Compliance and Ethics: Ideas & Answers. Edition 77

Dear friends,

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

In our first piece this week, inspired by a sign he came across in Spain, Adam Balfour asks 'how awkward are you making the speak up process?'.

Most organizations instinctively keep their problems secret, however 3M have found that using actual internal ethics and compliance case studies increases employee engagement. In our second piece this week, I consider 3M's transparency journey and their use of actual cases as teaching tools.

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.

How Awkward Are You Making The Speak Up Process?

by Adam Balfour

My #SundayMorningComplianceTip series took a much needed summer break, and I’m glad to restart my posts again especially in the lead up to next month’s Society of Corporate Compliance and Ethics (SCCE) #CEI in Grapevine. While I made an effort to not check emails and not think about compliance during my time away from LinkedIn, I did come across a few compliance related themes while on vacation that I’ll share over the next few weeks starting with a sign I came across in Spain.

I took this picture on a short bus tour we took during a brief visit to Coru?a. Thankfully we had a great driver and no issues with our trip that needed reporting, but telling someone that the only way to raise reports or complaints is to ask the person you are likely complaining about to provide you with a complaint form and then having to hand it back to them to hopefully pass on to their management seems like (intentionally or not) the most socially awkward way for someone to report concerns.

Hopefully your organization has better ways for employees and others to raise concerns and ask questions, but speaking up feels socially difficult for many people regardless of what options are made available. Speaking up is difficult for many people and for many different reasons, but the process that supports people speaking up should not make the process even more awkward and uncomfortable.

3M’s Transparency Journey: Using Ethics and Compliance Cases as Teaching Tools

by Joe Murphy, CCEP

In SCCE’s Complete Compliance and Ethics Manual (CCEM), one of the first chapter titles that caught my eye was on 3M’s use of actual cases as teaching tools.? This chapter, by Michael Duran and John Stoxen , dove into a communications approach that some view as controversial, but I have seen to be enormously effective.

3M has found that the use of stories based on actual internal case examples is a startlingly effective tool to get employees’ attention. As the authors wrote in the chapter, once they started using these actual cases, “[e]mployees emphatically asked for more real-life examples.”??

Keep problems secret??

At 3M they had previously followed the instinctive advice of the internal voices not to publicize problems or failures.? In fact, the CCEM chapter helpfully lists what the pushbacks are likely to be for any suggestion to publicize disciplinary cases.? But then the company had a serious and expensive case of internal fraud, and realized how unengaged employees had been in the circumstances.? The company’s people just did not believe this type of thing could happen there, and also did not see themselves as responsible for taking steps to prevent or stop misconduct.?

In most organizations the instinctive response is not to publicize bad news or tell everyone about it. You may think something is confidential just because you didn’t officially mention it, but it is not.? Maybe the real story is confidential, but the parallel story created by employees’ imaginations is very much alive.? So there is likely already a story about what happened, circulating around the company.? If the company does not have a believable story to tell, others will fill in the vacant space. Thus keeping quiet about a compliance incident may not even have the value that was intended.????

Stories work & DOJ knows this

What 3M realized was that stories are a great way for people to learn. Stories are much more memorable than lectures, manuals and instructions. The authors also noted that DOJ, in its evaluation questions, mentions learning from experience as one communications technique, which would clearly include this approach. For example, the Criminal Division in its evaluation questions asks “What communications have there been generally when an employee is terminated or otherwise disciplined for failure to comply with the company’s policies, procedures and controls (e.g., anonymized descriptions of the type of misconduct that leads to discipline.)?” The Division also indicates its skepticism for excuses for not doing this, referring to “pre-textual reasons . . .to protect the company from whistleblowing or outside scrutiny.”? It praises the “valuable deterrent effects” from “publicized disciplinary actions internally”? (US Department of Justice, Criminal Division, Evaluation of Corporate Compliance Programs (Updated March 2023) pp. 5, 13, 12). It is evident that the government recognizes the power of this technique.??

Continue reading on our website...

For those who are skeptical about the power of numbers, I offer this quote from former UK prime minister George Canning:

“I can prove anything by statistics except the truth”

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