Tone at the top: A useless cliché or a call to action?

There are certain expressions we hear so often that we are tempted to just tune them out.  One of these is the importance of tone at the top.  We’ve all heard it.  But what does it really mean, and more importantly, how do we translate it from empty words into something real?

There is a saying that “what you do speaks so loudly that I cannot hear what you say.” Here is one approach on tone at the top that completely misses this point. The Chief Ethics and Compliance Officer (CECO) or one of the staff writes a memo for the CEO to sign that swears a mighty oath of support for the code of conduct.  At the end of this memo the last line says “call Jamie Smith if you have any questions about the code.”  All the employees know Janie is in the compliance office. They are also smart enough to know that Jamie wrote it.  (I sure knew this when I was a 20-year corporate employee).  They also know the CEO was not giving this a lot of thought – it was just one of the many items that had to be signed that day. 

Donna Boehme, known as the “Lion of Compliance,” put this succinctly.  “Tone at the top is not talk at the top.”   So what are some actions a senior manager, especially including the CEO, can take if they want a tone at the top that genuinely encourages ethical conduct and compliance with the law?

1. Training.  Sure, if you need a canned intro from the CEO, have it.  But try this.  The managers grudgingly amble into the room for the code of conduct training.  (They have their phones with them so they can do their important work during the training.)  Wait, who is that sitting in the second row?  It’s the company’s CEO!  He is taking notes from what the CECO is saying.  He raises his hand and asks a question about the code. He does not have a phone out.  He is not taking messages. He is attending, participating and learning.  No attendee in that room has their phone on.
2. The helpline. Post that helpline poster. Print the number on a coffee coaster. But when the CEO is addressing all the senior managers, he happens to mention that he had a question about the code this week, and he called the helpline to better understand how the code applied to a particular aspect of their sales program. That story will spread among the employees.
3. Incentives and compensation. In the planning for this year’s incentive system, the CEO stops the meeting and asks where the CECO is. HR never thought of inviting her.  The CEO says, let’s get her in here.  I want to be sure our code of conduct matters to our employees and our people actually perform in ways that promote the code.
4. C&E on the board. The CEO drops info the CECO’s office.  There is a new opening on the board.  The CEO asks the CECO for some names of other CECOs in her network who would be good board prospects.  The board needs another independent director, and he wants someone who will champion the need for a solid C&E program, and understand the issues identified by the CECO when she addresses the board.
5. Safety review. The safety team is doing its walk through to ensure the plant facility is safe and meeting all the guidelines. There with a clipboard is the CEO, walking with the team.  He talks with individual workers about what they have seen. He compares what he sees to the government safety requirements as well as the company’s workplace safety program.
6. The executive team reports. At this month’s executive team meeting the CEO goes around the table and asks each executive the question he had told them before he would be asking today.  What did each one do this month to promote the code of conduct and create the right tone at the top in their business unit. How did they support their business unit’s compliance and ethics champion?
7. Coffee. The CEO invites the CECO to have coffee with her in the company café.  They are joined by the chair of the audit committee.  They discuss the progress of the C&E program (where everyone can see the three of them together.).
8. Speaking up. Linda has felt on edge ever since she reported a boss who was padding expenses on a government contract.  She didn’t want to be a snitch, but she knew that was wrong and could get the company in trouble.  Her phone shows a call from a company number she does not recognize.  She taps on it, and she hears a voice she has only heard on a company video.  It is the CEO.  His message is simple: “Thanks, Linda.  I know it took courage for you to speak up, but you really did us a great favor.  Cheating the government could cost us an entire line of business if we got debarred, and it is not how we ever do business.  I wanted you to know that your actions represent the best traditions in our company.  If anyone ever bothers you about this, just text me at this number.  And thanks again.”
9. Procurement. The head of procurement is attending the executive team meeting. It is just before lunch, and everyone is getting a bit antsy.  But the CEO asks the procurement head how the work with the CECO is proceeding on helping their smaller suppliers to adopt compliance programs.  “Are we sharing our experiences and approaches with them?”  The procurement person reminds everyone that they used to do just a tik-box exercise where they told everyone they had to follow our code, and everyone ignored it.  Now our suppliers look to us as a helpful resource. It has even improved our relationship with them. Their compliance people know our compliance folks, and realize how fundamental it is to us to be doing the right thing.   

Remember this too.  Some day your company may be under investigation by a government agency.  They will talk with your people.  They may ask your people about your compliance program.  What happens if your people say, “oh they sent this code thing around. My manager made me sign it without reading it.  That’s all I remember about it.”  Not good.  But people remember stories, and the underground network lives on stories.  If the stories are about the CEO doing real world things that reflect the company’s values, people will remember when it really matters. 

You may wonder about these stories. In addition to my 20 years inhouse, I also spent years working with C&E people in reviewing programs.  To this day I remember a discussion with regular employees at a client’s production facility.  They are the ones who told me about their president walking with the safety people with his clipboard personally checking out the safety precautions.  In that company this meant more than any slogans could.  They knew what counted because they saw what their CEO did.  

I also remember a story from the days when some colleagues and I created the online training company, Integrity Interactive.  One of our people got a call from the executive assistant of a company CEO about required ethics training.  She wanted to be sure he got the credit for the ethics training.  He hadn’t actually taken it, but she said he knew all that stuff and should just get it checked off.  Fortunately our person said he could not do that.  Cheating by the CEO on the ethics training?  Want to guess what the tone was at the top of that company? 

Ask your people.  The stories matter. When the CEO actually walks the talk in everyday terms, people know. When it is mere empty talk they know that too.  There are many day-to-day practical things any leader can do if they want to create a tone at the top that says, “do the right thing.”