Authentic ethics and compliance training is gaining traction and visibility in the corporate workspace. What does this mean for your company and how can you execute on it?

By Jay Tangney

Companies continue to face increasingly complex operational and regulatory environments in 2018. Regardless of your business, how your employees navigate and decide complex issues will define how your company operates. Simply put, integrity is a “must have” to survive. Without a solid ethical foundation in both the C-suite and throughout operations, the hard reality is that your company is highly likely to fail and perhaps, fail with irreversible and draconian consequences, especially if aggressive and motivated regulatory and enforcement authorities become involved.

One result of this plain business reality is that companies and shareholders are increasing their focus on integrity-based ethical behavior. Civil and criminal investigations and cases have long been a business reality in the United States. Today, a new layer of moral scrutiny has been added as we evaluate fundamentals of respect in the workplace, and diversity and inclusion.

Yes, acting within the letter and spirit of the law and treating each other with respect at all times is the right and moral thing to do, and certainly for many leaders and shareholders that reason alone is enough. For those more financially motivated however, authentic ethical and respectful behavior mitigates risk and makes sense for the bottom line. Ethical behavior is in the best interest of your enterprise, and if you don’t believe that, pick up any major newspaper and review how many companies are immersed in complicated legal investigations because of bad or illegal conduct by employees. Business in America is immersed in redefining what is OK and what is no longer tolerated, and this cleansing, along with a hard push toward diversity and inclusion, is itself the right thing to do and long overdue. This renewed vigor in mandating ethical conduct impacts all industries, and a deliberate and enforceable ethics and compliance training program is a prerequisite for your team and your business to succeed.

Authentic ethics and compliance training is gaining traction and visibility in the corporate workspace. What does this mean for your company and how can you execute on it?

By Jay Tangney

Companies continue to face increasingly complex operational and regulatory environments in 2018. Regardless of your business, how your employees navigate and decide complex issues will define how your company operates. Simply put, integrity is a “must have” to survive. Without a solid ethical foundation in both the C-suite and throughout operations, the hard reality is that your company is highly likely to fail and perhaps, fail with irreversible and draconian consequences, especially if aggressive and motivated regulatory and enforcement authorities become involved.

One result of this plain business reality is that companies and shareholders are increasing their focus on integrity-based ethical behavior. Civil and criminal investigations and cases have long been a business reality in the United States. Today, a new layer of moral scrutiny has been added as we evaluate fundamentals of respect in the workplace, and diversity and inclusion.

Yes, acting within the letter and spirit of the law and treating each other with respect at all times is the right and moral thing to do, and certainly for many leaders and shareholders that reason alone is enough. For those more financially motivated however, authentic ethical and respectful behavior mitigates risk and makes sense for the bottom line. Ethical behavior is in the best interest of your enterprise, and if you don’t believe that, pick up any major newspaper and review how many companies are immersed in complicated legal investigations because of bad or illegal conduct by employees. Business in America is immersed in redefining what is OK and what is no longer tolerated, and this cleansing, along with a hard push toward diversity and inclusion, is itself the right thing to do and long overdue. This renewed vigor in mandating ethical conduct impacts all industries, and a deliberate and enforceable ethics and compliance training program is a prerequisite for your team and your business to succeed.

Revisiting Corporate Ethics — A Broader View

Of course, ethical behavior starts with basic legal compliance. Your business must comply with the law. To achieve this very basic objective, employees need to understand and believe that compliance is important. Without that core belief, bad things happen, including civil lawsuits, criminal investigations, fines, penalties and even prison. To survive, it is fundamental that employees at every level comply with relevant laws and regulations, and that example should emanate from your chief executive and every member of the leadership team.

A well prepared legal and compliance team can ensure your company knows the law, and more importantly, can implement a robust but practical training program that includes the following essentials:

  1. Understanding and complying with laws and regulations that apply to your business.
  2. Understanding and complying with your own internal policies.
  3. Understanding when to call the legal team with questions.

