Michael Toebe shares practical insights from compliance experts on how to establish a speak-up culture (not just a process), why tone from the top alone isn’t enough and how leadership can prove their credibility and commitment to investigating wrongdoing.
Speaking up in the face of problems is not as welcomed and practiced as it could, should and needs to be for the health of an organization and all its stakeholders.
A speak-up culture is not accomplished without its value first being recognized and a detailed plan for accomplishing it being implemented, supported, reviewed, adjusted and carried out skillfully and in a way that employees trust.
“Three key elements are required for competence in running a speak-up culture that produces successful outcomes,” says Daniela Ortega Sosa, an attorney with two decades of experience in governance, compliance and risk management, and who is also a business school professor of Corporate Social Responsibility at Tecnológico de Monterrey.
The first step is “recognizing that your purpose is to institute a culture, not just a process,” she says. “A successful speak-up culture cannot be viewed as an isolated process implemented by the compliance or HR department; it must be consistent and aligned with the company’s corporate purpose and values and be an integral part of the overall corporate culture.”
Ortega Sosa says there is a distinct difference between what this means (and doesn’t) for organizations and their leaders.
“This is why calling it a ‘speak-up’ culture – as opposed to a whistleblower process – is so powerful: because it brings a more positive and constructive connotation to it and makes it easier for employees to understand that it is meant not just to apply to the act of raising ethical concerns, but also to challenge many other issues that may arise in the normal course of business,” she says.
Tone from the Middle
It is often said that organizational leaders must communicate and conduct themselves in a way to model mindset and behavior for employees. A second step to establishing and running an effective speak-up culture is to remember to also “focus on the ‘tone from the middle,” Ortega Sosa says.
“It is common to focus your efforts on the ‘tone from the top,’ but in my view, this is not enough if you want to instill a psychologically safe framework,” she explains.
The space between top-level management and many employees is too distant for that psychological safety to be developed, which is why the focus needs to also be in the middle; it shortens the distance between ‘help’ and people who are willing to listen and who are responsible and compassionate enough to follow through ethically.
Hotlines as a Last Resort
Hotlines are considered by some proponents of a speak-up culture to be one improvement toward creating quicker, stronger awareness of problems that might otherwise not be learned and addressed. Considering such hotlines sufficient and then over-relying on them, however, will likely lead to shortcomings and disappointment.
“You cannot expect to rely only on a hotline to find out about potential ethical concerns,” Ortega Sosa says. “Hotlines are useful and very much needed, but they should be seen by employees as almost the last resort.”
So, it’s but one component of a successful plan – not the engine that drives greater identification of developing problems, those gaining momentum, ongoing conflicts and potential scandals and crises.
As attorney Michael Volkov writes in “What Happens When Employees Stop Speaking Up,”
“In certain situations, a CCO should be concerned that employee-reporting rates on hotlines have declined over time. Such a phenomenon can reflect a serious culture problem in the company – the employees do not trust the reporting system and are not using existing employee reporting systems. Such a breakdown is a significant risk to the company. When misconduct goes underground, the company’s risk profile increases and a culture of misconduct can spread rapidly throughout the company.”
The Vital Role of Middle Managers
While tone from the top is vitally important, leaders from the next level down have powerful capabilities to drive a successful speak-up culture for protective and corrective benefits.
“If well trained, middle management can play a critical role for the success of a speak-up culture. Managers and supervisors are strategically placed to offer a more accessible, informal and trustworthy environment to their team members to raise any concerns,” Ortega Sosa says.
Sharing information is also important to do. Information gathering is not enough, and that might be all that happens without ethical oversight and a plan in place to prevent information being sat on, ignored or hidden. The mere accumulation of findings accomplishes little. The expectation and standard must be to have full disclosure, larger discussions, examination of the discoveries and determination of what is transpiring.
“Provide credibility by sharing results and highlighting lessons learned,” Ortega Sosa says of the third to-do step. “This is such an important element and one that is often overlooked by company leaders because of the fear of inadvertently revealing sensitive data about the case – particularly the identity of the reporting employee.”
While that is a legitimate concern and responsibility, it doesn’t require rejecting the key need to make known the results and conversing about findings: what happened, why and how; recognizing the problems; learning from them; and improving how they are managed or – ideally – solved ethically.
“Without a doubt, disclosing too much information is a risk, but one that can be properly managed by focusing on the facts and the outcome rather than the individuals involved,” Ortega Sosa says. “In my view, the benefits outweigh the risks. Sharing the results with employees in a safe manner brings the opportunity to reinforce the speak-up culture and – more importantly – build trust and credibility on it.”
This commitment brings added value. It creates a humble, continuous learning environment that the best organizations and leaders recognize as important not only to risk management, but also to organizational development.
“Moreover, it allows employees to learn from the situation and avoid similar behaviors, which solidifies the health of the company’s corporate culture,” Ortega Sosa says.
Walking the Walk
Employees, media and the public don’t always get the impression that organizational leaders take ethical concerns and speak-up culture seriously. They get the feeling that any communication about the importance of either is impression management and insincere. However, leaders can, if they desire, hold themselves and their organizations accountable.
“Practice what you preach. The company cannot brag about having a robust speak-up culture and expect to selectively investigate any potential concerns or tolerate the presence of conflicts of interests during the course of the investigation,” Ortega Sosa says, echoing what many frustrated, discouraged, depressed or resentful employees and activists experience.
An organization that is committed to a culture that is professional in conduct can show it with decision-making and follow-up that reflects that mission.
“If the company’s culture is healthy, it should be clear for leaders the relevancy of their role for the credibility of the speak-up culture and the commitment that is expected from them,” Ortega Sosa says.
When shortcomings are present despite best intentions and whatever process is being practiced, there are responses that can prove to be catalysts for improvement.
“Define clear expectations in writing and provide training for leaders,” Ortega Sosa says.
Assumption is the enemy of effective communication, clarity and alignment of directives between leaders and their team. People are empowered when they have the specific knowledge and critical skills to accomplish responsibilities.
As a second response when improvements still need to be implemented, Ortega Sosa suggests defining multiple channels for employees to raise ethical concerns. “In this way, if an employee [who] reports a situation to a leader notices that the leader is not holding himself accountable, the employee may choose to reach out to any other available channel.”
The availability of multiple channels increases the probability of critical information getting through so it can be investigated, examined and evaluated.
Guard Against Retaliation
Ortega Sosa points to another critical commitment and duty as well: protecting employees against any instance of potential retaliation. When that protective layer and covering becomes nonnegotiable and consistent, cultures can vastly improve, psychological safety emerges or increases and loyalty becomes more probable.
Without protection however, perpetrators know the risk is low to experience consequences of misbehavior and abuses. “We need to recognize that retaliation happens even in the presence of the best corporate cultures. To avoid the risks of undermining your efforts to maintain a speak-up culture, it is important to sustain a clear policy against retaliation and to monitor for any instances of noncompliance,” Ortega Sosa says.
Exhibiting risk management and leadership in this way earns respect. It is an act of duty and compassion that becomes a reliable builder of credibility, trust, relationships and reputation and acts as high-quality insurance while also building responsible, honorable cultures.
A speak-up culture can only be constructed and improved (and can only thrive) when it is valued, when it is considered a priority and when it moves beyond words to a must-have practice, always present and working.
“Compliance programs, like any form of culture change, need to be driven,” writes Calvin London, founder and principal consultant at The Compliance Concierge. “Setting up a program and not driving it can result in employees adopting a level of complacency. Employees need to feel that if they are going to buy into a speak-up culture, they are not alone.”