How ethical is your company? Would you give your company an “A” on doing the right thing? If misconduct is observed, is speaking up ignored and punished, or encouraged and rewarded?
Unfortunately as I can personally attest to, misconduct is often not reported because employees are fearful of retaliation and potential job loss. In some cases as you can see from the graph from the 2018 Global Business Ethics Survey conducted by the Ethics and Compliance Initiative, while misconduct is reported, little if anything occurs, and the misconduct, fraud and unethical behavior continues.
If a corporate culture does not foster ethics, employees know reporting misconduct might cause retaliation, as they’ve observed what happens to those who do. The survey clearly shows that on one extreme the few employees who did report misconduct were not satisfied with the results from their reporting. In more ethical corporate cultures employees feel valued and are encouraged to report misconduct because those efforts are taken seriously and they are confident the issues they raise will be addressed.
While it’s not always easy to do the right thing in the fast pace and complexity of today’s business environment, making ethical decisions affects the bottom line, as we have seen from the recent and on-going Wells Fargo situations. And the value of companies having more ethical corporate cultures is also reflected in the stock price, with The 2017 Great Place To Work Institute Report noting the stock price growth of the 100 firms with the most ethical cultures outperformed the S & P 500 index by over 50%!
There is a paramount need for ethical corporate cultures and more favorable outcomes, yet the process of instilling the how to’s are often challenging. Enter an amazing company called Convercent, the leading global provider of modern compliance management software. Launched in 2013, it provides cloud-based software to help companies with their ethics and compliance functions. I spoke to a conference of their employees in Denver just this last week and had an opportunity to meet their key people and employees.
The company has 680 corporate customers with close to 7 million employees in 150 countries accessing the Convercent platform. Their customers range from Kimberly Clark to Microsoft, Capgemini and Under Armour. Convercent has built a revolutionary ethics toolset which will allow companies to move dramatically to the right on the ECI graph, enabling companies to manage and generate more ethical corporate cultures.
It’s an incredible story. As their website tells us, the Convercent Ethics Cloud Platform has a helpline that provides employees, vendors, and customers with different communication channels where they can report issues, allowing them to actively engage in identifying ethics and compliance issues and promoting ethical corporate culture.
The platform offers a case management tool which makes it easy for investigators to capture all information related to the reports, and perform tasks to promptly respond to such such issues and cases. It lets users visualize disclosures and incidents through the aid of customizable dashboards and heat maps so that they can pinpoint risk areas, review violations, identify behavioral factors, and conduct root- cause analyses. Last but not least, it permits users to extend their ethics and compliance processes and goals to third-parties that they are partnering with.
The cloud-based tool kit focuses on four primary functions, a helpline, campaigns, disclosures, and an interactive code of conduct.
Patrick Quinlan, Convercent’s CEO, wanted his employees to understand the anguish and extreme emotional distress which company employees reporting misconduct often feel so that his employees could be sensitive and supportive in dealing with and creating interfaces with those reporting employees. This annual employee meeting, called Heartbeat19, brought together all of their key employees from around the world to discuss how the company can truly walk their talk with regard to ethics and compliance in their own organization.
Patrick wanted a whistleblower who had experienced retaliation to convey how critical the first interface with the customer’s employees is, and for the reporting employee to feel that they were safe in sharing their information. He wanted them to understand from someone who had been through a whistleblower experience the sensitivity needed toward the anguish which is always felt by an employee who realized there was an issue they needed to report.
I also told the employees about the need for ethical corporate cultures and how not having one can directly impact the company’s bottom line. I explained what “accounting control fraud” is and how a desire for profits and incentives at all costs can cause greed to overcome ethics, which occurred at Wells Fargo and Citigroup among many others.
I emphasized how in anyone’s career an employee could be asked to do something that is uncomfortable and borders on misconduct. And I noted that it is more than ok for the employee to question what was asked. But if that is frowned on maybe that’s not the right company fit for the employee, and the employee should consider leaving.
We know that what gets measured gets done, and I was impressed by the toolkit the company has to measure ethical behavior. A Convercent Ethics Dashboard is designed to provide metrics about how well a company is complying with a set of internal guidelines. The cloud software includes components to enable employees to safely report bad practices going on in a company such as bribery, corruption, sexual harassment and more. A more automated API driven system pulls in data from a variety of internal systems and analyzes that for ethical gaps.
CEO Patrick Quinlan says there is a real cost for behaving badly both in terms of dollars and reputation. He believes that it’s in a company’s best interest to stay on top of undesirable behavior before it spirals out of control.
He’s pointed out whether it’s the diesel scandal at Volkswagen or the sexual harassment revealed by Susan Fowler at Uber, it has changed the conversation about ethics. He says it’s no longer just about bottom-line financial results, how you behave as a company matters too in the court of public opinion and in financial markets.
“Sometimes you have this interactive code of conduct, where there’s a new vice president in a region and suddenly page views on the sexual harassment section of the Code of Conduct have increased 200% in the 90 days after he started. That’s easy, right? There’s a reason that’s happening, and our system will actually tell you what’s happening,” he’s explained.
He says trend reporting like this can help a company spot a problem before it spirals out of their control. In other cases, it may be more subtle, but Convercent software can pick up less obvious trends as well.
With programs like this, a company can’t hide behind excuses. What is encouraging is that the Convercent tool kit enables companies to be more ethical. It helps whistleblowers and victims and eliminates excuses as you can now streamline your ethics and compliance issues and, as the company says, operationalize your values.
Proud to have spent time with them.
Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.
