How and Why Leaders Should Create Transparent Cultures

This is excerpted from an article originally published by The Anti-Corruption Report on May 2, 2018.

Transparency in an organization can be a critical “early-warning system” for compliance violations and unethical behavior before they metastasize into scandals or regulatory violations that can be costly, if not existentially threatening, to a business. A careful analysis of many, if not most, of the recent corporate scandals shows that early on employees voiced concerns about the behavior in question, but no one “listened” effectively to those concerns by taking action.

While ethics and compliance leaders generally recognize the importance of building avenues of open communication into their organizations, even established mechanisms like hotlines can miss the mark. And some company leaders intentionally limit transparency and communication, which can be even more harmful to a company.

The most effective way for ethics and compliance leaders to weave a culture of transparency throughout an organization – rather than “bolting one on” – involves two complementary threads: encouraging employees to come forward to their managers about potential ethical concerns, and training managers so they know how to listen to – and respond to – complaints and concerns when they hear them.

This requires opening direct, face-to-face lines of communication between management and staff, and moving away from indirect and anonymous means of communicating and reporting compliance concerns. The best way for business leaders to make this shift is by building a workplace culture that establishes early in an employee’s tenure that open, transparent communication is expected of workers at all levels. And, equally important is training all managers on how to respond appropriately to such concerns and ensure that they are effectively addressed.

Open communication involves looking beyond a hotline and training managers to focus on the issues that employees raise, and to triage those issues so they are dealt with correctly. Equally important is teaching employees how to recognize common unethical behaviors and empowering them to address them in the right way. Most large-scale compliance and reputation crises start small, so having an early-detection system is critical. In our experience, we’ve found that one of the most important elements of early diagnosis when it comes to misconduct is building a culture of transparency, communication and free expression.

Read the full article here.

About the Author

Susan Divers

Experienced Ethics and Compliance Executive. Senior Advisor at LRN

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