Yan Tougas: The Ethical Leader

Writing as “The Ethical Leader,” Yan Tougas draws on 15 years of experience as a compliance & ethics officer at a Fortune 500 company, sharing insights, wisdom and lessons learned. All posts originally appeared on “The Ethical Leader” and are reprinted with permission. Views are that of the author. Visit YanTougas.com

TUESDAY, JUNE 14, 2022

Culture: The New Competitive Advantage

For many years, the burgeoning compliance community tried to convince corporations that compliance was important. The message finally got across when regulators made it clear that non-compliance was more expensive than compliance.

And now, a new generation of E&C professionals is trying to convince companies that compliance programs, on their own, are not enough and must be augmented by an ethical culture. This message will soon get across, as business leaders realize that investors are losing their appetite for companies that ignore their people and the planet.

Doing the right thing is now a competitive advantage.

SUNDAY, JUNE 6, 2022

Would You Quit Over This?

Should you quit your job if your legal or ethical advice is not followed?

Usually not. In a company, lawyers and ethics officers are often viewed as advisors. A CEO is always at liberty to proceed against their advice is she so desires. If a lawyer advises against opening a satellite office in South Soudan because of corruption concerns, the business is free to proceed. And the lawyer should not necessarily quit.

But sometimes advisors need to fire back. This week, nine members of the Ethics Board at Axon resigned after the company decided to move ahead with its plans to develop Taser-equipped drones for police forces, against the Board’s recommendation. The resignations paid off, and the company’s plans were halted.

I admire the bold move. It was the only move left to protect the company from making a grave mistake. Think back of previous scandals, and many could have been avoided if those who silently spoke up internally had made a noisier public exit (Note: I am mindful that noisy public exits can also be costly for whistleblowers).

A part of me hopes that we see more of these courageous acts in the future. Another part worries that companies might simply stop creating ethics advisory boards.

SUNDAY, MAY 31, 2022

Not an Overnight Change

Culture will not change right after we announce our intention to change it.

That new action we believe will improve the culture, we’ll have to perform it repeatedly over years, until people believe that “this is how things are really done around here.”

If the percentage of female executives has been below 10% for ages in our company, and we announce an intention to do better, will women believe us if the percentage jumps to 12% the next year? Probably not. But if it steadily climbs every year and settles at 50% for a long period of time, somewhere along the way the culture will shift.

The same idea applies to how we change any aspect of the culture – how transparent we are, how inclusive we are, how much we support each other, and so on. It requires that we pay attention, that we listen, that we have a clearly-stated and meaningful goal, and that we take massive and sustained action.

SUNDAY, MAY 27, 2022

Please Steal From Me

If you are going to punish someone for bad behavior, you need to make sure that the punishment will deter similar behavior in the future.

Which is why the recent $150M fine on Twitter seems inadequate. The fine was imposed because Twitter, for 6 years, sold its users’ personal information to advertisers without the users’ knowledge or permission, just after promising the regulators (in 2011) that they would not engage is such practices.

During those 6 years (from 2014 to 2019), Twitter had gross profits of over $10B. Twitter doesn’t charge users for its services, so the vast majority of its revenue comes from selling advertising. This fine took away less than 2% of Twitter’s profits. I don’t call this a deterrent.

If someone stole $100 from the petty cash box and the punishment was to return $2, that employee – and all other employees – might actually be emboldened to do it again and again.

I expect that Twitter & Friends will be back in the news for similar behavior before long.

SUNDAY, MAY 25, 2022

Uvalde

To my friends who are licensed attorneys in Texas, the San Antonio Legal Services Association needs your help.

SUNDAY, MAY 24, 2022

Drag

Drag is everywhere in business.

Every time an employee is unable to produce or sell or make a decision, drag is created.

A good compliance program reduces drag. With a simple code of conduct and clear policies, employees understand what is expected and how to do it.

A good ethical culture is even more effective. By creating trust, employees are willing to take calculated risks, which lead to innovation, which in turn allows a company to outperform its competitors.

Do you know someone who blames the E&C department for slowing down business? Tell them to think again.

SUNDAY, MAY 22, 2022

If It’s Broken, Can You Fix It?

A few years ago, the third brake light on my wife’s Toyota died out.

I went on YouTube, found a video showing how to change that bulb, paid $4 at my local hardware store for a set of two, and installed the new light in less than 10 minutes.

You can learn to fix a lot of stuff on YouTube. The problem we face today is that more and more manufacturers are adopting practices that prevent people from making their own repairs. This is leading to significant environmental waste, at a time when the same companies are touting their low manufacturing carbon footprint.

Check out this interesting TED Talk on the topic. Then look at the products that your company is producing. Are they built to last? Are they repair-friendly? What type of waste will they generate at the end of their life cycle?

SUNDAY, MAY 20, 2022

Metrics That Answer Questions

This post from Seth Godin could have been written for ethics and compliance professionals who regularly scramble to create charts for the next board meeting.

Those charts are often filled with output metrics and lagging indicators that beg more questions than they answer. Those metrics are used because they are easy to track.

If I show you a chart that tracks my daily body weight (output metric), and you notice a trend or spikes, you will immediately ask for details about my nutrition and exercise (input metric). Keeping track of my weight is easy. Keeping track of my caloric intake and outake is a lot more work, but that’s where the answers are.

The next time you look at the chart that tracks the number of calls to your helpline, ask yourself how helpful it is (it’s not, at least not on its own). Then find something useful to measure.

SUNDAY, MAY 18, 2022

Using Policy Summaries As a Gateway to the Real Policy

We all wish that our employees would read our corporate policies, but we know that most won’t.

In response, we often write snazzy policy summaries, and we try to cram all the essentials on one page.

The problem with this approach is that it doesn’t increase the number of employees who actually read your policies.

There is a middle way. You can write summaries that entice, or even force, employees to go to the actual policy for critical information. For example, you can write in your summary that employees can accept gifts under $50 with their supervisor’s approval, but for higher-value gifts, they need to consult the policy for approval levels. The trick is to leave out of the summary critical elements, and to tell employees where to find them in the policy.

Writing policy summaries is great. Writing them in ways that channel your employees to the actual policy is even better.

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