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, OCTOBER 11, 2022

The Real Cost of a Product

When we buy a gallon of milk, we pay for more than the milk.

The seller is passing on other costs, like packaging, transportation, milking equipment, etc.

As climate change approaches a breaking point, it is time to factor in other costs, such as greenhouse gas emissions and water usage related to the product.

We can no longer simply pay for the cost of making a product that is damaging the environment. We need also to pay for the associated cleanup costs.

Responsible companies will do this on their own, because it is the right thing to do.

And because governments are likely to get it wrong.

SATURDAY, OCTOBER 1, 2022

Adding Ethics Posters in Your Facilities Can Increase Reporting

It’s election season in the United States.

Driving around your neighborhood, you would notice several small signs, planted in front yards, showcasing the names of citizens running for office.

While you might think that these signs are a waste of money (in the sense that they would not influence your vote), a study showed that they in fact can increase a candidates’ vote shares by 1 to 2 percent.

This fact got me thinking about the ethics and compliance posters that my company uses in our facilities around the world. The posters include the pictures of the local, regional and global ethics and compliance officers that support each specific facility. It also includes their phone numbers, along with the phone number for our confidential reporting channel. Could these posters, like the political signs, increase the percentage of employees reporting wrongdoing? I think so. By 1 or 2 percent? Hard to tell.

But whatever the size of reporting increase, these posters are worth it. If your organization doesn’t use posters, consider creating them. And as this NPR article suggests, keep the message simple to maximize impact.

SATURDAY, SEPTEMBER 24, 2022

The Whole Truth

My advice to employees who report wrongdoing to their ethics and compliance officer: tell the whole truth.

If you leave something out, it will affect your credibility. Once your credibility is affected, nothing you said, or will say, can be taken for granted.

The ethics officer you hoped would be your partner in righting a wrong will now have to doubt you every step of the way. Furthermore, she may lose some of her appetite to fight your fight.

If some of the facts are not helping your case, you should still disclose them up front. Don’t let your ethics officer find out from someone else.

TUESDAY, AUGUST 30, 2022

Bad Ideas

I probably come up with 10 bad ideas before I have a good one (if I’m generous to myself).

Chances are, our colleagues do no better. So for good ideas to surface at work, we need to welcome bad ideas.

What is your organization’s appetite for bad ideas? What happens to people when an idea, a project, or a big initiative doesn’t work? In some organizations, they throw a party to celebrate the lessons learned. In others, heads roll.

How safe is it to have bad ideas where you work?

MONDAY, AUGUST 29, 2022

Show How Much You Care

If you ever faced a personal crisis, you remember how unhelpful it was when a friend said “Let me know if I can help.”

Well-intentioned, but unhelpful. It just added on more task on your overwhelming list. What you needed was a friend who said “Our family is going out to dinner and we’ll take your kids along so you can have a couple hours of quiet time.”

At work, when your team is struggling to meet a critical objective (financial or otherwise), asking them to let you know if they need help is equally unhelpful. Unhelpful and potentially dangerous. They might think that you care about the objective but not about how they will meet it. What they need to hear from you is “Let’s get in the conference room and figure out exactly how we are going to meet this goal the right way.”

THURSDAY, AUGUST 25, 2022

How Good Ideas Surface

I don’t know who said it first, but having a healthy speak-up culture does not only serve the compliance function.

When employees feel comfortable enough to raise concerns, they usually feel comfortable enough to share good ideas.

A good idea often brings disagreement. It disagrees with the old way of doing things, and some people are likely to disagree with the new idea.

We need organizations that can live with disagreements. As the world changes (and it always does), the faster new ideas are welcome, the more resilient is the organization.

Building a speak-up culture may be the most important thing we can work on.

WEDNESDAY, AUGUST 24, 2022

Collaboration

When two companies announce a merger, competition and securities laws prevent them from collaborating in almost every way until the merger is closed.

Ethics and compliance professionals are one exception. These pros from both companies are allowed to collaborate pre-merger, so that on Day One the new company can have a unified set of values, a common code of conduct, a standard way of reporting and escalating allegations of misconduct — among other things.

