New Normal, New Ethics?

Post By: Paula Davis, Director, Waypoint GRC, Paula.davis@waypointgrc.com, www.waypointgrc.com

A recent survey estimated that, prior to the Coronavirus pandemic, only 3.6% of the US labor force worked from home at least half the time. Coronavirus has radically impacted these numbers with a study by MIT estimating that, of those that had previously been commuting to work, 34.1% are now working from home. And it looks like this is a trend that could last well beyond the end of the pandemic with Global Workplace Analytics estimating that “25-30% of the workforce will be working-from-home multiple days a week by the end of 2021.”

There are potentially huge benefits to a more permanent shift to home working including less pollution from commuting, reinvigorated local communities and more flexible working arrangements. However, a big shift to home working will present some new challenges for the identification, management and mitigation of compliance and ethics risk.

In ‘normal’ circumstances we rely heavily on our compliance programme infrastructure – our policies and procedures, our compliance training programs and our reporting hotlines – to drive and monitor compliant workplace behavior. With today’s tools and technologies this infrastructure is relatively straightforward to maintain, even for remote workers. However, infrastructure is a necessary but not sufficient mechanism for delivering compliance in practice. The most effective compliance programs are underpinned by ethical organizational cultures that transmit and maintain ethical principles and behaviors. This transmission depends, in part, on our leaders, managers and peers modelling ethical attitudes and behaviors in practice and actively demonstrating coherence between what we say and what we do as an organization. Sadly, it’s often the case that remote workers are not only physically distant but also culturally distant from the ethical heart of a business.

Richard Bistrong wrote about this sense of isolation recently saying, “When I first became an International Sales VP, management required me to sign annual anti-bribery affidavits. But in between, no one really asked how I was getting things done. That feeling of, “I’m out on an island,” which I still hear today from commercial leaders, was always with me.”

The same issue is illustrated by the Morgan Stanley case. In 2012 the DoJ declined to prosecute Morgan Stanley over a multi-million dollar corruption scandal – in large part because they were able to evidence a compliance infrastructure that included anti-bribery training and e-mail reminders about the code of conduct to employees, including Garth Peterson, the executive based in China who was subsequently jailed for evading the company’s internal controls. Peterson later went on the record saying:

“What I feel bad about is the government saying that they [Morgan Stanley] had this wonderful compliance program, when in fact the government knows that it wasn’t getting into people’s heads, which is what really matters.

“You can have programs and e-mails, but if people just delete them; if people have to do teleconferences but instead of actually listening, all you have to do is say, ‘Garth Peterson’s on the phone,’ and they check the box that says, he’s complied. And then you either quietly hang up, or you just put your phone aside and you do your other work. That was the culture. And you know, that’s not right, but that’s the way it worked.”

So how do we maintain a strong ethical culture in a world where increasing numbers of employees work remotely, removed from the normal channels of transmission?

Communication to combat isolation

A strong ethical culture relies on building and maintaining a strong connection with employees. For remote workers this takes a little more forethought than relying on informal workplace relationships to communicate cultural norms. If you are still operating a compliance communications program based primarily around annual e-learning, now is a good time to consider a fresh approach. Consider planning regular communications that keep ethics front of mind.

Although building a program of regular compliance communications can be challenging it’s definitely worthwhile. It turns out that our brains are actually wired to forget (we forget roughly 75% of new information we learn after six days). So, anyone, remote or office based, is going to struggle to remember the compliance training they took last month, let alone last year. However, research by MIT neuroscientists has found that “Repeatedly accessing a stored but fading memory rekindles the neural network that contains the memory and encodes it more deeply.” What does this mean for workplace compliance and ethics?

• Communicate compliance messages regularly. Revisiting key themes over time aids remembering
• Keep training modules short – learner engagement fades after six or seven minutes so there are diminishing returns on long courses
• Focus on helping people to understand what is expected of them, why it’s important and how to behave. the best possible outcome is that your employees want to behave ethically and know how
• Consider having employees ‘sign up’ to ethical conduct by, for example, certifying that they will abide by policies or your code of conduct. (Research by Dan Ariely suggests possible positive impacts on ethical behavior.)

It’s not just what you say, it’s how you say it

In order to engage your audience and drive ethical behavior your compliance communications need to be relevant, meaningful and persuasive. We can learn a lot from the worlds of marketing and advertising:

• Most of us like to understand why we are being asked to do something. Selling the benefits of ethical business practices is more motivating than being told to obey the rules.
• Remember that much of our decision making, including ethical decision making, is driven by our emotions. As marketing guru Robin Wight famously said, “The causal role of conscious thought has been vastly overrated, and what we are in fact is not rational creatures, but rationalizing creatures.”  Appeal to your audience’s emotions and their ability to empathize in your compliance messaging if you want to support ethical decision making.
• Use a personal tone of voice. Research on discourse processing shows that people work harder to understand something when they feel they are conversing with someone rather than just receiving information.  Adopt a conversational style using the active voice, short sentences and personalization (using words like I, we, me, my, our, you, your).

Look who’s talking

An ethical culture can’t be driven by compliance departments alone. The ethical culture of an organisation is supported or undermined by the words and actions of our senior leaders, our managers and our peers. When workers are co-located this process happens informally but for remote workers we need to think more carefully about how we signal and influence ethical values and behaviours.

• Consider regular videos and posts from senior leaders discussing compliance and ethics issues to signal commitment from the top down.
• Demonstrate active engagement and advocacy from supervisors and middle managers. If your team and one-to-one meetings have moved wholesale to Zoom, Teams or similar, consider equipping those leading the meetings with resources such as short slide decks, animations, facilitated discussion topics or team quizzes and games, to help them highlight compliance and ethics topics.
• Take compliance assessments to another level – put your compliance and ethics quizzes online and have people engage with their peers, individually or in teams, to achieve the best score or fastest successful completions.

Out of the classroom and into the workplace

What we need most from our compliance training and communications is for learning to be transferred effectively to the job. When we are co-located with colleagues it’s easy to ask our supervisor or an experienced co-worker what to do if we’re unsure. This gets a little more complicated for remote workers. Consider providing simple performance support tools to aid workplace compliance. Tools such as checklists, decision trees and FAQs can protect against failure, establish higher levels of baseline performance and, in the right format, are available wherever and whenever they’re needed.

There are very few positives to emerge from this global pandemic, but it does offer us a chance to take a fresh approach to compliance messaging and support that can benefit our businesses now and in the future.