For those who are in the compliance game having an ethical culture can be a safety net. The Federal Sentencing Guidelines specify up to $75,000 per infraction. What can save you is having an ethical culture.
Traditionally, those with a compliance bent want to follow the rules, so they train their people (good idea), have a hotline for calls that are anonymous (also a good idea), and they develop a code of conduct (another good idea). They sit back and expect everyone to be “ethical.”
Now, contrary to popular legal belief, you can’t obey rules you don’t know exist so all that preparation is just common sense. However, all of these steps, just like Sarbanes Oxley only help a little.
Think for a moment about why people do things that are seen as unethical. First and foremost there is greed. It’s hard to do much about that, but adequate pay is a help. Here conflicts of interest can raise their ugly heads as people get torn between what they want and what is appropriate and training about this issue is really helpful.
However the three most common issues are not dealt with by any of the things we’ve already talked about; anger and spite, ego, and structure pressures. This is the arena Ethical Impact L3C plays in because it is the hardest to see and results in the biggest wins!
Anger and spite are the result of poor management. When people are disrespected they tend to want to get even. It is not hard to do and that feeling justifies many different kinds of wrong action. Once employees don’t care about the company dangerous behavior is not too far behind.
Ego is often a management issue, as well. This is one that people can be blindsided by or it is so roaringly obvious everyone wonders why that person is still around. Ego is often behind spiteful behavior. This can be assessed for and, if employers will listen, will be reported by other employees. No one is so good that ego-driven behavior should be tolerated. The damage they do far outweighs any assumed benefit.
The structural issues are the hardest to find and, while often in plain sight, are invisible. These are situations where one department is rewarded for the mistakes of another or where bonuses are given for results, with little interest in how those results are achieved. If you want an ethical culture, then the how must be more important than the what. If you put up with questionable hows then you will be painfully surprised at the creativity of your employees. Fix the hows so they are open and transparent and you will fix most of your ethical issues as well. Ethics is really about right relationship. Treat people well, appreciate them and let them know that you do and ethics takes care of itself.