A senior writer at AECOM Technology Corp reports some tips from a recent NYSE roundtable
At a recent NYSE Governance Services thought leadership roundtable hosted by AECOM in Los Angeles, Eric Morehead, senior compliance counsel at NYSE Governance Services, spoke about the need to strengthen a culture of ethics and compliance within companies by setting the appropriate tone in among middle managers and employees, in addition to establishing the right tone among the company’s senior leadership.
Morehead offered the following points to help legal professionals promote a tone from the middle:
- Equip managers after training with the right resources and provide incentives to reinforce their participation in ethics and compliance. It is necessary to arm managers with information about the importance of fostering a ‘speak up’ culture and open lines of communication. Training need not be specifically about ethics and compliance and is often integrated into training sessions for new managers. Most organizations have a ‘manager toolkit’, which can include non-retaliation messaging, anti-corruption training, and code of conduct discussion points, among other resources for managers to incorporate in their reports.
- According to an Ethics Resource Center study, the most important conduit for the reporting of ethics and compliance issues is through managers. The study indicates that employees prefer reporting unethical activities to managers or to an immediate supervisor. In essence, roughly 5 percent to 8 percent of employees turn to the hotline for help. While the hotline remains a requirement for businesses, employees tend to reach out to their managers instead of filing an anonymous claim. This type of data should be shared with managers so they are aware of their relative importance in the chain of communication.
- Provide incentives: Ethics and compliance should be among the criteria considered in the performance reviews of managers.
- What gets measured gets managed: The success of moving beyond tone from the top depends on senior managers as well. Instead of looking to the compliance office to keep managers engaged, it is seen as best practice to make it an overall business unit directive. Hold senior managers to account for providing both the training and the necessary resources to act on that training to managers and immediate supervisors within each business unit. Then, have senior managers measure the results.
