By Mary Bennett, R.Ph
Throughout my almost twenty years working in both ethics and compliance and the health care field, one of the most frustrating realities has been how often we miss the opportunity to catch a problem while it’s still manageable. In so many cases, someone knew there was an issue but did not speak up.
A recent survey by the Ethics Resource Center (ERC) bears this out: 45 percent of U.S. employees surveyed said they observed misconduct in the previous 12 months, but a third of them did not report it. According to the ERC, this represents 20 million missed opportunities to address a problem. How many of these happened at your organization? How many turned into a costly, reputation-killing scandal? Why didn’t these employees report the misconduct? What would increase the rate of reporting? And what can you do as a pharmaceutical executive, to help make that happen?
Why Employees Don’t Report Misconduct
You may think that employees resist the idea of reporting because they do not want to “tattle” on their coworkers. But when I’ve conducted focus groups with employees, they’ve told me that the top two reasons for not coming forward are: fear of retaliation and the belief that nothing will be done.
While it is impossible to completely overcome employee reluctance to come forward, the following steps can greatly tip the odds in your favor:
- Create Awareness of misconduct and employees’ related responsibilities
- Take Action to get the issue appropriately addressed
- Maintain Safety through protection from retaliation and job security
A code of conduct that lays out a company’s standards for business behavior is the foundation of creating awareness. The code should address conduct in dealing with the organization’s legal and reputational risks. It should be written in understandable language with helpful definitions, Q&A, and company-specific examples with an appealing layout and design. This approach is user friendly, relevant and more likely to be read and digested by employees. Policies and procedures with more detail should flow from the code.
Effective communication of the standards is as important as the code itself. The cornerstone of effective communications is the distribution of information followed by training to reinforce the messages. Typically, code of conduct training is conducted during an employee’s onboarding process and repeated every 1-3 years. Topics should include behavioral guidance related to organizational risk (e.g. pharmaceutical company interactions with healthcare professionals), management and employee responsibilities under the compliance program (e.g. the obligation to report misconduct), company resources provided to field reports and answer questions, and guidance on making decisions when the code or policies are not enough. Courses may be instructor-led, e-learning or, ideally, a combination of both.
In the pharmaceutical industry, this combination approach better targets specific groups with different needs. For example, company-wide dissemination of an e-learning code of conduct course that includes anticorruption could be supplemented by live, more in-depth training on the topic for pharmaceutical sales representatives, who traditionally have a high likelihood of exposure to the risk.
Many companies rely on distribution of their standards plus annual training as their entire awareness plan; this, however, is insufficient. Taking a lesson from pharmaceutical advertising, the key to lasting awareness is repetition that takes a variety of forms and targets specific audiences.
Ongoing communication should leverage methods that already work in your company (e.g. newsletters, email, posters, brochures, video, etc.) and include content that employees find helpful. We have found that the most effective way to communicate the company’s reporting system is through posters. To build trust, the company’s communications must also describe what happens after a report is received. Employees need to know who will investigate the report, how they will be involved and kept informed of the investigation process, and how they will be protected from retaliation.
Recently, a Fortune 250 pharmaceutical company paid $3 billion to settle a whistleblowers’ claim, setting a new record for healthcare fraud and criminal fines. As with almost 90 percent of such cases, the whistleblowers tried to raise the issues internally before filing an outside claim but the company took no corrective action. In short, the employees had no power to get the wrongdoing addressed. This isn’t simply an isolated event or limited to pharma. Lack of empowerment – to voice a dissenting opinion or get wrongdoing addressed – is a cultural problem affecting a business’s operations globally. The cure must also be company-wide.
The ethics and compliance staff can assist but, to achieve success, cannot do it alone. They must work with management and human resources to promote and reward ethical conduct. Embedding business conduct goals into the organization’s performance review process in a way that has a real impact on compensation is key. Additionally, broad communication of sanitized helpline cases is a powerful tool to reinforce that reports lead to corrective action and the company supports those who speak up.
The next step must be conducted concurrently and is the responsibility of leadership – create a culture of empowerment. In the pharmaceutical industry and others, this requires specific and impactful two-way communication: listen to employees, keep them informed, create an open communication environment, encourage reasonable risk taking, learn from mistakes and praise success. Empowered employees who believe their organization will take action are much more likely to report issues of misconduct. Who would you prefer hearing from about wrongdoing – your employees or a government agency? Assuming the answer is “your employees,” you must create an environment that supports this communication.
In 2011, 22 percent of surveyed employees who reported misconduct said they experienced retaliation, up from 12% in 2007. A higher number (32 percent) fear retaliation. In focus groups, I have heard employees define “retaliation” as everything from losing their job, losing a promotion or losing a promised bonus to being “frozen out” of business opportunities and peer interactions, and being blacklisted. In these circumstances, employees feel insecure and unsafe in their workplaces.
Most companies have a non-retaliation policy that promises protection from retaliation. The policy commonly pledges to take swift action against anyone who retaliates against an employee for reporting misconduct or cooperating in an investigation. This is an important standard; however,taking action to monitor for retaliation and communicating the results assures employees that the policy has teeth. A program for retaliation monitoring includes education on the policy, transparent communication about how the company deals with retaliation (e.g. sanitized case studies; helpline statistics), and building a proactive monitoring program that follows key indicators.
Research by the ERC also identifies “job security” and the “financial health of the employer” as other key factors impacting employee feelings of safety and security. This is likely a current concern for pharmaceutical employees as the fortunes and reputations of their companies rise and fall with the latest headlines. A sense of safety based on financial security and protection from retaliation increases the employee’s sense of personal obligation to report misconduct.
Finally, employees are more motivated to report misconduct if they not only know who they can talk to, but feel secure knowing that those people – plus the rest of management and their peers – support them in their efforts. The code of conduct may say the company supports employees who report, but it is a culture of palpable encouragement and support that will give an employee the feeling of safety and courage to step forward.
In our focus group work, we often ask employees who they would speak up to about misconduct. The overwhelming majority name their direct supervisor. Managers certainly should be a source of support for their people, but for the overall culture to be supportive it needs to be modeled by top leaders setting clear expectations and cascading that tone through the management ranks. Employees with many sources of support are more likely to step forward and report.
These may sound like nice-to-do activities and some may already be handled by the ethics and compliance staff. However, consider this: Compliance and Ethics Leadership Council research reveals that companies who spend time and effort on building a high-integrity corporate culture saw a 67 percent decrease in the most significant forms of business misconduct. Furthermore, companies with higher corporate integrity (as expressed by their culture) outperformed those with the lowest corporate integrity by more than 16 percent when it came to shareholder return.Clearly, a commitment and dedication to developing and maintaining a culture of integrity is one of the best business decisions company leaders can make.