Integrity-based ethical behavior runs deeper than compliance with the law. To thrive, employees should not only understand the fundamentals of legal compliance, but also the principles surrounding integrity-based ethical decision-making. Today more than ever, this deeper dive is necessary, and the responsibility for creating this culture starts with the entire leadership team of your enterprise and cascades down. Your leaders need to be aligned with how people are treated in the workplace, and how complaints and problems will be investigated with objectivity and fairness to all, regardless of pay grade.

As a practical matter, this belief system manifests itself in a few ways:

  1. The commitment to training employees to ensure they are treating each other with dignity and respect at all times.
  2. Understanding that there will be a fair, objective and fact-driven process when problems do occur.
  3. A 100 percent commitment to enforcement of your behavioral expectations. When an employee fails to adhere to your rules, change will occur.

In this advanced consideration of ethical behavior, training is a bit of a misnomer. Treating people with respect and fairness every day is not training, it’s more like breathing in today’s day and age. If your employees are not treating each other well and understanding why that is important, eventually your enterprise will be unable to breath and dysfunction will become your norm.

Determining Your Ethical Reality

To determine what needs to be done, a company, regardless of whether they are large and public or small and private, must understand the status quo of its culture. A hard look in the mirror is often easier said than done. This journey can be even more challenging when the truth about a company’s culture does not meet its own view of itself. It’s hard to hear that you may not be as wonderful as you believe, and it’s tempting to rationalize and explain away information that doesn’t meet your expectations with a variety of convenient excuses. An authentic understanding of your ethical reality is a hard but necessary first step, and this begins with a listening exercise.

Listening to the truth is essential if a company sincerely seeks to implement and eventually enforce changes to behavior, policy and culture. To get to the truth, several questions need to be asked of employees in a safe and trusting environment:

  • How do people treat each other most of the time?
  • Does that treatment change when things aren’t going well?
  • Is there accountability when bad behavior does occur?
  • Are your internal rules and policies applied evenly regardless of time at the company and level of responsibility?

These questions require careful reflection from your leadership team. If a company goes through this process, listens and understands, then fails to credibly act to change, even when those changes are hard and may require saying goodbye to valued employees, the enterprise will be in a far worse place. Your leadership will also face major credibility challenges when it needs it most.

If employees do not understand why treating each other well is important, dysfunction will become your norm.

Once these questions and others are asked by a full cross-section of employees representing all the constituents in your company, sincere listening and acting to implement necessary changes will create credibility as your company moves forward with ethical conduct.

What to Do — A Few Practical Thoughts

To achieve the implementation of this culture and respect-based platform, the legal and learning teams are necessary partners across the company. Those teams should consider how to get to the truth. Surveys, interviews and focus groups are a few examples of methods that can work. Regardless of what you choose, the participants in your study have to feel safe and free to speak the unvarnished truth. Absent those fundamentals, you will not likely understand your reality and the rest of your process could be a waste of time.

The next step is for the team to understand and digest the data from your study to set the path forward on a road to an environment of respect and integrity. This starts with robust and relevant company policies that are enforced fairly and evenly, with the backbone of a thorough, targeted and entertaining training program.

We all know that there is much information to share with employees, many whom are already under siege with email, meetings and other demands on a daily basis. How many times have you heard a negative comment about someone having to sit through another training session on a corporate policy? It’s a regular occurrence. In reality, the only way your training program will actually work is if people want to participate beyond just checking the box. Here are some steps to consider as you reflect on what you need to do:

  1. Define the program’s business requirements.
  2. Align the legal and compliance standards (i.e., document management, code of conduct, anti-harassment).
  3. Identify cross-functional requirements (i.e., travel and expense reporting).
  4. Align policies (i.e., conflict of interest, third party vendor rules, etc.).

Your training program will only work if people want to participate beyond just checking the box.

