Compliance &Ethics - Society of Corporate Compliance and Ethics

about to become a headline? And, given theopportunity, what might I suggest they do toanticipate and/or prevent that eventuality?The fourth elementIn the time since that meeting, I’ve continuedto ponder the question of how an organizationcan avoid becoming tomorrow’s headline.It seems to boil down to three obvious, criticalelements and one less than obvious element.It is the fourth element that so many of thosewe read about failed to address. The elementsI thought about include:1. Ensuring that all of your policies, procedures,and practices satisfy the myriadapplicable laws and regulations thatare externally imposed upon yourorganization.2. Ensuring that all of your leadership practicesand operational standards satisfy allof the internally imposed rules, standards,policies, and procedures.3. Ensuring that there is a culture withinthe organization that understands thatadherence to all regulations, practices,and operational standards is the minimumrequirement for success.4. Ensuring that there is a corporate culturethat reaches for the highest ethicalstandards—one that does not settle forconformance to minimal standards.But how can a company that is striving tosucceed in a highly competitive environment,in the midst of an economic downturn, andfighting for market share compete with companieswho do only what the law requires?Doesn’t doing more cost more? Yes, it does,in the short run. But how many of us are in itfor the short run? How many of us work forcompanies that have a self-imposed expirationdate? How many of us work for boardsthat are only concerned that the organization’sinevitable failures not occur on their watch?If the fourth element can be understood asthe difference between short-term and longtermviability, then there is an argument to bemade that boards and others might accept. Butcan we make that argument?In dealing with the client noted above Iconcluded that they had bought into the “compliance”model. They were “hooked” on theopiates of compliance and best practices. Theysaw no merit in the “ethics” model. After all,the law did not require more of them thanthey were already doing.Sadly, they were three quarters of the waythere. They had successfully met the first threeof the four elements needed to avoid becominga headline. To borrow a baseball metaphor,they had reached third base. Their ethics andcompliance program was a model of “bestpractices.” But you get no points for stranding arunner on third. Hitting a triple may look greatin your individual statistics, but it doesn’t countfor much if the team loses because you failed toget the runner home. They seemed willing toaccept that crossing the t’s and dotting the i’s ofcompliance was their goal.How might I have argued for the fourthelement? What might I have said or doneto better communicate the critical value ofensuring that there is a corporate culture thatreaches for the highest ethical standards—one that does not settle for conformance tominimal standards? How might I have bettercommunicated that diagnosis is not a solution?Diagnosis is not enoughDiagnosis helps us understand what is goingon, but it may not always lead us to why it isgoing on—the causes behind the outcomeswe are experiencing. Absent that “why” data,management is forced to rely on guessworkregarding causes. Unless you can access thatdata and then act on it, you have minimalcertainty that the solution at hand is, in fact,going to solve anything.Compliance & Ethics Professional May/June 2013+1 952 933 4977 or 888 277 4977 www.corporatecompliance.org 63