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Ethics and Compliance Trends for 2022

Manager Training, ESG Narratives, and Adult Learning Research Accountability

The last 12 months have been a steady drumbeat of bad news and chronic challenge for everyone, including ethics and compliance professionals. But as we look to the year to come, there are finally some signs that things might be starting to improve.

Taking a quick glance at the predictions for 2022, it’s easy to despair. It seemed like every headline was about the challenges of the current environment, whether from the Omicron wave, the great resignation, continuing supply chain woes, or something else. It’s easy to understand why business leaders and employees feel more stressed and overburdened than ever. But I’m going to cast a hopeful note as we look forward to a new year that will – someday soon, I am sure – feel like something other than a continuation of the one before (and the one before that). While we can’t foresee every storm, as the last 20 months have shown us, there are pragmatic solutions we can embrace to make the waves a little less overwhelming.

Three trends for our community of E&C leaders to focus on for 2022 are: manager preparedness, the opportunity to frame the ESG narrative, and the insights from adult learning research that can make our efforts to educate employees more effective.

More effective manager training

We expect a lot from managers these days. They are key influencers of company culture and the most likely people to receive reports of misconduct. They’re responsible for fostering a “speak up” culture where direct reports feel comfortable identifying and reporting misconduct and asking questions—without the fear of reprisal. How can managers send the right message to the right people to ensure this happens?

One key trend I’ve seen over the last 20 months, and one that will carry over into 2022, is to focus carefully on how to efficiently reach folks with the messages you need them to receive. The best way to do that is understand who is already being listened to and why. Similarly, also consider the “triangle of messaging”: your message, your messenger, and the modality.

What message are you trying to communicate? Who is the most effective messenger? The best E&C programs vary the messenger based on the message. Some messages have to come from the CEO, but there are many where it’s much better coming from a manager, because employees are going to pay more attention to that. Equally important, the manager is going to know what’s happening in their part of the business. If managers are given the autonomy to do so, they can tweak messaging so that it will resonate for their employees.

Let’s take gifts and entertainment. It’s a perennial compliance challenge for a lot of organizations to make sure that people aren’t giving or receiving things that they shouldn’t be giving or receiving. Compliance officers can create a manager toolkit with bullet points of the message they want conveyed (e.g., why gifts and entertainment can be risks, why you can get us in a bad situation if you do this wrong). Include the points employees need to know and have managers use examples that will resonate best for their part of the business—the golf club event scenario may not work for everyone, so maybe it’s a meal at the gastropub or tickets to a football game.

Counterbalancing that is the fact that we are asking more of managers than ever before. How do we as compliance professionals acknowledge the burden being placed on managers and still ask them to do the things that we need them to do?

Start with “why”: Here’s why you matter. Here’s what the data tells us about why you matter. We know you’re overwhelmed, so we’ll try to make this as easy for you as possible.

Companies also need to follow up with managers more. Ask what tools or methods they used; what worked or didn’t work? Whether it’s a six-month check-in or an end-of-the-year check-in, if you take the time and trouble to create tools for managers, follow up and figure out if anybody is using it and to what effect.

Framing the ESG Narrative

Companies can think of the wave of interest in ESG as an opportunity to create a narrative that helps define their organization’s reason for being. The reality is that everybody has their own definition of ESG. Companies have a chance, if they’re willing to take it, to seize a little control of the narrative. ESG is really about being a well-run company that thinks about the sustainability of the business in the long term.

Identify your corporate purpose: What makes your company profitable? What problem are you solving? And what does that say about the way you impact your broader community? Instead of simply checking boxes in “E,” “S,” and “G,” in a report, really say, “This is our version of ESG,” because it’s going to be a little different for everybody.

For instance, not every company is going to have a water element to control. Accenture’s carbon footprint is going to be very different than US Steel’s carbon footprint. Accenture’s ESG report, for example, includes work they’re doing to educate clients about environmental impact and carbon footprint, trying to travel less, and those type of elements. And once you’ve defined that vision, check to see whether all of your stakeholders are accessing it. If you share statistics on your ethics and compliance program in your reporting—as 30 percent of our dataset is doing now—make sure your employees are also accessing that information in order to get the greatest impact on their perceptions of the program and of organizational justice at your entity.

If you start with the purpose piece of your ESG, it incorporates elements of the organization into your analysis that you wouldn’t necessarily consider. It’s not just an Investor Relations exercise; ESG becomes an animating principle because you’ve tied it effectively to your purpose. Define who you are as a company, what matters to you as a business, and how you think holistically about how that supports your ESG narrative. That’s you telling your story.

Using Adult Learning Research

There is an enormous opportunity to incorporate adult learning teachings into ethics and compliance training and communications.

Companies can tailor messaging to reach a varied audience using research on how we learn. For example, we know that adult learners want to be actively involved in creating and evaluating their learning and prefer to learn practical information that they can apply right away. So, developing just-in-time principles for training will increase efficacy and compliance.

Circling back to our first point, which is how central the manager is, it’s important to think about what that manager needs to help train employees. It might be six or eight months after a manager attends new manager training before somebody raises a concern, or there’s an investigation in their part of the company. By then, they don’t remember how long it takes to do an investigation or who they go to for what. If there’s a quick reminder resource that you can give them, it makes their life a lot easier.

Ethics and compliance training is not one-size-fits-all. A core piece of the compliance function is making sure that people understand what’s expected of them. How do we help organizations understand that there’s a better way to do this? There are so many more systems and just-in-time trainings now in place that people can use. For instance, tie your gifts an entertainment training and per diem allowances to somebody buying a plane ticket: “You just bought a ticket to Russia: Here’s our clean laptop policy. Remember you have to get your Visa. Here’s a quick reminder course on our anti-corruption commitment and our gifts and entertainment policy.”

I want to see compliance officers starting to take material from the adult learning world, particularly around things like lean learning, the need for repetition, and how much better we retain information when we can see how we can use it right away. How can we get the critically important information we have—how to do things well and effectively—into people’s brains at the time they need it so that they retain it? It’s a hard question to answer for a lot of the compliance topics that we work with, but it’s so critically important if we actually want to change behavior.

About the Author

Erica Salmon Byrne is the President for Ethisphere and is a Sponsor of the Ethisphere Equity & Social Justice Initiative. She has responsibility for the organization’s data and services business and works with Ethisphere’s community of clients to assess ethics and compliance programs and promote best practices across industries. Ms. Salmon Byrne also serves as the Chair of the Business Ethics Leadership Alliance, where she works with the BELA community to advance the dialogue around ethics and governance and to deliver practical guidance to ethics and compliance practitioners around the globe.

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