spirit; (4) poise and confidence; and, culminating in, (5) competitive greatness. These are supported by, on one hand, from bottom to top: ambition, adaptability, resourcefulness, fight, and faith; and on the other hand also from bottom to top: by sincerity, honesty, reliability, integrity, and patience.

This balanced approach demands that any individual hoping to reach competitive greatness must take into consideration the personal qualities and resilience that are required to get there. In this model, quick wins or external satisfaction are not emphasized; instead, building character ethic and cultivating a measured path to the desired achievement.   These values are not special to basketball or sport. They are also not mere business principles. They are a life philosophy and paradigm which an individual can consistently carry though all of his or hers endeavors. The hard work a person devotes to the dual goals of sustaining faith and patience provide the momentum for the culmination in success.

For an interactive look at this, check out the website memoralizing him, which has a section devoted to the Pyramid of Success.

The key takeaway from the Pyramid of Success, and many of Wooden’s finer management and development insights, is that success and winning are not synonyms. A person can reach competitive greatness, the ultimate stage of the Pyramid of Success, but that does not mean the result will be winning every time thereafter. By the same token, an individual game or effort can result in a win, but that does not mean intrinsic success has been achieved in a sustainable, credible way.

In Wooden’s words in his 2001 TED talk (linked below), success is defined as “peace of mind attained only through self-satisfaction in knowing you made the effort to do the best of which you’re capable.” This is not something others can judge or define and does not come from an external performance or perception. This sense of self-accomplishment, win or lose, prevail or fail, can only be reached through hard work, the commitment to which is supported by equal doses of patience and faith.

Watch and read Wooden’s TED talk, “The difference between winning and succeeding,” here.

Having a commitment to this internally-motivated model of success is powerful for determining that the results of one’s effort will be about the integrity with which it was made. Individuals and organizations can inspire a values-based approach to work from this management mechanism. Getting there is the most important part of the process of “being” there. If the emphasis is on winning, competition, profit, attention, and external accolades, then the internal values will be missing to sustain the accomplishment. But, if the emphasis is on growth, hard work, relationships, learning, preparing, and internal satisfaction, then the greatness achieved will last long enough to get the win and keep much more after that.

For a great study of the enduring legacy of John Wooden, check out this Sports Illustrated article by Seth Davis from March 2017.

Also, don’t forget to check back next Wednesday when this series continues on to look at Johan Cruyff, legendary Dutch footballer and manager whose coaching philosophy is credited with revolutionizing the game of football.

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Best Practices

Communication strategies for increasing employee engagement in compliance programs

Every compliance professional’s strategic annual plan will include seeking increased employee engagement in and attention to the organization’s compliance program. Communication strategies must be carefully devised with the goal in mind of making compliance vivid and interesting to employees. The compliance message can quickly become routine and dry: sign an attestation, request pre-approval, complete a checklist. This sort of messaging alienates employees rather than engaging them. They have only a small function in the compliance operations this way. Nothing is learned or shared, they are just doing a “tick the box” type exercise.

Instead, the true aspiration of the compliance messaging is that employees take interest, learn something new, ask questions, and feel connected to the story of the organization’s compliance program. This is accomplished via effective and appealing communication that speaks to all audiences and sets a new, compelling tone.

  • Key moment messaging: Compliance is highly relatable to current events and new stories. Therefore compliance communications should take full advantage of key moment messaging opportunities. Relate communication topics to outside events to make the objectives of the compliance program even more concrete. For example, if there is a major earthquake somewhere in the world and your office is located in Southern California, take that opportunity to engage with employees about disaster recovery and business continuity policies and procedures. Their interest will already be heightened and the necessity of the information will be at its most tangible.
  • Positive reinforcement: Start with a kudos, congratulations, or positive sentiment. Any action that needs to be taken or improvement that needs to be made based upon the communication will be much better received if the message gets off to a welcoming start. Set a productive tone by thanking employees for their participation in the last request or calling out good insights or high engagement. Then build off that encouragement to bring in the next steps needed and issue the call to action.
  • Branding: Branding and marketing are now important considerations across all business lines and functions. Compliance is not immune to this, as messages from so many sources fight among themselves for precious attention and airtime from employees. Therefore compliance professionals must carefully consider branding options that will maintain the substantive content of their communications yet be adequately branded to be appealing. Using humor or a catchy, fun theme to introduce the communication, before getting to the meat of the message, can provoke curiosity and prompt engagement. Don’t take it too far and make it a joke – but a little bit of amusement can go a long way.
  • Give visuals/shortcuts: On a similar note, think about making simple takeaways from the communication, however complex its overall message. One way to do this is to provide a visual, like an example of a new form that has to be filled as standard procedure, or a chart showing results on an initiative over previous periods and projected future results. If a visual is not applicable, try using acronyms or slogans that will work as mnemonics to help people remember your message and keep the meaning in mind.
  • Make it interactive: The best way to engage employees in compliance communications is to concretely incorporate them in it. Make the messages interactive for them. Ask an open-ended question and promote any responses received so that employees know the request for input is credible. Take a poll or offer a quiz. This way, employees can share in the mission and the effort by weighing in themselves, which allows them to personalize the message and be more likely to remember it.

