These last two weeks have been a whirlwind of presentations in Ireland for Transparency International, The Institute of Banking and the National University of Ireland. I learned firsthand about the Irish spirit and determination, enjoyed its great people and the beauty of the country.
It was an honor to address groups who are so focused on stamping out corruption, in business, government and banking. They were so warm, transparent and enthusiastic in promoting ethical behavior.
It was a pleasant surprise to hear the term “stakeholder” repeated over and over – allowing for everyone who has a voice in the success and ethos of business to be involved, as compared to our U.S. tradition of focusing on shareholders, which has led to greed and corruption as we strive to continually increase profits for their benefit.
My first presentation was for the Ireland chapter of Transparency International (TI), for which the annual conference theme was Integrity In the Workplace; with an overall goal: to create and maintain integrity in the workplace.
Representatives from over 70 organizations in the public, private and non-profit sectors attended the conference to share experience and insights on supporting staff to act with integrity.
Transparency International’s vision is challenging and I highly respect their efforts: One global movement sharing one vision: a world in which government, business, civil society and the daily lives of people are free from corruption. With more than 100 national chapters worldwide the organization works with partners in government, business and civil society to put effective measures in place to tackle corruption.
A tough assignment when you consider the unprecedented instances of fraud and corruption throughout the world.
According to TI Ireland Chief Executive, John Devitt, “Recent scandals in Ireland’s banking, policing and energy sectors have highlighted the damaging consequences of ethical misconduct. It’s important that employers from all sectors foster ethical leadership for the benefit of workers, stakeholders and the public”
In my talk, I mentioned several key findings from The Ethics and Compliance Institute which had surveyed companies and their employees around the world. The employees were asked two questions, did you see and report misconduct at the office, and if you reported misconduct, how satisfied were you that you did so?
I highlighted the need for employee feedback in fostering an ethical culture.
In companies with strong ethics programs, 93% of employees reported misconduct and 94% of those who reported misconduct were satisfied with the outcome. It is clear that employees of these companies felt that management genuinely valued and encouraged employee feedback and acted to address situations where company values were not upheld. They knew that management wanted and expected employees to give them feedback, to tell them of anything which wasn’t right. After all, if management truly wants to know what is going on in a company, they ask the employees.
By contrast, in companies without ethics programs, only 34% of the employees reported misconduct and only 20% of employees who reported misconduct were satisfied. Why, I asked; well they were retaliated against, demoted, transferred, or ostracized. As a result, employees at these companies saw what happened to their colleagues and didn’t want to suffer the same treatment. These employees knew that management really didn’t want employee feedback.
It’s clear that ethical breaches are addressed more effectively when employee feedback is actively encouraged.
That is the way it is supposed to work yet rarely does. I asked where they were as a company/association; one whose employees are afraid to tell the truth, because they know the consequences? Or a company that applauds and rewards truth-telling?
I asked, do your employees genuinely feel that they are valued by management? That management cares about them and truly wants their feedback, and they know if they do report something that they observe that management will show appreciation, they will take the time to talk with them and understand the circumstances. And they will not incur negative consequences.
And I talked about the steps to creating an ethical culture and how ethics and transparency starts at the very top – It is not just ‘do as I say, not as I do.’ I asked that this be a genuine experience and an important part of the company culture.
Another of TI’s speakers, Amanda Shantz, Associate Professor of Human Resource Management, Trinity Business School, discussed the findings of her award-winning research: ‘Building an Ethically Strong Organization.’
She said, “Two essential ingredients to ethical leadership are a strong vision and a deep commitment to stakeholders. In our survey of 1,557 employees and managers, the majority of respondents (43%) said their leaders fell short in these areas. To bring about lasting change, organizations must hire and cultivate leaders at all levels who promote ethical behaviour.”
It was also a pleasure to meet and talk with Dr. Jack Poulson, who was a research scientist at Google whose work on machine learning was used to improve Google’s search results. Dr. Poulson left the company over its Project Dragonfly, a once-secret plan to launch a censored Chinese search engine. He called the move a “forfeiture of our values.”
It was truly an honor meeting the team at Transparency International Ireland and learning more about their strong efforts in combatting fraud and corruption.
Building an ethical culture doesn’t mean you have to reinvent the wheel.
It’s about respect for the employees, the community and all stakeholders, not just shareholders.
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.