This is allowed because E&C professionals from different firms don’t compete, even within the same industry. The nature of our work is intended to be cooperative. Yet, so few of us actually reach out to one another to learn and grow.

If antitrust laws allow us to collaborate pre-merger, why aren’t we collaborating even more on a regular day?

TUESDAY, AUGUST 23, 2022

Give and Take

Are you an ethics and compliance officer tackling something for the first time? A code, a policy, a training, an audit – anything?

The rest of us are here for you. Chances are, hundreds of us have done the very same thing before, and we could save you a ton of hassle. All it takes is a few minutes on LinkedIn or Twitter or ECI Connect to ask for help.

But if what you’re doing is truly novel and has never been done, then please share the learnings with the rest of us.

All of us are smarter than anyone of us.

MONDAY, AUGUST 22, 2022

Every Opportunity Counts

Nearly 75 years ago, Dale Carnegie reminded us that every interaction we have with another person leaves them either a little better off or a little worse off.

Applied to business, we are reminded that every decision we make either brightens our image as an ethical leader or dims it.

WEDNESDAY, AUGUST 17, 2022

Whose Responsibility is it Anyway?

Too many business leaders delegate compliance to the corporate lawyers. These leaders tolerate rules as necessary and undesired limits to accomplishing their goals.

Meanwhile, the lawyers know that doing the right thing is everyone’s responsibility.

Where do you fit on that spectrum?

TUESDAY, AUGUST 16, 2022

What’s in a Name?

The World Health Organization just updated its guidelines to name newly discovered diseases, viruses and variants.

The goal is to avoid negative impact on people, places, tourism and trade. It turns out that when you give a virus the name of, say, “Spanish Flu”, it doesn’t do much good for Spain and Spaniards.

Do you work in an organization where names are given to special compliance initiatives or projects? Do you use vague code names like “Project Maple”, or specific last names, geographic locations, or business unit names? If the latter, have you considered the possible negative impact on the employees covered by these labels?

THURSDAY, AUGUST 11, 2022

If They Knew

What would your mother think?

What if it were on the front page of the newspaper?

These two integrity tests apply strong emotional pressure.

But here’s a more subtle test, one that we can use for most interactions:

If the people you’re interacting with discover what you already know, will they be glad that they did what you asked them to?

Seth Godin, The Practice, #36

MONDAY, AUGUST 8, 2022

Investigations and Trust

For Ethics & Compliance professionals, internal investigations are routine.

But for the average employee, they are not. Anyone participating in an investigation, either as a source, subject, or witness, will count the experience as one of the most emotionally-charged events of their career. They will remember where they were when the got the call from the investigator, and they will remember how nervous they felt when they entered the small, windowless conference room.

Investigators must therefore be as professional, fair, and kind as possible. In most cases, the employees they interact with will continue to work for the organization after the investigation, and they will share that experience with others.

Every investigative interview must be seen as an opportunity to build trust.

TUESDAY, AUGUST 2, 2022

Catch a Possible Offense Before it Reaches Your Customer

Another songwriter is going back to the writing board for using an offensive term in a song.

This story reminded me of the importance of diversity within E&C when creating policies, training and various communications.

A diverse creative team is more likely to notice what could be considered offensive, not simply what is missing. If your company operates in multiple regions and languages, send a copy of your text to locals and native speakers before a mass distribution. And if your company has employee resource groups (ERGs), send them a copy as well. If you have unintentionally committed a faux-pas, they will let you know.

SUNDAY, JUNE 26, 2022

There’s a Process for That

You can send an email to a new employee with a list of online course they need to complete, or you can meet face-to-face.

You can send a link to the corporate policy manual, or you can create job aids that ensure compliance with the policies.

You can write a code of conduct that reads like a bunch of rules, or you can describe the values you live by and the behaviors that go along.

You can keep the outcome of your investigations secret, or you can explain your rationale and show a fair and consistent process.

It should be clear that different processes lead to different cultural outcomes.

If you want a better culture, follow better processes.

If there is any part of your culture you don’t like, find the process responsible for it – and change it.

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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