To interest and appeal to all employees, compliance communications should not be generic or routine. Taking advantage of opportunities to make compliance relatable, and capitalizing on human interest or emotional connections that can be made, will help to make the mission of the compliance program much more interesting and effective.

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Compliance in popular culture

The Office and culture of non-compliance

The Office is a very popular US television comedy series, based on a UK series of the same name. It follows the daily lives of the employees working in the Scranton branch office of a paper company. Filmed as a “mockumentary,” to imitate the style of a documentary, the show features many “interviews” with the employees and management. While it does address things in their private lives and personal relationships between the characters, most of the action of the show occurs in the workplace and is based around the dynamic of the characters as colleagues and employees.

In this light, the show offers many interesting insights and tropes about the experiences of working in a small or branch office, with an eccentric boss and idiosyncratic colleagues, dealing with policies from head office and the challenges of working together effectively. Scenarios relevant to compliance are touched upon often in the series, frequently showing examples of very poor management practices or problematic cultural values.

  • “Sexual Harassment” (Season 2, Episode 2): In this episode, the office’s HR personnel are providing sexual harassment refresher training and reviewing policies after an incident at corporate headquarters. Instead of setting a tone at the top to reinforce how important a respectful and safe working environment should be, and how inappropriate harassing behavior of any kind is, the manager Michael Scott has a tantrum and makes light of the importance of the policies. He never embraces his duty as a leader to model positive behavior; even when he defends one of his staff against the rude joke of another, it is accompanied by an improper comment of his own, as he misses the opportunity to step up and reinforce a culture of compliance.

 

  • “WUPHF.com” (Season 7, Episode 9): In the cold open of this episode, the power goes out in the office and the server goes down. Instead of having reliable disaster recovery procedures on hand or a controls framework that would enable business continuity in this sort of situation, the staff must resort to guessing the password as a group. Obviously this is not advisable in light of critical cybersecurity concerns which face all businesses today, especially small offices such as this one which might be assumed to have weaker controls and be targeted by intruders hoping to gain access to the larger company network.

 

Actually, the “WUPHF.com” episode, in its entirety, is another good example of poor compliance practices. Ryan Howard, with Michael’s encouragement and financial backing, claims that he has devised a web-based messaging system called WUPHF.com. In reality, Ryan is committing a fraud, in that the website does not function (despite his attempts to advertise to the contrary) and the only purpose for it is to try to sell off the domain name. Instead of uncovering and disclosing this fraud, and protecting the other investors, Michael backs Ryan. Though he later withdraws his support for Ryan, the fraud is allowed to continue because Michael does not step up and see beyond the conflict of interest posed by his personal relationship with Ryan in order to act on behalf of the investors as he could do.

 

  • Scott’s Tots (Season 6, Episode 12): In surely one of the more cringe-worthy moments for Michael Scott – that’s saying a lot – he fails to keep the promise he made years before to pay college tuition for a group of lower-income children. Upon their high school graduation, he must confess that he has not upheld the duty to them that he created with his promise. Instead, he apologies and tries to give them batteries as a conciliatory gesture. Apart from the terrible awkwardness of the concept itself (this episode aired in December 2009, deep within the global financial crisis, an uncomfortable time to try to address financial fraud humorously), it’s unfortunate, and a sign of weak leadership, that Michael doesn’t seem to acknowledge at all the reliance upon his integrity he created by making that commitment.

 

  • The Incentive (Season 8, Episode 2): In the absence of Michael Scott, his former employee and now new office branch manager Andy Bernard is proving that the apple doesn’t fall far from the tree when it comes to insufficiently ethical leadership. Andy finds himself at a loss for how to motivate his employees and decides to create a points-based incentive system to encourage their performance. Rather than appealing to their values or accepting lower performance in exchange for more sustainable and strategic efforts, Andy chooses a management method which will yield only short-term, temporary improvement or engagement.

