Ethics and compliance professionals are finding themselves thrust into company conversations about race, equality, and fairness, and they are having to figure out what is the appropriate role for the function.
The expectations of ethics and compliance programs have not materially changed since the advent of the recent movements for social justice and racial equality, as a good ethics and compliance program has always been expected to foster equity, transparency, and a commitment to integrity.
What these movements have done is change the way these topics are being perceived and discussed, and that increased awareness is serving as a reminder of how important it is to be transparent with stakeholders in whatever actions are being taken, Antonio Fernandez, the chief compliance officer and chief privacy officer at PSEG, said during a recent LRN webinar on how to talk about race in the office.
And the stakeholders may be people E&C is not thinking of, he said, using as an example an investigation into #MeToo allegations. The stakeholders in that case extend far beyond the parties involved.
“With somebody going out there and putting a hashtag on their own personal experience, now your program has hundreds, thousands, of stakeholders who you never knew existed,” said Fernandez. “People that are following that hashtag, that are looking to see what that person said about your company.
“I don’t know that programs themselves have had to materially change, but it’s sort of., ‘You need to step up your game,’ if you will, to make sure that what you are doing is serious, and you’re really, truly living up the commitments you’ve made to employees and others,” he said.
At a recent Knowledge Roundtable held by LRN in conjunction with Consero, one of the compliance professionals who participated in the event--and who won’t be named because Chatham House rules were in effect--said they was unsure how much E&C should lead on this issue, as there were others with greater expertise.
“I feel we are not the experts in that area, and I think a lot of companies are still struggling with proper response from CEO all the way down,” the person said. “While I am very attuned to those issues, and empathetic of those issues, and want to champion those issue, I did feel me and my team weren’t subject-matter experts in DE&I, and had to think at it more holistically and make sure we were addressing employees’ questions and concerns.”
But another compliance executive said while it may not be the topic in which they are an expert, E&C has a big role to play in incorporating DE&I into the culture of the workplace. That means reconceptualizing what ethical culture is, what it includes, and making DE&I a key pillar of that, and also rethinking the idea of speak-up culture.
The current approach to speaking up is too simplistic by asking “If you see something, say something.” From a DE&I perspective, that is missing the boat, the person said.
“It places the burden on the vulnerable reporter to speak up in the face of power differentials without regard to their personal background and relationship to authority, conformity, and all the various factors that are going to present as a very big mountain for them to climb,” the executive said.
E&C can work to help shift the conversation and work to build an ethical culture where there is an open and ongoing conversation about how to do the right thing.
“It’s not about pointing out someone as doing something bad, it’s all of us exercising that we we want open dialogue,” the executive said. “We want to learn, we are not going to take it personal, you are not going to offend me if you say something, and really emphasizing the psychological safety of cultures.”
New guidance suggests how companies can better align compliance and risk.
Does there need to be a business case for diversity?
The U.K. is considering legislation to keep food connected to illegal deforestation from being sold in supermarkets and restaurants.
How one company used behavioral science to improve its code of conduct.
The SEC whistleblower program paid out $175 million in awards in fiscal 2020.
Amii Barnard-Bahn on how to identify pay inequity at your company, then fix it.
About the Author
Joined LRN in October 2018 after 30 years as a journalist, including seven years at The Wall Street Journal, including Risk & Compliance Journal and was a creator of the WSJ Crisis of the Week column. In 2015 was named one of the 100 most influential people in business ethics by Ethisphere Institute. Spent 14 years as a reporter in Hawaii, 11 with The Associated Press.More Content by Ben DiPietro