University Compliance Culture

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University Compliance Culture: Lessons from Penn State and Syracuse

Maintaining open communication is a cornerstone of building a great organization, company and culture. A culture of compliance and an environment of transparency provide a means for both opportunities and issues to be brought to the foreground and effectively managed.  According to the Corporate Executive Board (CEB), when employees are comfortable sharing honest feedback, it correlates with strong business returns and provides the organization with “integrity capital.”

No event provides a clearer contrast between “philosophy” and “behavior” than recent issues in the athletic departments of both Penn State and Syracuse universities as chronicled in the media.  At Penn State, the football program’s motto, “Success with Honor,” was largely predicated on Joe Paterno’s brand and commitment to academic integrity along with athletic excellence.  There is no telling if either brand can ever be repaired, but future generations will have a very different perspective.

When a distraught graduate assistant told Paterno in 2002 that he had seen Sandusky with a boy in the locker-room showers, Paterno reported the incident to the athletic director but did nothing further, according to the grand jury statement. In other words, the great molder of young men discharged his legal obligation and moved on, according to the New York Times.

I can’t think of a better way to demonstrate “integrity capital” than by responding appropriately to issues and concerns.  With Penn State we have a clear example of the risk of information being lost, stuck or siloed, and only a glimpse to the harm that can occur as a result.  The reduced donations from alumni, the reduction in applications and pain being felt by a community as a result of the scandal and the loss of trust in their leadership will be devastating.

Both academic and athletic excellences are grand motivations to build a university around, but in this situation they fell apart due, in part, to poor communication. According to the HOW Report, a recent study by The Boston Consulting Group, The Center for Effective Organizations at the University of Southern California and LRN, organizations where purpose and values inform decision making and guide behavior have fewer instances of misconduct, higher retention, loyalty and higher levels of financial performance.  That was not the case in this instance as no one followed up on reports made about Jerry Sandusky beyond what they were required to do – not head coach Paterno, not the graduate assistant – and the chain of responsibility appears to have ended with the athletic director and/or university president.

To avoid that occurring at your own organization, building a great culture and installing values and purpose throughout your organization or business should be viewed as a critical objective.  Having clear benchmarks, metrics and collecting relevant information is a key component to operating an effective program that responds adequately to any issue, risk or opportunity in the stakeholder community. This measurement, described as “Organizational Justice” by the CEB, and as “self-governance” in the HOW report, can and should be measured and improved.

The CEB says that organization justice is the dominant source of integrity capital, defined by an employee’s agreement that the company responds quickly and consistently to verified or proven unethical behavior, and that unethical behavior is not tolerated.  I am sure we can agree that the broader community will say that this is precisely where both Penn State and Syracuse fumbled the ball.

Ensuring effective implementation of compliance, ethics and communication programs requires organizations to take a more rigorous approach to documenting, routing and measuring this information throughout the stakeholder community.  Providing managers, faculty, staff and students with consistent processes, policies and procedures helps to start the process.  Ultimately how the organization then responds to the information and provides feedback becomes mission critical to not only reducing risk, but to building a great culture.


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