Sally Rhys shared the following on the Compliance and Ethics Officer list serve on SCCE’s Social Network. It is part of a discussion about executives’ perspective on support for ethics and compliance. I believe she hit a profoundly important nerve related to how CEOs think. I used it to launch into an article on the subject. Sally is an executive coach and brings an interesting and focused perspective to the discussion. Please don’t blame her for the rant I follow up with. Please go to our website and click on the Social Network to join one of these discussion group list serves.
Sally’s comments
Hi all. Here is what I think happens. Top management believes that no one they know or who works for them would be non-compliant, so they don't give ethics much attention. For the vast majority of the workforce, that lack of attention looks like the execs don't care about ethics and a culture of non-compliance can arise. Unfortunately, until the execs attention is grabbed by a serious issue of non-compliance, they have difficulty giving the Ethics and Compliance program enough attention. Absent clear top level support for the Ethics and Compliance program, middle and first-line management must be clear in their actions and words that ethics and compliance DOES matter to them.
My follow-up:
I think Sally’s comments are profoundly correct. Leadership not only believes their people are ethical, but they also are dubious of taking a general approach to solving a specific problem. If you want to get more resources or support for compliance and ethics, ethics may not be the foot I would lead with. You have to get into the head of those who control the resources. They did not get to where they are by being vague. They got there because they are detail-oriented people with an interest in the facts. Ethics is vague. Solving problems by building an ethical work environment is a theoretical concept with lots of assumptions. If your CEO just came out of academia into business, by all means, lead with the theoretical foot.
However, most CEOs came up through the ranks with a very logical, practical, and fact-based process. Like it or not, that is how they think and what they act on. They haven’t spent a lot of their money on general plans. CEOs have focused on specific and accurate plans. They want a quick and accurate description of a problem, and they want a quick and specific description of how to solve the problem. They don’t often spend a lot of time debating or even discussing academic theories. Telling them you need ethics-related activity is perceived as a vague solution to an assumed problem. Telling them you need resources to help everyone comply with the laws that are being broken by similar companies is more specific—particularly if you site examples of similar companies who paid a big fine for not complying with the law. In some cases, you can make the case that these were good people who broke the law. This will help you present a plausible augment about how “his/her good people” need a good Compliance/Ethics department. If you talk about auditing, monitoring, investigation, discipline, and education, there will be more meat on the bone of your story. CEOs like meat, they like specifics, and they like a specific action tied to a specific result.
If you look at it from the CEOs’ perspective, you just might agree with them. First of all, they are correct: most people are ethical. In fact, many laws are broken by ethical people who did not fully study or understand the law. Furthermore, if you tell a CEO that you need an ethics program to help people who are unknowingly breaking the law, they may not understand how you can get there from here. You are going to have to explain to them how your ethics program is going to help an ethical person who already doing the right thing....to do the right thing.
Some broke the law by rationalizing their actions and, technically speaking, were not unethical. Ethical people often think a law was unfair or vague or they had to bend the rules because Enron, WorldCom, and Tyco justified their actions. Some stretched the definition of the law. Sure, you could describe it as unethical, but that is not as accurate as describing it as not complying with rules they didn’t understand or redefined for their own purposes. Like it or not, a lot of people who ended up in trouble believe they were ethical and, if you told them to be ethical, they would have said, “I am.” Therefore, telling CEOs, “I need more support for, or resources for, building an ethical culture,” may not resonate.
CEOs need a plausible description of the problem and a tight connection between the problem and the solution. CEOs just don’t tightly connect ethics to fixing a problem as you might. You really don’t need to agree with the CEOs’ perspective, but you must understand it if you want to get resources, support, or action. When they smell inaccuracy, wrong assumptions, or vagaries, they shut down. Everything else you say will become suspect.
I know a lot about these CEOs because a few years ago, I went over to the dark side and became one. I may have always thought like a CEO. I think like one now. Something funny happens to you when everyone’s job depends on you. You get a little fussy about implementing vague plans that chew up huge resources. The most important thing for me to do is to manage the resources in such a way that we will have enough resources to be around tomorrow. I guard the resources of the organization.
There is another problem they are dealing with that will affect you before you even walk in the door. People come to me every week requesting resources that are based on unproven assumptions and few facts. In fact, it happens so often I am suspect of anyone who approaches me for resources. Like it our not, you are probably dealing with a similar problem. Your CEO probably has been approached on a regular basis about the need for vague resources for a vague plan to achieve a vague result. If so, they are always suspicious. You may be in a hole before you start talking.
When the description of the problem and the solution are not very precise, I find the need to act hard to believe. I get very frustrated. When people come to me with accurate facts and detailed descriptions of what is happening, I am more likely to act on the suggestion. It’s open season on CEOs. The whole country is bashing CEOs. It’s easy to criticize them. It’s interesting, but should be irrelevant to those who want to run a successful Compliance and Ethics program. Believe what you want to believe about CEOs. To be successful, you have to understand how they think before you act.
It is helpful to understand how they got to where they are. Talk specifics. Give details. Leave out theoretical and vague descriptions of problems and solutions. You will get more resources and support if you do. You will still get your ethical environment. A lot of what you will do after you get the “specific compliance resources and support” will be ethics related. If you do find noncompliant behavior, fix the problem and discipline the offender—you will let everyone in the organization know that they need to be ethical (and compliant.) You will get the outcome you desire if you get the resources you need, and you will get the resources you need if you communicate in a way that makes people buy what you are selling.