Many global corporations now incorporate ethics training into their compliance programs as they recognise the need to establish a culture where people do the right thing because the know and understand it is the right thing, rather than because a book of rules says it is.

Ethics training is designed to assist employees and managers to recognise the essentially human behavior that shapes cultural challenges and business imperatives and decide how decisions are made. It is designed to skill, empower, and challenge employees to review their typical responses to ethical challenges and, by canvassing different options, identify different options.

The best programs are anchored in the real ethical dilemmas and scenarios that play out at work and which make each workplace unique. Participants are encouraged to discuss and reflect on the systemic issues that give rise to the ethical concerns before identifying the course of action that best suits the business needs while safeguarding the organisation’s integrity.

The compliance function can sometimes find itself a victim of informal cultural phenomena, which often relegate compliance professionals to subordinate roles in the organisational hierarchy. This can isolate the compliance professional and make them reluctant to raise issues in fear of retaliation. Enron’s famous whistle blower, Sherron Watkins, is probably the poster child of such cultural phenomena.  When she first raised concerns around possible accounting frauds, Enron’s CEO’s response was to seek the Legal Counsel’s advice about how best to fire her! The Legal Counsel, knowing that by this stage questions were being asked in some quarters about Enron’s business model, argued that she should remain but be ‘managed’ instead. She stayed for a further two years while the company collapsed around her.

Ms Watkins’ account left no doubt that it started from the top where the leadership team completely abdicated any responsibility for setting the ethical tone and neither were they held accountable by the compliance function. The result was the emergence of an organisational culture where, in Ms Watkins’ words, “corruption spread like a sexually-transmitted disease”.

We recently completed a large project with AIA Group (Asia). They had established their Compliance Learning Academy and saw that business ethics was an integral part of the compliance discipline. They put 350 of their most senior managers from across the region through an ethical leadership program as a first step.  Subsequently, they began rolling the program out across member companies and supplemented this training with an eLearning program using dilemmas and scenarios to reinforce the face-to-face learning.

An ethical viewpoint

While a compliance review might begin by asking: ‘What went wrong? an ethical orientation begins by asking: ‘What was the right thing to do and what contextual pressures might have shaped the choices made?” These initial questions take the enquirer down two very different paths to resolution.

The questions from the compliance viewpoint often restrict any analysis to one of adherence or non-adherence to existing policies. Whereas the questions from the ethical viewpoint take a systemic approach and open up enquiry that takes account of the dynamism within which the world of work exists and where employees operate where change is discontinous and polices are no longer up to date. It encourages a review of all possible actions and consequences on the part of an extended range of stakeholders. If the proposed action is deemed inappropriate in the light of new developments or new information, inquirers are led to consider the other available options to achieve the same objective while at the same time protecting the enterprise that pays them and to which they therefore owe a duty of care.

An ethical inquiry grounded in objectivity and fairness can often mean reconciling several different perspectives about what is the most appropriate action.  Very often the employers and employees have different perspectives as to stakeholder accountabilities and this approach expands the range of choices to be canvassed.  Finally the ethical orientation addresses the human needs that drive all actions.  Most people need to be able to understand the “Why” behind a compliance policy before they show much interest in its implementation.  Ethical enquiry addresses this need and speaks to the higher order values that we all aspire to.

The tone from the top

The importance of getting buy-in from the top regarding the importance of managing culture from both compliance and ethics perspectives cannot by over emphasised. However, the real issue is the outstanding need for leadership accountability for managing the ethical domain.

If leaders are not creating the ideal context where people know the rules and the rules underpin what gets rewarded, the organisation is set up to fail.  Employees quickly recognize that it is an unfair workplace environment and they do whatever is necessary to make the numbers or keep their jobs.  In many ways, organisational culture is still the lengthened shadow of those at the top and change starts with leaders standing up to their accountability to manage business ethics in the same way they manage every other management discipline.