Humans Have an Uncanny Ability to Sniff out Hypocrisy

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Readers of the Ethics & Compliance Matters blog already know that a common theme is the idea that “you can’t delegate ethics.” Senior executives, including the CEO, must model the standards of good conduct they want everyone else to aim for.

From time to time, however, someone asks this cheeky but fair question: well, why not?

And as soon as we detect that double standard, we lose all respect for the ethical message and tune it out.

The easy answer, of course, is that humans have an uncanny ability to sniff out hypocrisy. If the CEO delegates ethics to someone else, he or she is sending the message, “compliance for thee, but not for me.” And as soon as we detect that double standard, we lose all respect for the ethical message and tune it out.

There’s a more nuanced answer to that question, however. It’s been on my mind as we’ve seen so many scandals in recent months of harassing behavior exposed, racist statements spoken aloud, and questionable payments given to people of dubious character.

All of those scandals blew up on social media. And once they did, companies had only days (if not hours) to decide how to address them. An outraged public would accept nothing less, and nothing slower.

Think about what really happens with misconduct allegations exposed on social media: the company loses ability to investigate, document and evaluate the misconduct at its own pace. Offensive behavior or embarrassing statements are shotgunned across the Internet for everyone to see, and everyone gets to do the investigating and evaluating.

All the company can do is respond to those judgments, in a compressed, highly pressured time frame. And unless your organization has already gamed out every possible form of misconduct and every response to it (spoiler alert: you haven’t), most of those responses will need to be made on the fly.

In other words, your response will depend on how much your organization makes ethical conduct a priority.

Which brings us back to why you can’t delegate ethics.


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Values & Priorities Aren’t the Same

Values are ideas the company believes in: innovation, inclusion, collaboration, efficiency, respect, ethical conduct, profitable growth. Priorities are how much importance the company places on different values relative to all the others.

Executives don’t like to say that aloud; it’s like admitting which of your children are your favorites. The truth, however, is that organizations need to place their values in a certain order, so employees will know which objectives are more important to pursue.

Investors, regulators, consumers and the public all want to see that your organization prioritizes ethical conduct above other, competing values, such as hitting profit targets or closing a lucrative sale.

In our modern, social media world, ethical conduct needs to be a priority. That’s not simply because ethical conduct is important unto itself (although that’s true). Rather, ethical conduct must be a priority so others won’t chew your organization alive on social media when some allegation of misconduct does happen.

What’s more, people need to see that ethical conduct is a priority, in tangible ways — and not just employees. Investors, regulators, consumers and the public all want to see that your organization prioritizes ethical conduct above other, competing values, such as hitting profit targets or closing a lucrative sale.

That’s why senior executives can’t delegate ethics. If you do, it telegraphs the message that ethical conduct isn’t a priority. After all, if the CEO can’t be bothered to care about ethics, why should anyone else?

That’s also how employees get the idea that they can start switching around corporate priorities, putting sales goals or product development ahead of, say, obeying the law or creating a respectful workplace. If the CEO delegates ethics to someone else, whittling it down to a mere a policy or training course, others start putting aside ethics too.

Assessing Your Priorities

So how does an ethics and compliance officer determine what the corporate priorities really are?

There are proven tools: employee surveys of workplace culture, statistics on subjects such as case closure times, complaints about retaliation, or gender pay disparity. Chart those numbers over time, and you can gain a sense of the company’s overall direction. You might also identify some parts of the enterprise with substantially different patterns, which might suggest a subculture (either good or bad) worth your attention.

There are also a few subjects always worth examining. For example, the structure of incentive-based pay always says something about what a company’s priorities are. Do you penalize misconduct and noncompliance, or reward good ethics? Do you pit employees against each other, or encourage collaboration?

Inquiries like that will inform a compliance officer’s understanding of what the company’s priorities truly are, and where ethical conduct falls in the pecking order. That, in turn, will give you a clearer conversation to have with senior leaders about how well their tone at the top is actually being received.

Above all, you can give them plenty of examples of real companies and real people, judged swiftly and harshly for ethical failings. A company can only withstand those pressures by demonstrating its commitment to ethics clearly and constantly.

Corporate leaders can’t delegate that.

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