The role of the Chief Ethics and Compliance Officer (CECO) is constantly evolving, especially as ethics and compliance become increasingly essential. Most can agree that the majority of CECOs’ work focuses on prevention, but the conversation gets heated when discussing the CECO’s role in a company’s recovery from an ethics breach.
Kathleen Edmond, partner at Robins Kaplan LLP, and The Network’s own Vice President of Training & Communications, Julie Moriarty, discussed in a webinar earlier this year what a CECO should do in the aftermath of an organizational ethics breach. Kathleen built and ran Best Buy’s Ethics Office from 2004-2014, and is known for her groundbreaking initiatives in using communication and social media to create connected, ethical cultures.
Kathleen emphasized that a plan for prevention is not enough. The most important part of a CECO’s job is to be ready to appropriately and effectively deal with any ethics breach. Companies have disaster recovery plans in place that help teams prepare for power failures, IT system crashes, natural disasters and security breaches. Why aren’t ethics breaches planned for?
In this series, we’ll map out a course for an ethics failure Recover-and-Rebuild Plan that every corporation should have in place.
Before a Breach
Measures taken by the CECO before any potential ethics breach are crucial. Most CECO work is focused on prevention, but relationships developed and actions taken before an event determine how effective CECOs will be after it. A CECO’s “brand” is built before any lapse in prevention. Learning the ins and outs of the organization – fully understanding the industry, knowing the organization’s culture and risk tolerance, regularly assessing policies and the ethics & compliance program and determining the state of corporate culture – will help CECOs make fitting decisions and more quickly rebuild trust in the aftermath of an ethics breach.
Establish Strong Working Relationships
The compliance function should always aim to build strong relationships within and outside of their own group and that is particularly true for the CECO. The goal is to interact with employees on a regular basis so they become comfortable with her and don’t only associate her presence with to bad news. Rather than staying locked up in an office all day, CECOs can make rounds in the office, talk to employees about their concerns and announce good news in the industry. When big ethical scandals make front page news, the CECO can discuss why that happened to that company and how your company is mitigating the risk of something similar occurring.
Creating a learning culture before any negative event happens, sets up the organization for a successful recovery. In order for a major organizational ethics breach to be viewed as a learning opportunity, CECOs have to set a precedent of talking through mistakes and approaching each as a chance to learn.
Naturally, people don’t like to elaborate on their mistakes – especially not with their bosses. Engaging employees in this type of discussion isn’t an easy task. Establishing criteria and forums for reviewing ethics failures can help CECOs keep the process under control and take a little edge off a tense topic.
Finding and utilizing methods that takes a little bit of the sting out of failure make employees less likely to hide their failures. Setting the tone now, before any breach or disaster occurs, makes it a status quo part of how your company operates, and gets employees used to discussing uncomfortable matters. The CECO has a responsibility to facilitate and moderate respectful, productive conversations. After a major ethics breach, a time of extremely high tension, CECOs will be able to fill the role of facilitator and moderator they created for themselves.
This post was contributed by our Research Intern, Kendrick Addaman.
You can download Kathleen’s slides and the recording of the webinar here to hear the 5 Post-Event Steps, or you can stay tuned for the next blog post in the series.
Want more tips on how to prepare your compliance department against any hardship? Download Tom Fox’s whitepaper How Compliance Should Prepare for and Respond to Economic Downturns to make sure your compliance function can remain effective in any climate.
Share Your Thoughts With Us
Does your organization have a plan in place? Have you ever had to endure an ethics breach? How did your company recover? What did you learn from your process, and what would you do differently? You can join the conversation by commenting on the blog or messaging us on JDSupra.
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