The E&C Pulse - March 21, 2019

March 21, 2019 LRN Corporation

Strong Ethical Cultures Established on a Bedrock of Trust

profile_pics_5Many organizations spend considerable time and money trying to create a culture that embodies their values and personifies the qualities that command the loyalty and admiration of employees, customers and investors.

In the end, culture comes down to trust: whether each stakeholder group can trust the organization. And that makes earning trust a central goal for ethics and compliance departments, equal in importance to following laws, rules and staying out of trouble.

LRN’s Susan Divers moderated a panel at last week’s Ethics Summit put on by Ethisphere Institute, and asked what organizations are doing to build trust.

Joseph Suich, chief compliance officer and counsel at GE Power, said trust occurs on multiple levels--trust between employee and company, trust between employee and manager--and it comes down to supporting each other.

The organization should be unwavering in expecting employees to act in a way that is consistent with its mission, values, policies and procedures. In return, employees have a right to expect issues will be addressed in a transparent manner. When employees trust, they are more likely to report potential issues when they come across them, said Suich.

“To me, trust is for the company and for the employee,” he said. “It’s a real symbiotic relationship.”

Gloria Santona, of counsel at law firm Baker McKenzie, board member of Aon PLC, and formerly a longtime executive at McDonald’s Corp., where she headed legal, risk and compliance, was asked how organizations and boards can help to build trust.

One thing that’s very important, she said, is to get processes that are transparent, so employees know if they make a claim there will be follow-up, and they will get a response within a certain period of time.

It’s also vital for the board to make sure all business units in the organization have uniformity in how to handle issues, to ensure all employees are being treated the same, regardless of which department of division they work.

Transparency and ongoing dialogue are really important, said Santona, adding that sometimes it isn’t even so much what is said, as much as just showing up and being present.

“Personal touchpoints are really important to employees to building that trust,” she said.

Divers emphasized the best ethics and compliance programs operationalize their procedures by embedding them into the business. LRN’s Program Effectiveness Report 2019, released last week, shows such programs promote ethical behavior more effectively than those that don’t.

“LRN's research demonstrates conclusively that ‘operationalizing’ ethics and compliance in every phase of business decision-making enables leaders and employees to think and act based on shared values rather than on short-term expediency or minimum legal requirements,” stated the report.



Ben DiPietro



A survey by Deloitte of 102 public companies who are members of the Society of Corporate Governance found 42% of boards are increasing focus on corporate culture. Seventy-five percent of boards make corporate culture risk the responsibility of the full board, while 20% place it under the compensation committee.



Billionaire diamond dealer Nirav Modi was arrested in London at the request of Indian authorities for his alleged involvement in a $2 billion fraud, CNN reports. 

LRN founder, Chairman and Chief Executive Dov Seidman, writing in Medium, looks at the moral lessons from the Theranos scandal and what Silicon Valley can learn from it.

As the use of artificial intelligence spreads, companies are going to need chief bias officers to monitor data and make sure ethical standards are being upheld as to its collection and use, according to an article in Forbes. CIO Dive asks where are the ethics in AI.

Goldman Sachs' leadership sent a memo to employees pledging to improve diversity in hiring. Maybe companies need to link executive pay to diversity hiring targets, Mark Gilbert writes in Bloomberg Opinion.

Many chief executives still don't see the connection between social impact and business success, Phillip Haid writes in Fast Company.

The college admissions scandal is a reminder that rich people are more likely to act unethically, David M. Mayer writes in the Conversation.

Baltimore Mayor Catherine Pugh resigned as a board member of the University of Maryland Medical System after it was reported she failed to fully disclose that she had a contract to sell her children's books to the hospital network, Associated Press reports. 

More survivors and more dead bodies are being found by rescue crews after a massive cyclone struck southern Africa and caused widespread destruction in Mozambique and other places, Reuters reports.



Please join us for a conversation between LRN CEO Dov Seidman and author Daniel H. Pink that relates to the inspiration behind and timing of key decisions in business – something that is particularly important in ethics and compliance where we try to elevate the standards of workplace behavior.



Bad Blood author John Carreyrou sat down with Dov Seidman for a #HOW Matters Conversation to discuss what has been called the greatest fraud since Enron. In this video clip, John Carreyrou discusses Theranos' toxic culture.



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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