No surprise here—managers exercise great influence on employee attitudes and behavior. They play an essential role in creating, nurturing, and sustaining an ethical culture and an ethical workforce. Regulatory agencies acknowledge that fact, and they will scrutinize management practices, from time to time.
For example, the U.S. Department of Justice and U.S. Securities and Exchange Commission, in A Resource Guide to the U.S. Foreign Corrupt Practices Act, consider one hallmark of an effective ethics and compliance effort to be commitment from senior management, as reinforced by middle managers. “Compliance begins with the board of directors or senior executives, and must be reinforced and implemented by middle managers and employees at all levels,” it says.
So how do organizations help managers to fulfill their roles as influencers of desired ethical behavior? They do it with a combination of training, communication, and consequences—good or bad.
As the Ethical Institute reported in its Actionable Insights from the 2015 World’s Most Ethical Companies whitepaper, high-performing ethical companies “place a focus on training and empowering managers. These companies appreciate the value of manager-specific training as an ‘increasingly important vehicle for disseminating culture throughout an organization;’ 80% [of Ethisphere’s ‘world’s most ethical companies’ (WMECs)] report that their managers have a high-likelihood of receiving ethics and compliance-specific training” (Ethical Advocate, 2016; Ethical Institute, 2015).
The Actionable Insights whitepaper goes on to say “although all companies are increasing the amount of compliance- and ethics-specific training to middle managers, WMECs are more likely to allocate … a wider range of resources to middle managers in order to encourage and assist them in more effectively communicating on the importance of acting ethically and addressing staff questions and behavior.”
It also reports, “Companies are increasingly leveraging performance reviews and awards to incentivize employees who engage in ethical conduct or who actively support compliance issues.” Presumably, this includes managers as well.
Some companies spell out their managers’ ethics-related roles. For example, the FedEx Code of Business Conduct states:
All FedEx managers must have a strong sense of integrity and are expected to behave in an exemplary and truthful manner. If you are in a management position, you have a special responsibility to conduct yourself in a manner that is consistent with the principles set forth in this Code. You serve as a role model for your employees and your actions are both seen and emulated by those who report to you. The tone you set in your everyday actions is the single most important factor in fostering a culture where your employees act in compliance with the principles set forth in this Code.
It elaborates …
As a leader, you must:
- Make sure those who report to you have read and understand the Code
- Exercise appropriate supervision and oversight to ensure compliance with the Code within your area of responsibility
- Anticipate, prevent and detect compliance risks
- Promptly report and address any compliance violations or weaknesses, including taking appropriate disciplinary action
- Enforce the Code and related policies and procedures consistently
- Support your employees who, in good faith, raise issues or concerns
- Ensure that none of your employees are retaliated against for making good faith reports
If these kinds of roles are supported with training (“how to do this effectively;” “what to watch out for;” etc.) and established as part of ongoing performance objectives and performance reviews, managers will be able to shine in their role to create, nurture, and sustain an ethical culture and an ethical workforce.
Ethical Advocate provides ethics and compliance training and consultation to organizational leaders. Contact us for information about comprehensive ethics and compliance solutions, including ethics and compliance training and confidential and anonymous hotlines.
Ethical Advocate. “Ethics and Compliance Programs: More Leading Practices,” Ethical Advocate blog, April 25, 2016. https://www.ethicaladvocate.com/ethics-and-compliance-programs-more-leading-practices/
Ethisphere Institute. Actionable Insights from the 2015 World’s Most Ethical Companies. Ethisphere Institute, 2015. Request a copy at http://web.ethisphere.com/worlds-most-ethical/2015-wme-insights-series/whitepaper/
FedEx. Code of Business Conduct and Ethics, September 2014. http://s1.q4cdn.com/714383399/files/code_of_business/BusCodeConduct_english_FINAL-September-2014.pdf
U.S. Department of Justice and U.S. Securities and Exchange Commission. A Resource Guide to the U.S. Foreign Corrupt Practices Act, November 2012. https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2015/01/16/guide.pdf