Freeman Cebu Business

Joining government’s anti-corruption drive

INTEGRITY BEAT - Henry J. Schumacher - The Freeman

I was impressed last Thursday by no other than the new ‘Anti-Corruption Czar’, Justice Secretary Menardo Guevarra: I sent him a corruption case and he immediately responded, advising me about the next steps to be taken.

With government taking anti-corruption more seriously now, I think that we have to be aware that in corruption it needs two to tango: the government official who takes and the private sector person who is ready to give.

While we always complain about the ‘corrupt government agencies and their practices’, it is time now to get the house of the private sector in order too.

Actually, we have to admit that there is still plenty of bribing going on between companies and individuals in the private sector. It is time that the private sector – companies and individuals – are punished when being caught in both acts: bribing government officials and bribing people in companies.

In other words, when we in business talk about competitive advantages, building and maintaining an ethical culture must be part of the agenda. The private sector has toestablishan ethical culture in practice.

What is the difference between ethics and building a culture of trust?

Ethics are a set of principles. An ethical culture is a culture committed to pursuing those principles — and sometimes the pursuit of those principles leads an employee to take actions somebody else might dislike. Perhaps the employee reports suspicions of misconduct, involving bribery or collusion in competition or mismanagement of data privacy.

Either way, the employee needs to trust that the company will support that decision to step forward.The apparatus of a corporate compliance program—the training, the internal reporting systems, the Code of Conduct, the due diligence procedures; all of it—should work toward the goal of a strong sense of trust within the organization.

When you view “building an ethical culture” from that perspective, suddenly several tasks rise to the top of the priority list. 

For example, as much as we all love a strong internal reporting system, most employees report their concerns to managers. Most employees also take their cues about how to behave from managers. Consequently, training managers about how to weave ethical standards into the company’s daily routines is critical.          

Formal training will always be important; employees will always need to know what the law says about bribery, or privacy, or collusion, or whatever else comes along. Culture, however, is much more than training, full of informal practices, norms, and expectations. Therefore, ethics and compliance programs must work with middle managers on what those practices, norms, and expectations are, and how to base them on the company’s ethical principles. That’s where you win or lose this battle. 

Senior leaders have a crucial role in building an ethical culture too since they send the signals about the corporate culture that people in operations translate into daily routines.

Let’s look at three ways you can build an ethical culture:

1. Develop clear ethical values—honesty, respect, fairness; whatever fits your organization. Talk with senior leaders and the board about what those values should be. Put them in the Code of Conduct, in a place of prominence so that every employee is aware of it.

2. Develop clear training materials based on those values. Create real-life scenarios that employees might encounter, where the resolution shows how ethical conduct is the higher priority than commercial success. 

3. Refine your internal reporting system to assure the confidentiality of whistleblowers. Someone who does report an allegation to a hotline (or some other system that circumvents his or her manager) has a fear about doing the ethical thing. He or she needs to trust that the company will protect their identity—that is, they need to trust the system. They need to see that your internal reporting system is trustworthy.

Those are only a few examples of what building an ethical culture entails. It’s long, painstaking work, that relies on communication and collaboration but that’s how you get to an ethical culture.

Feedback is welcome; please email me at [email protected]


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