Compliance and Ethics: Ideas & Answers. Edition 60

Dear friends,

Welcome back to another edition of Compliance and Ethics: Ideas & Answers.

To start this week, the team have been very kind to write a note on my nomination for Compliance Week's Compliance Mentor Of The Year award. We then have a piece by regular contributor, Adam Balfour on risk taking, inspired by a poster spotted on a recent trip. Next this week, I collaborated with Amii Barnard-Bahn, JD, PCC on a piece where we offer 6 practical steps to prevent retaliation and create an environment where anyone can safely speak up.

As always we finish with a bit of fun in our regular feature Compliance Lite.

And don't forget there's more content on our website so please do visit us there to read our other articles.

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Thank you, Joe.

Congratulations Joe

Congratulations to our editor-in-chief, Joe Murphy, for being selected as a finalist for Compliance Week's Compliance Mentor Of The Year award. We are keeping our fingers crossed that Joe wins the award, and we wish the best of luck to the other nominees for all the categories.

There is an incredible pool of talent in the compliance profession and we applaud Compliance Week for providing an opportunity to celebrate the many people who are tirelessly working to support ethics and integrity across many different organizations and industries.

The winners of the awards will be announced in May and the full list of nominees can be found here - https://www.complianceweek.com/events/excellence-in-compliance-awards.

Intentional Risk Taking

by Adam Balfour

During our recent family spring break trip, I saw this poster on the wall of the hotel gym encouraging people to “take risks” (there was also another smaller and less colorful sign, not captured in the picture, which highlighted the risks of exercising and to consult a medical professional before working out).

While no organizations (that I know of) have posters on the wall encouraging people to “take risks,” people are always being encouraged, pressured and incentivized to take different risks. Risk is not a bad thing - taking on risk in an informed and intentional way is often a smart business choice and can lead to good outcomes.

One thing organizations need to consider is what leadership may mean and intend as “take risk” might be different to how the message is received and understood by others in the organization. Leadership might be meaning “take some reasonable and appropriate risks” and employees may hear “this has to be achieved at all costs.” Leaders have influential voices and the intent of their messages can be amplified or distorted when heard through pressure and misaligned incentives - leaders need to ensure that their intentions are clearly understood and to regularly talk about the importance of ethics and integrity in what results are achieved and how they are achieved.

How to Prevent Retaliation: 6 Practical Steps

by Amii Barnard-Bahn, JD, PCC & Joe Murphy

If we are going to prevent violations and create credible and effective compliance and ethics programs there is no question that there needs to be an effective speak up system that people feel free and safe to use. But it is also true that fear of retaliation is a serious deterrent to speaking up.? Other than merely stating a policy against retaliation, how do we bring such a policy to life and have an environment where anyone can safely speak up?? Here are some practical steps to achieve this goal.???

Add retaliation to your risk assessment process

Retaliation is a serious risk that can undermine a company’s culture.? It can be lethal for a compliance program.? But it is also an area where legal risks have ballooned.? Numerous statutes in the US and around the world impose serious legal sanctions for retaliation.? Sarbanes-Oxley, Dodd-Frank and the EU Whistleblower Protection Directive are clear examples.

While it also makes sense to spell out a strong policy against retaliation in a company’s code of conduct, it is never a good idea merely to rely on a policy to get results.? A policy is only a starting point, not a finish line.? Rather, companies need to recognize how pervasive a risk retaliation can be – both in formal management steps against whistleblowers and in the informal shunning by managers and employees.? If there is no active intervention to prevent retaliation, there will be retaliation in one form or another.?

These points should also be taught to supervisors, so they understand the inherent bias that exists against whistleblowers. By understanding Barnard-Bahn’s six-step process for effectively delivering bad news,[1] supervisors can learn how to be more welcoming recipients of tough messages, managing their own reactions to those who speak up, and taking appropriate action.???

Use a complaint tracking system

Companies need to follow up with those who speak up.? This inquiry needs to go deeper than just the surface level of asking someone if they have been retaliated against. They may not always recognize backlash when it happens, such as the more subtle forms of shunning by bosses and peers. Helpful questions could include, for example, asking whether the person was no longer included in team meetings.??

There should also be objective comparisons of the person’s treatment before and after speaking up.? For example, were performance evaluations negative only after the event? Consider that the standard here is not a legal one.? Rather, the question is fairness and perception by other employees.? If people believe there is retaliation, even if it does not meet a legal standard, the results on the culture are just as negative.?

Companies also need to consider the saying that “revenge is a dish best served cold,” or the boss who waits for an opportune time to retaliate.? Thus the follow up needs to be extended over time.???

Ask about retaliation at exit interviews

Exit interviews are important tools for compliance and ethics programs.? They can provide useful insights about retaliation and the perception of retaliation.? Exiting employees can be asked if they have ever felt that they were retaliated against for speaking up. As important, they can be asked if they have ever seen this happen to another employee or heard about this happening.?

Be careful here not to draw legal conclusions and keep in mind that such questions are indicators of the culture, and not determinations of legality. Nevertheless, if employees perceive that retaliation occurs this is a call for action for the compliance and ethics program.

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In his Devil’s Dictionary short story writer Ambrose Bierce defined “law suit” to mean: ‘A machine which you go into as a pig and come out of as a sausage.”

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