Leveraging Middle Managers Requires Strong Tone at Top: The E&C Pulse - October 30, 2019

October 30, 2019 Ben DiPietro
 

Oct. 30, 2019

Leveraging Middle Managers Requires Strong Tone at Top

 

The recent updated guidance from the U.S. Department of Justice emphasized engagement with middle management on issues of ethics and compliance. How does an organization take that guidance and put it into practice?

 

A webinar last week featuring LRN’s Dr. Marsha Ershaghi Hames and Nancy Lanis, vice president and chief compliance officer for medical devices and services company Henry Schein, Inc. talked about how a focus on middle management starts with a strong tone at the top, as that sets the example of what is expected.

 

“We talk about the importance of their shared commitment to compliance, their importance as role models, the importance of compliance and remediation if something does come up, of not retaliating, of making sure they and their teams know where resources are,” said Lanis. “Of integrating compliance into their business thinking every day.”

 

The E&C team is diverse in its experience, with attorneys, non-attorneys, former prosecutors, people versed in finance, internal audit, systems administration, analysis, and policy administration. Three governance committees--one at the board level, an executive steering committee, and a compliance committee--meet quarterly, and are used by the E&C team to get buy-in on initiatives, get their insights on issues and events, and seeking resources, said Lanis. 

 

“We do ask them to touch all levels of the organization, and repeatedly emphasize that everyone is responsible for compliance in their daily decisions,” she said. “As a compliance team, we serve as coaches educators, monitors, cultural reinforcers. Governance is a crucial aspect of operationalizing, and we need buy-in at all levels of the organization.”

 

The company started conducting a global survey of random managers a few years ago, then did the same with its U.S. managers, taking issues that had come up and setting up focus groups to explain what was happening in those areas, said Lanis.

 

It shared the results with both its dental and medical groups, which usually operate independent of each other. The comments were used to improve the program, and the changes were publicized through various communications, said Lanis.

 

“These are examples of how you can leverage frontline management through the middle on up to model and walk the talk,” said Hames. “When concerns need to be escalated, they are more likely to scale to the frontline supervisor, so you want to find ways for continuous engagement and to develop a two-way dialogue so when misconduct occurs employees feel comfortable escalating.”

 

A key component of getting buy-in is to have each general manager of managing director designate someone from their team to be the point person for ethics and compliance to work in the most important, highest-risk areas, said Lanis. 

 

“We don’t have a full-time compliance person for each business unit, so doing it this way--as a matrix, defining key focus areas--helps not to burden any one individual or champion, and helped with buy-in,” she said. 

 

The foundation on which Henry Schein operationalizes its ethics and compliance program is summed up in its motto: “Communicate, Collaborate, Continuously Improve: Be An Integrity Partner.”

 

That means communicating effectively with the right stakeholders, at the right time, in the right way, said Lanis, and being able to listen and understand the goals and concerns of business units, and looking for ways to meet them. It also means explaining clearly when that can’t be done, and why, then brainstorming new ideas.

 

Externally and internally, things are continually changing, and that requires continuous learning and improvements. For ethics and compliance, Lanis said that means being independent, demonstrating experience and confidence, but understanding “we have to earn trust every day, and bring value every day, to our business partners,” she said. 

 

“To show we are trusted advisors, we are reliable, we understand their aims. It doesn’t mean we can always say yes, but it means we are trying to get as close to their aims as we can."

 

                                                                                                            BEN DIPIETRO
                                                                                                       @BENDIPIETRO1
                                                                                       BEN.DIPIETRO@LRN.COM

 

 

PRINCIPLED PODCAST

LRN's Ben DiPietro interviews Jim Massey, AstraZeneca’s vice president of sustainability, on this episode of the Principled podcast.

 

LISTEN AND SUBSCRIBE→

 

RECEIVE A FREE LRN VIGNETTE

LRN invites you to participate in its 2020 Ethics & Compliance Program Effectiveness Survey. All respondents who complete the survey by Oct. 31st will receive a complimentary LRN video training vignette about harassment and discrimination.

 

TAKE THE SURVEY→

 

MIND NUMBERS

30%/37%/33%

LRN's new research on code of conduct reviewed codes at 96 organizations, and ranked them into three categories: 30% were deemed optimized; 37% were seen as established, and 33% were classified as developing.

 

THE ELEVEN

 

A leaked video shows Google CEO Sundar Pinchai saying the company is struggling with employee trust, Washington Post reports. No wonder: Bloomberg reports Google is accused of creating a spy tool to silence worker dissent

 

Lebanon's prime minister resigned Tuesday amid widespread protests about corruption in the country, BBC reports.

 

Paul Polman, former head of Unilever, says capitalism needs to reinvent itself, calling it a "damaged ideology," Guardian reported.

 

The Securities and Exchange Commission is set to vote on rules changes to make it harder for activist investors to bring changes to companies, Reuters reports.

 

Research published by Cambridge University Press found no benefit to prominent figures, such as chief executives, who issue apologies after making controversial comments; in some cases, the calls for punishment grew.  

 

More than 250 Facebook employees sent a letter to the company protesting its decision to run ads from politicians that contain untrue statements, Axios reports.

 

Significant deficiencies were found in the whistleblower protection program at the U.S. Department of Veterans Affairs, CNN reports.

 

Some large U.S. employers use artificial intelligence to determine who is the best candidate for a job, sparking concerns, Washington Post reports.

 

Jeff Spross writes in the Week about the absurdity of CEO compensation. Harvard Business Review looks at how a CEO's personality can affect a company's stock price.

 

A former SEC enforcement attorney was indicted for stealing information from the agency so he could land a job as a compliance officer at a company under investigation, Radical Compliance reports. 

 

Harvard Business Review published a guide to the big ideas and debates taking place around corporate governance. Fortune looks at how boards can engage on corporate culture.

 

THE QUOTE

"Relativity applies to physics, not ethics."

- Albert Einstein, physicist and Nobel Laureate 

 

THE NUDGE

We talk a lot about the need to foster speak-up cultures where people are comfortable to report. Here's why: A report from Associated Press found many employees of Montana's state government were afraid to report wrongdoing for fear of retaliation, and few knew of the anonymous hotline to report violations. The good news? Most respondents said they would call the hotline in the future.

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