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Too many boards and executive leadership teams are in the habit of treating ethics as a check-the-box component of compliance. But today, leaders need to be accountable for all behaviors in an organizations – not just the financial results.
FEI Daily spoke with Bob Conlin, President and CEO of NAVEX Global on how to protect their employees and the problem with harassment training.
FEI Daily: What is problematic about looking at ethics as a part of compliance?
Bob Conlin: One of the areas where this would be problematic is when ethics is looked at as a check-the-box type of thing, as opposed to something that needs to be continually monitored. Ethics is a derivative of culture. Culture is like a marriage. You need to work on it affirmatively, on a continual basis in order to keep it from falling into disrepair or disarray.
Problems happen when companies look at risk and ethics and compliance as check-the-box activities that they are doing because some regulatory body requires them to do it, rather than part of an overall cultural initiative.
FEI Daily: What do organizations need to do to adequately protect their employees?
Conlin: What organizations need to do, obviously, is to demonstrate, number one, that they take these accusations seriously and they're going to investigate them thoroughly. Number two, they need to look inwardly and ask: Are we doing the right thing as a company to create a culture of ethics where these types of behaviors are not swept under the rug.
And if the answer to that is 'No' then you’ve got to put in practices and some policies that will drive the culture forward. Ethics and compliance and culture aren't things that come out of training and policies and one-time CEO documents that go out to all employees. They are things that have to be practiced every day.
It’s so important for the executive team and everybody who is responsible for managing employees in an organization to walk the walk and talk the talk.
One of the most effective things, and it's a difficult thing to do, is to take a very public action and exit those players out. That can be very difficult if the person is an important executive or a very productive manager. But that demonstrates to the organization that you're taking this seriously, that you're not willing to look the other way because somebody's a top performer.
FEI Daily: What can organizations do to prevent harassment in the first place and to create a culture where it's safe to speak up?
Conlin: Number one, it starts from the top and I'm talking top-top. I think the CEO and the Board of Directors need to make this a part of their quarterly discussions.
Typically, if there is compliance, there's a board member who maybe has responsibility for compliance. That compliance is typically around risk and staying out of the way of regulators. That's an important part of what they do. But they also need to be looking more at the culture of the organization. What are the core values of the organization today? What are some of the values that they should aspire to in the future? What's the path to get there?
Are we doing employee engagement surveys? What are we leaning from those employee engagements? Anonymous engagement surveys can allow employees to really open up and share with management and with the board what's going on behind the scenes.
They also need to put in place some of the things that are required by the compliance regulators and those are things like having anonymous hotlines or some method for employees to bring these issues forward without fear of retaliation.
And then going beyond just having a hotline or a whistleblower hotline, but actually advertising it. Putting together awareness programs or monthly updates reminding employees why you have those and what they’re for and that you value the input from employees, and promise to treat all allegations.
Then, of course, you have to have policies that document what you expect as appropriate behavior in the workplace. That behavior should be defined as behavior with your customers and your vendors, but also behavior internally among employees.
FEI Daily: What do you think of harassment training?
Conlin: One the big issues with harassment training is that people look at it as a once a year exercise they have to do. Maybe it's an hour long. It's something to get out of the way. Instead, training should be ongoing. We call them 'micro-learnings' or ‘burst learnings' that are four or five minutes long, sent out to their mobile devices, demonstrating what appropriate behavior looks like and what inappropriate behavior looks like.
FEI Daily: What are some takeaways for financial executives in particular?
Conlin: When you look at these ethics issues that are coming up, and compliance issues in general, CFOs are constantly looking at managing expenses. Very often, if the tone from the top is this is a check-the-box item, then CFOs are going to look for the cheapest possible solution to get them that check-in-the-box. If that's the approach, that there's already a mistake.
If the tone from the top truly is we take culture, ethics, compliance, and our core values seriously, then they're going to be putting in the systems and the processes and make sure that they can maximize the value of the time and effort that they put into it.
Also, if you have a workplace culture that is toxic or growing toxic, that puts your people at risk. That's going to bring you a lot of risk associated with employment law issues. Those things flow to the bottom line. So CEOs and boards and CFOs are always concerned with top line growth and bottom line growth. I think recognizing that these issues affect both top line and bottom line will bring a lot more focus to these important areas.