From the above it is abundantly clear that The Office does not depict a corporate culture of compliance or a values-based approach to business strategy. Rather, it shows a company that is run, at least in the Scranton branch, with an ethos of non-compliance in the workplace.

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Compliance and ethics business case studies

TravelBird and setting the standard for corporate cultural values

One of the undeniable effects of the trends of globalization and increased demand for customization and specialization that have occurred in both the retail and service industries is that competition is keener than ever. In today’s crowded marketplace, organizations must get creative to set themselves apart and appeal to consumers. From a compliance perspective, of course, the most practical and sustainable way for an organization to do this is to be loud and proud about its integrity and values-based approach to business.

TravelBird, an Amsterdam-based travel agency which operates in 11 European markets, has embraced a disruptive business model and is determined about changing the way customers plan and book their vacations into a holistic experience. Founded in 2010, TravelBird refers to itself as a “scale-up,” a start-up with a strategy of cultivated and plotted growth. Its customer service ambitions are matched by its desire to create a vibrant employee experience and to have a corporate profile which is inspiring and consistent with the image it wishes to project publicly.

Towards accomplishing this goal, TravelBird has recently announced its “cultural values,” a novel spin on the corporate mission statement or business principles. These values as stated by the company are strikingly balanced and represent a thoughtful evaluation of the organizational and employee traits which embody the best alignment with a successful, sustainable business philosophy:

  • Adventurous but Responsible – Take measured business risks, even as leaps of faith, and go boldly into new product and service areas as the customer experience may demand the organization to do so. However, do this with respect for foundations such as legal and regulatory frameworks and the ethical and moral considerations that may be implied. This is the ultimate principle of sustainability that emerging enterprises, especially companies with a basis in technology, forget to make room for in their organizations. An organization which approaches its growth with this orientation is culturally better prepared to offensively weather future storms than one that defensively considers problems for the first time as they occurring.
  • Passionate but Practical – Creative and sales may drive the bottom-line survival, but compliance and other control functions inform the staying power. Design strategic choices and decision-making at the company so that it is consistent with an ambitious business profile and speaks to the passions and excitements of the employees and customers, but don’t forget to do things right from the start.
  • Candid but Compassionate – Honesty is the best policy, but it doesn’t have to be brutal or at the expense of a mature relationship-based way of doing business. Commercial relationships can be very remote and it’s easy to forget there are people on both sides of every interaction. It is important to treat each other with integrity but to also have a high standard for performance and behavior.

Customers and employees alike are highly motivated by companies that model admirable cultural conduct. Blending corporate ambition and conscience, strategy and cultural responsibility, is a powerful approach to growing and cultivating a business. Companies looking to develop directed corporate cultures should aspire to lead with this kind of message and engage in these values authentically and continually.

For TravelBird’s announcement on their cultural values: check out their LinkedIn.

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Best Practices

Key compliance culture values for promoting employee integrity

Employee integrity is the cornerstone value for establishing organizational integrity, and therefore for the success of any compliance program. As fundamental as employee integrity is, it is also complex, elusive, and affected by a huge array of factors and influences. Perceptions and biases can defeat individual intentions for ethical behavior. External forces on the decision-making process and the impact of management in a complicated organizational structure and business world can defeat incentives for integrity and honesty.

What can a compliance program do to address the need for employee integrity in a world which presents so many obstacles and hindrances to developing and maintaining this trait? Compliance professionals should be the organizational standard bearers for encouraging good people to do good things and limiting access of the occasional bad people to do bad things. This message can be very simple and should focus on reinforcing positive perceptions of corporate values and leadership expectations so that employees aspire to model their own character within this.

