Cascading Leadership Tone Using a Dialogue-Based Approach
Ethics and compliance professionals know that tone from the top is a quintessential component of a successful ethics and compliance program. As a first step, an organization’s leaders must set a tone that is aligned with organizational values. Examples of tactics that support setting a positive tone include reflecting ethics and integrity as part of the organization’s values, having a code of conduct signed by the CEO, and having leaders participate in the launch of ethics training initiatives.
However, a positive tone does not automatically trickle down throughout an organization’s operations. For this reason, setting the tone is only part of the formula for ensuring that an organization carries out ethical business practices.
Ethics and compliance professionals apply different initiatives to nudge the trickle-down effect of positive leadership tone. Such initiatives can include implementing an ambassador program and crafting emails with ethics-related messages for leaders to circulate to their teams. These initiatives are carefully crafted to propagate the tone from the top through middle management and down to frontline employees.
An additional strategy for effectively circulating positive tone from the top throughout an organization is to ensure that executives and senior managers create an environment where employees feel safe talking about situations they may face in daily operations. This will increase dialogue on ethics-related issues by allowing employees to know that leadership is plugged into their operational reality and available to offer support. Practically speaking, the following five tactics can assist in creating safety zones that promote dialogue between managers and those who report to them:
Educate executives and senior managers about healthy business conduct reporting statistics: There is a common misconception that it is ideal to have zero reports received through the organization’s internal reporting mechanism (usually the hotline). However, a healthy internal reporting mechanism should yield approximately 3 to 14 reports per 1000 employees annually, depending on which industry benchmark is used. At WSP we found that, by educating leaders that a higher number of reports can signify a healthy internal reporting mechanism, the fear of receiving reports with allegations of misconduct is replaced with targets to ensure enough reports are received. Including reporting statistics as a key metric for which executives and senior managers are responsible further increases their accountability towards having a healthy internal reporting mechanism within the group of employees they oversee.
Get executives and senior managers to experience the benefits of information flow: It is not just about topline numbers and statistics! It is additionally important that executives and senior managers know the types of allegations and reports that come from employees in their business line, region, or function. To do this, involving executives and senior managers in the investigative process and encouraging their participation (where appropriate) is key. Their participation can include being notified of opening or closing an investigation and deciding upon follow-up actions. An increased involvement in ethics-related issues will provide executives and senior managers with better insight into the different issues that employees may face. It will further allow them to see the benefits of knowing and managing matters up front instead of waiting for situations to unravel.
Promote dialogue among executives and senior managers: Executives and senior managers should share and discuss their experiences dealing with ethics-related issues. To do this, it is important to facilitate practical dialogues among executives and senior managers on the issues and challenges they face. For instance, during leadership meetings, WSP carves out time for a brief discussion on a recent ethics incident, and the executive or senior manager from the business line, region, or function involved in the incident leads the dialogue. This allows the organization’s leaders to see the different issues that surface throughout the organization and, most importantly, to realize that no one is immune from unethical business practices.
Create an environment where employees feel safe discussing the pressures they face: Those in leadership positions must encourage their teams to talk about the pressures they face. Team meetings should become a safe zone where employees can discuss situations where they felt uncomfortable and have their managers provide support and assistance in how to navigate them. Leaders can enable dialogue by talking about issues they themselves may have faced. Whether managers enable this type of dialogue with their employees can be measured by recording the number of “incidents” that are disclosed directly to them.
Bring the anti-retaliation policy to life: Anti-retaliation policies are nowadays a tag-along component to internal reporting mechanisms. However, anti-retaliation policies should not be a check-the-box component of an ethics and compliance program. In fact, for employees to feel safe discussing matters with senior management, raising an issue to an ethics and compliance officer, or even filing a report through the internal reporting mechanism, it is critical that they feel protected from reprisals when they are acting in good faith. Employees should, therefore, be aware of the organization’s anti-retaliation policy, and reporters should be specifically reminded that, should they fear retaliation, they can contact the ethics and compliance office for assistance.
Tone from the top cannot be limited to words alone. By incorporating sound leadership practices that create a safe zone for employees to discuss business conduct issues they face in daily operations, the tone from the top can come to life. This will not only allow employees to see their leaders as people who care about the situations they face but also promote the disclosure of situations in a timely manner. In turn, this allows an organization to manage disclosed issues up front. Overall, by creating an environment that promotes dialogue and disclosure, the risk that an ethics issue unravels into a reputational impact is mitigated—which is, in and of itself, a key purpose of an ethics and compliance program.
About the Author:
Julianna Fox has been Chief Ethics and Compliance Officer for WSP since March 2018. She is responsible for overseeing the global compliance and ethics program and provides strategic advice on matters of business ethics. Julianna previously served as the Global Director of Compliance and Ethics from May 2015 to March 2018. Julianna began her career in legal and regulatory compliance as a litigator in the Montreal-based law firm Fasken, following which she was in-house counsel specializing in matters of regulatory compliance for a large international airline.