General Motors revamped its ethics and compliance program following an ignition switch issue that resulted in passenger deaths, vehicle recalls, and a $900 million settlement with U.S. authorities.
Shawn Rogers joined GM in 2016 as lead counsel, compliance training and communications, about six months into the company's deferred-prosecution agreement with the U.S. Department of Justice. He sat down last week in Chicago at the SCCE Regional Conference with my LRN colleague, Marsha Ershagi Hames, to talk about the changes the company initiated to rebuild its culture and to take the first steps to restore its reputation.
When he arrived at the company, Rogers said GM had transitioned from "what happened?" mode to "fix it and move forward” mode. “This was a great time to join the company as a compliance officer, because the support to build a best-in-class compliance program and to work on fixing our ethical culture was at a high point,” he said. “The company was committed to doing whatever was necessary to get back on track.”
That commitment included both a willingness to staff up the compliance function, and a willingness to invest the necessary money to build a great program, he said.
And there was work to do. The investigator's report concluded GM had been operating in silos, and problems weren’t being escalated appropriately to senior management. “There was a fear of retaliation for speaking up,” said Rogers. “There was a culture of not challenging the decisions of leadership.”
Foundational to forging a new culture was a commitment to safety, and Rogers said this focus helped to improve the ethical culture, as well. “I think the culture of ethics and compliance has been dramatically improved by a company-wide emphasis on safety,” he said.
Part of the changes enacted by Rogers and his team included creating an all-encompassing compliance training program that addressed the company's complete risk profile, not just those traditional bread-and-butter risks that compliance traditionally owns.
That meant looking beyond compliance and forming partnerships with product safety, workplace safety, IT, human resources, and legal.
The team determined GM had three buckets of risk: traditional code of conduct risks that rest with the compliance function; protecting GM's Information; and safety. “Interestingly, we had a blind spot,” he said. “It took the #MeToo movement to show that we needed a fourth bucket: respectful workplace.”
Once foundational courses were created for the code, safety, information security, and respectful workplace, compliance identified six "advanced" courses that drilled down into specific risk areas: anticorruption; cybersecurity; export and trade; data privacy; antitrust; and information lifecycle management.
Not wanting to overload employees with 10 courses every year, a three-year rolling calendar was established to keep annual requirements to between four and five hours of required training, said Rogers.
In 2014, just as the ignition switch matter was making news, GM’s compliance team performed an ethical culture survey. Rogers repeated the same survey in late 2017, and said the scores were dramatically better. “I attribute the change to executive tone and ethical leadership,” he said.
And while the emphasis remains on putting the ignition issue in the past, “there remains a commitment from senior leadership to ‘never forget’ the experience or the failures that led to the matter,” said Rogers.