For immediate release: “In our company today we faced a very important decision on whether to pursue a business strategy that involved unethical conduct and was also illegal. Although there were some employees who thought the short-term gain was worth the risk, the strategy was voted down by the employees in an impressive vote of 19,148 against and 2862 for the illegal conduct. We are so gratified that our compliance and ethics program was successful in turning the tide.”
When is the last time you saw anything like this? Ridiculous, yes? So why do I post this story? Because in our field there do appear to be those who think that compliance is solely about convincing the majority of your employees that they should do the right thing. Under this approach, if you conduct surveys and people respond the right way, then you have metrics that prove your program is effective. Good news! 87% of your employees oppose doing wrong.
But there is a fundamental flaw in this concept. Companies and other organizations are not ruled by plebiscite. And they may be held responsible for what any employee does wrong in conducting business for the organization. So if there are 100,000 employees, and every day 99,998 do the right thing and obey every law, but on one day two employees conduct a scheme to break the law, it is the company that committed the violation. Remember too, that in a company where an amazingly high 87% support doing the right thing, that means 13% do not. If you have 10,000 employees, for example, that gives you 1300 who would do the wrong things. Your company is responsible for every one of them.
That is why merely having a “be ethical” campaign or relying merely on nudges, or taking an entirely positive approach to compliance, is dangerous. The pattern of corporate crime and misconduct is that violations do not occur by majority vote. It is typically individuals in the organization, often the ones with power, who engage in misconduct that then tars the entire organization. This is not to say that corporate crime is just about rogues. The organization sets the environment and culture that may be a breeding ground for misconduct. For example, failure to protect whistleblowers creates an environment where wrongdoers can get away with violations because everyone is afraid to speak up. The company certainly can and does play a role in what the individual employees do.
What is the message then? Without doubt, it is important to use the positive elements. Use behavioral approaches such as nudges where they can be used intelligently. Use behavioral science to affect employee behavior. Do polls and surveys to measure the environment. Use rewards wherever you can.
But you also have to remember that there are sociopaths who do not distinguish right from wrong. There are opportunists who will use whatever means they think they can get away with to pursue their goals. In other words, your organization’s employees run the full range of human nature, good and bad. This is an especially important insight regarding the upper ranks of your organization where the most power is concentrated, and the greatest risk of misconduct resides.
Reach out to your people using the tools that work best in your environment. Use persuasion where it works, and command and control where those tougher techniques are necessary. Measure and test whatever you are doing. Apply the wise list of management tools listed in the Sentencing Guidelines. Do all of this with your eyes wide open. We need to base everything we do in reality, and not in wishful thinking. Convince the majority as best you can, but always remain realistic and alert.