Compliance and Ethics: Ideas & Answers. Edition 89

Dear friends,

Welcome to the 89th edition of Compliance and Ethics: Ideas & Answers.

This week Adam Balfour shares 3 tips for Policies & Change Management, an essential read for anyone looking to implement policies that stick. Adam emphasizes the importance of understanding current behaviors, engaging stakeholders early, and approaching policies like products to ensure they foster the desired change.

Guest contributor Keith Read discusses workplace retaliation in "Retaliation – The Reality," highlighting the risks whistleblowers face and how retaliation can manifest in both overt and subtle forms. This article underscores the need for active anti-retaliation programs to protect our teams and encourage ethical reporting.

Finally, in our regular feature Compliance Lite, I look back at a memorable case study on predatory behavior in corporate hiring practices. I revisit the cautionary tale of Sears and Montgomery Ward, reminding us that the language we use—and the values we project—matter.

And don't forget, there's more content on our website, so please do visit us there to read our other articles.

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Thank you,

Joe.

Three Tips For Policies & Change Management

by Adam Balfour

Compliance (and other) policies often require changes in human behavior, but a policy alone is not likely to change behaviors. Policies therefore need to be preceded and accompanied by a proportionate amount of well thought and effective change management to help people understand what the changes are and why, and to ensure the change is lasting. Whether the change required is incremental or transformational, the change process should not be overlooked.

Here are three tips for managing the change management process when it comes to policies:

1. Understand The Status Quo: In order to know how much change management is required, you need to understand how the desired behaviors compare to the status quo. This includes understanding current behaviors, asking why those behaviors exist and looking at the context that supports/expects the current behaviors (e.g., incentives).

2. Stakeholder Engagement Before The Policy Is Final: Training and awareness/communications are needed once the policy has been finalized, but that should not be the first point of stakeholder engagement. Engage different stakeholders (including those who will be impacted by the policy, leaders and managers, and anyone who will play a governance/oversight role for the policy requirements) early in the policy development process - ask them questions, hear their perspectives, and get them to help identify potential change management challenges you might not have considered. While time consuming, this can help start the change management process before the policy is even written, and engaged and informed stakeholders who helped to develop the policy might be more inclined to advocate for the policy once it is rolled out and help others with any necessary change management too.

3. Policies Are Products: You won’t see the Sales & Marketing Department launch a new product and think that sending an email or two to target audiences is enough. They will engage in a whole communication and awareness campaign to connect with and educate the target audiences, speak to them in terms of their interests, identify spokespeople or influential voices who can help engage and persuade others, and do so multiple times knowing that this type of change management will help the product’s success. Policies are essentially our products - if you want the policy to be successful, don’t think a single reference on an intranet site or email is going to support the necessary change management.

What other tactics or approaches have others used to help support effective change management when it comes to policies?

Retaliation – The Reality From passive policy to a data-driven active anti-retaliation program

by Keith Read

1. Retaliation – The Reality

The realities of retaliation were first brought home to me by a shocking case that I investigated, in which a senior manager in Singapore had retaliated against a member of their team – a manager based in London – following a whistleblower complaint about bullying.

As a consequence of the retaliation, the manager had a major heart attack – a serious enough consequence of itself, but it did not stop there. The manager’s 13-year-old son, fearful that he would have to change schools if his father couldn’t work, tried to commit suicide.

2. Retaliation, its consequences and legislative developments

The case above is, sadly, just one example of what can prove to be dire consequences of retaliation for whistleblowers, and their families

An array of analyses and reports continue to show that fear of retaliation is the most dominant reason (along with the belief that nothing will be done about the call) why people do not make whistleblower reports. Despite that, it can be easy to assume that retaliation is an employee issue that, should it occur, can be dealt with on a case-by-case basis. However, when people are too afraid to report anything through fear of retaliation then the organisation loses a crucial source of information – remember that research shows whistleblowers identify three times as much fraud as internal audit – and issues continue to fester and increase, people leave, regulators and the media perhaps become involved, and the wider reputation of the organisation suffers.

Because of the risks, retaliation is increasingly featuring in legislation and related guidance – around the world – including the EU Whistleblower Protection Directive and the Department of Justice’s (DOJ) Evaluation of Corporate Compliance Programs (ECCP).

3. Types of retaliation

Retaliation can take many forms; it can take place at organisational, manager and colleague level, and involve both hard and so-called soft retaliation – ranging from discipline, dismissal, harassment, denial of promotion and the loss of a career right through to the soft continuous drip-drip of being excluded, not being invited to meetings or social gatherings and incidents of petty spite, such as locker locks being glued and personal belongings being damaged or stolen. Regardless of type, retaliation consumes the reporter and eventually wears them down. It is arguably a version of gaslighting which is a form of abusive manipulation that makes the reporter (the target) question their judgements, memory, perceptions and reality.

Moreover, retaliation can take the form of a single once-and-done incident, or it can be a series of ongoing incidents, which perhaps involve a variety of forms and perpetrators. Regardless of whether the retaliation involves one or multiple incidents, the result is that the whistleblower becomes unsettled and unnerved as they await the next retaliatory action. It certainly impacts the individual and means that other people will inevitably think twice about whistleblowing.

Continue reading on our website...

“Be Predatory”

Would a senior person in your company write a memo telling your people to “be predatory” about something? Certainly no one would be that dense, would they?

On the other hand, if you have been in compliance & ethics for a while there may be nothing that surprises you. Here is a classic story from the 1990’s when Sears and Montgomery Ward (Ward) were arch retail competitors. Ward was struggling in the marketplace. Within Sears at least some senior people saw this as an opportunity.

In litigation between the two companies, Ward produced an email from Sears that was quite dramatic. In the email a senior level Sears executive encourages hiring away Ward’s people. The email encouraged raids “where the loss of people would hasten [Ward’s] weakening state.” The email was allegedly sent by a Sear’s regional vice president, and encouraged Sears’ people to “be predatory.”

The result? The judge in Ward’s bankruptcy issued a restraining order barring Sears from pursuing Ward’s people and Ward indicated it would seek compensatory and punitive damages.

The lessons? Of course, educate your people about what they do and say There is nothing inherently wrong in hiring people from other companies (Indeed, it is illegal to agree with another company not to pursue or hire their people). But in doing so you need to respect legal protections for confidential information and employment contracts, and your intent should not lead to monopolistic or tortious conduct. In this respect, words do matter. If the impulse of your leadership is to tell people to be “predatory” or “ruthless” or to be a “killer,” it might be good to tell them to get advice from legal counsel first. This is the type of language that gets you in trouble when dealing with judges and juries.

Certainly this is a warning that you cannot rely on mere common sense as a protection for your company.

Cheers,

Joe Murphy, CCEP

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