The E&C Pulse - April 23, 2019

April 23, 2019 LRN Corporation

Ethical Cultures Build Trust Through Transparency

profile_pics_5The most exceptional ethics and compliance programs understand the importance of being transparent when addressing employee concerns, seeing it as not just as the right thing to do but as a way to build trust and to create a values-based culture.

Data compiled by Ethisphere Institute from the 128 organizations named to its World’s Most Ethical Companies list for 2019 shows the best programs make it a point to communicate the results of investigations, with 95% doing so in some form.

The number of companies on the list that share investigation results with all employees rose to 34% this year, up 2.5 times from 14% in 2016. The number of companies on the list who make their results public jumped threefold, to 32% from 11% in 2016.

“One reason we see employees won’t raise concerns is that they don’t believe the company will do anything with it,” and the other top reason is fear of retaliation, said Ethisphere's Erica Salmon Byrne during a webinar last week.

Companies that lack transparency may have what Salmon Byrne described as a “black box” investigation process, where a complaint is lodged but the person making it doesn’t know what the process is, how long it should take, and may or may not be told what the results are, or even if the investigation is completed.

“Maybe somebody comes to talk to me if I’m a known reporter, maybe...somebody comes to me at the end of the investigation to say ‘Thanks so much, we really appreciate you raising this concern. We’ve looked into it and we’ve closed the investigation. I can’t tell you what happened but I wanted you to know we’re done investigating this particular issue,’” said Salmon Byrne.

“I don’t know who else was talked to. I don’t know on average how long it takes to close an investigation. A lot of companies have not historically done a great job with explaining the range of disciplinary actions available to if I complain about [someone] and two weeks later they’re still here, I have the perception that nothing has happened.”

Some companies have acknowledged this is a problem and are working to be more open while maintaining the need for privacy. “That is a real need, you have to keep these investigations confidential,” she said. “The question is do you need to keep them as black a box as they currently are, or can you make the box a little brighter?”

Everyone loves a story

Companies can take this journey in smaller steps, sharing information with ever-widening levels of managers over time, until eventually all employees and maybe the public can see information such as how many days on average does it take to close an investigation, a breakdown of the different numbers and types of cases, how many from each business unit, substantiation rates.

This is relatively easy to do, as more than 90% of the companies that made the list use a tracking tool or case-management system to keep track of some or all reports and investigations. Another characteristic of high-performing E&C programs is the use of telling real-world stories to deliver and reinforce messages, even those cases that happened within the company. Ethisphere’s research found 91% of the companies on the WME list say they use real-life examples in their communications.

Salmon Byrne shared a story about how one company’s board and senior management dismissed concerns about #MeToo, saying they were certain nothing like that was happening at their organization. The ethics and compliance officer pulled data from the company’s harassment and discrimination investigations, then hired a local theater company to act out the actions described in the complaints before the company’s top 30 leaders.

The actors used the actual language described in the reports, and the impact on management was profound, said Salmon Byrne. “The feedback was tremendous. The whole crew took that experience back to their business units, and shared that, and helped people on their teams understand this really was something the company was concerned about,” she said.

It’s vital to tell good stories as well to reinforce successes and to call out employees making the right decisions. “These can have a tremendous impact with your ethics and compliance communications,” she said.

(NOTE: Exciting changes are coming to the newsletter. New format and shifting to once a week instead of twice a week, starting Wednesday, May 1. Stay tuned!)


Ben DiPietro



Research from Ethisphere Institute's World's Most Ethical Companies found 21% of the companies on this year's list said their E&C program head meets with the board without management present more than once a quarter; 28% said they meet quarterly; 2% meet three times a year; 4% meet twice a year; 7% meet annually; 22% meet as needed; 16% don't meet, or have a governance structure that doesn't include a board.



Two women employees at Google say the company retaliated against them for organizing a walkout last year to protest the way the company handles sexual misconduct allegations, The New York Times reports. Google says it doesn't tolerate retaliation.

A company in Brazil wants its executives to confess to corruption--and is willing to pay them for doing so, Bloomberg reports.

What do board members really think about environmental social governance and its role in the business? Harvard Business Reviews asked board members to share their true feelings.

Prosecutors in Japan again indicted former Nissan Chief Executive Carlos Ghosn, the latest development in the ongoing saga, Reuters reports.

Talking about the ethics of AI, and setting up ethics boards to oversee its use, won't be enough to fix big tech--and may lead to what Daniel Susser, writing in Slate, calls "ethics theater."

Tesla is reducing the size of its board from 11 to seven after removing four supporters of Chief Executive Elon Musk, MarketWatch reports.

Forbes reports pressure continues to build on chief executives to address climate change, while Tech Crunch reports venture capital investment in sustainability-focused startups rose 127% in 2018. 

What binds workplaces together? Bruce Daisley, writing for Disruption Hub, says it's sync. 

Communication is becoming more crucial as ethics and compliance compartments evolve, The Wall Street Journal reports. 



In case you missed it, last week LRN launched new ethics & compliance podcast, Principled. Tune into our first episode featuring Bertrand Rossert of The World Bank, who discusses the organization's five values and code of conduct. 



Does your E&C program measure up? Read this tip sheet to learn what the hallmarks of an effective program are and what strategies & tools you can use to take your program to the next level.



About the Author

By combining values-based education, rich insights, and expert advisory services into innovative, comprehensive solutions, LRN can help elevate behavior and the bottom line for your company.

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