  • Openness: Transparency and honest, active communication are crucial to the success of a compliance program. Employees must see that openness of communication and transparent reporting and sharing are highly valued. Open communication is directly linked to reduction of reputational risk and perceptions of greater honesty. Establishing a culture where employees feel it is encouraged or expected to speak up and speak out requires management to be meaningfully open, accessible, and relatable. In an environment where employees feel that all behavior and performance can be discussed openly, they will also be aware that it will all be noticed, and therefore will feel positive pressure to meet best expectations for integrity.
  • Clarity: Clarity of expectations and perceptions is essential for a culture of integrity. As with all objectives for compliance culture at an organization, norms and values must be clear and consistent across all employee populations. Communicating different or confusing messages, or giving information that impacts everyone to only some and leaving others out to hear it indirectly, is disastrous for imbedding ethical traits in an organization. Clarity promotes understanding and discussion, both of which are necessary for employees to take up the cultural objectives of the organization as their own.
  • Leadership: Tone at the top is just the first step. Leadership should be encouraged as a professional competency at all levels in the organizations, so that advocacy for the compliance culture can take root everywhere. Employees need to see leaders speaking up about the importance of integrity, but they individually also need to feel they are in the position to speak up themselves, and will be looked upon as vested with responsibility for their own integrity and choices in everyday ethical dilemmas.
  • Trust: Trust is the most simple factor for encouraging integrity in organizations, and indeed in all interactions and relationships, and it is also one of the most difficult and fraught qualities to meaningfully establish and maintain. Trust is constantly threatened and questioned. It cannot be given automatically and still have meaning, but it must be given confidently and with expectation that it will be received in return. Investments in mutual trust cannot be forced or demanded. The pain of having colleagues or managers who are not trustworthy can cause deep damage in teams and organizations and impede individual development. The only solution to this is to see trust as a reward and an ongoing evaluation, and to embrace frank and open dialogs which can help to resolve prior mistrust and discourage future violations.
  • Engagement: Engagement discussions usually focus on employees, but the quest for achieving it starts with management. Employees should see that management follows up, takes integrity seriously by individually espousing all the values, responds visibly to problems and complaints, and confronts issues boldly and confidently. Management engagement in the compliance culture should embrace professional skepticism and pursue public accountability. When employees see this, then they are empowered in turn to engage with their direct managers, peers, and direct reports to have discussions about integrity matters and to demonstrate all the traits that support ethical decision-making.

Modelling the key values of a compliance culture to create strong organizational drivers for integrity should be the focus of the conduct objectives of every compliance program. The fundamental message should be that performance and behavior linked to demonstrating integrity will be encouraged and appreciated.

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Compliance and ethics business case studies

THINX, Miki Agrawal, and the immature leadership of a visionary entrepreneur

THINX was founded by Miki Agrawal with the ambition of disrupting the feminine hygiene industry. The company makes underwear specially designed to be worn by women on their menstrual periods. In line with this female-centered product and its revolutionary approach to a timeless need, THINX has a mission to re-center the public discussion about periods and women’s bodies. The company has become known for its provocative, bold advertising campaigns on the internet and in the New York City subway.

However, the company has also become known for something less progressive: allegations that its founder-CEO Agrawal created a hostile work environment with inappropriate behaviour and insufficient management controls.

THINX started with the objective to normalize the way people talk about periods, making it no longer a taboo topic. This societal change is an admirable goal, but at THINX it was undermined by an immature compliance culture that perverted this openness into permissiveness for mistreatment and poor conduct. It may be a positive societal change to open and encourage dialogs about feminine hygiene practices and women’s bodies, but the standards for treatment of others and respect for people’s personal boundaries, everywhere in life but especially in the work place, should not be subverted in interests of promoting this message. Empowering women does not stop at the office door, especially in a company with this ambition as its supposed core value.

Agrawal, who has successfully started several businesses, has not been so successful in taking a professional approach to ongoing operations at those organizations. Her ideas and approaches to entrepreneurship may be disruptive in a good way – novel, unique, bold – but her management style appears disruptive in a bad way – immature, overly casual, confrontational. Personal conduct and character ethic should distinguish the profile of a CEO, not tarnish it. A true leader should focus his or her philosophy into appropriate behaviour and interactions with employees and a tone at the top of professional integrity.

Despite Agrawal’s own behaviour that crossed the line, she could have made up for her managerial shortcomings by placing people around her whose leadership could contribute to a more acceptable corporate tone for the employees while still servicing the cultural change Agrawal wanted to encourage in the world at large. Adequate management controls such as a formal, experienced HR department and written employee policies and procedures would have helped to set a standard towards which the company could mature.

THINX replaced Agrawal as CEO with Maria Molland Selby, a more traditional leader who was worked in a variety of established companies included Thomas Reuters and Dow Jones. Selby also is a passionate about the THINX product from a personal perspective, hopefully she can value the people working at THINX as individuals by treating them positively and focus on a corporate culture that will support the company’s goals of destigmatizing feminine and changing the product market to make it better. As for Agrawal, she has rebranded herself as a SHE-eo and a disrupt-“her,” indicating that her interest is really on focusing on her perceived positive accomplishments and the future, rather than learning from the criticisms of the past, which she perceives as obstacles or tests rather than self-created challenges or failures to mature.

For more detail on THINX and Miki Agrawal, read Noreen Malone’s story on The Cut.