Once you and your team determine what you want to say to employees, the next step is think about how you will communicate it. Make no mistake, the delivery of the content, which includes who says it and in what medium, is every bit as important as the content itself. With the wrong messenger or the wrong medium, you are done before you even start. Here are several content distribution methods to consider:

  • Live training.
  • Web based interactive training (i.e., podcasts, webinars).
  • Facilitated focus groups.
  • Inside experts.
  • External speakers.

This is where the learning and legal teams need to come together in a focused collaboration to spread the gospel of ethical behavior, and to do so creatively and passionately. It can be extremely time consuming and sometimes costly to find ways to break through the onslaught of information clutter we face daily and drive critical compliance messages home. Doing so is time well spent and will eventually bring tangible results. To get there, you should spend time identifying your best team of messengers. Who in the company has lived through a relevant event? Who has a story to tell?

If, for example, you are focused on rolling out a new code of conduct, find someone articulate who has direct experience with the topic, talk to them, and see if they’d be willing to tell their story. I have been fortunate (or unfortunate) enough to have been involved in many of these events over time, first as military officer and subsequently as both outside counsel and general counsel. In my experience, personal stories told the right way can be compelling and leave a lasting memory because they humanize and bring emotion to what can be an abstract concept. For example, I’ve worked on situations where employees made mistakes, most frequently in good faith without any intent to engage in misconduct, but simply didn’t know the law or the rules. Those types of stories about real people, real problems and real solutions can be compelling, and are far more impactful than a slide deck which cites the law or cases.

Another strong method to getting the word out is with outside speakers. While this has a financial cost, the correct outside speaker can have a dramatic impact on your employee listeners, will bring an objectivity to your topic, and can insert some fresh energy to your training platform with a level of credibility that can be inspiring to employees. Examples of people that can be effective in ethics and integrity include college and business school professors, retired judges, military officers, and sometimes even people who ended up on the wrong side of law enforcement cases and learned the importance of compliance after making mistakes.

Winning Hearts and Minds, Then Measuring Your Progress

Much of this is straightforward, and sophisticated companies generally have some level of programming to show the world they are making an effort to promote integrity based ethical decision-making. Those that don’t sometimes learn the hard way that a proactive measurable compliance program is essential, and may even make a material difference if you are questioned about your commitment to ethical behavior in the event of an investigation.

The United States Federal Sentencing Guidelines provide important guidance to enterprises trying to understand how the Justice Department views this topic, and just how important a provable, objective and measurable program can be should you come under investigative scrutiny. It’s nice to say you believe in ethics and compliance, but can you prove it to a skeptical third party or even a federal prosecutor? Not surprisingly, the truth of your commitment to ethics and compliance will be in your data, which is the work product of your overall program.

One way to objectively demonstrate just how focused and successful your compliance efforts are is to track every topic you train on, every time you do it. This, and asking employees to sign an acknowledgment that they’ve not only been trained but that they understand it, accomplishes important objectives. First, this process shows the scope and cadence of your program by articulating every topic you train on, how frequently you do it, and who received it, from the CEO on down. You will be able to quantify what you’ve done and what you’ve accomplished, which is often challenging in corporate functions deemed to be overhead. Second, this tracking mechanism allows you to demonstrate that any misconduct was not the fault of the company, that the company in fact trained on it, and made its expectations for employee behavior very clear. Importantly, this type of centralized process to capture the details of your program, even in a simple database, can demonstrate to your leadership just how valuable the training program the learning and legal teams implemented is to the overall enterprise. Along the way, you will be showing the value of the training team itself. All of this contributes to a return on the investment made by your shareholders.

A comprehensive and measurable ethics-based compliance program correctly implemented and tracked will accomplish much for your enterprise. The learning and legal team will become an even more credible resource for employees and, as a result, employees will be in contact more frequently for guidance. Along the way, your organization’s commitment to compliance will be clear, tangible and supported by objective data for employees. With that, risk has been mitigated, value has been returned to your firm and most importantly, you have done the right thing.

Jay Tangney is the general counsel for Suffolk. He can be reached at editor@CLOmedia.com