In recent years it seems as though every time you turn on the television there is another story of corporate misconduct gracing the headlines of the evening news. In 2017 corporate giants such as Uber, Equifax, SoFi, and Papa Johns all lost their leaders when they were forced to resign due to misconduct allegations. The allegations of misconduct ranged from financial fraud to sexual harassment and everything in between.
Due to the current nature of technology, the media, and social connection, every action taken by a corporation and by a high-ranking individual in a corporation has the potential to be examined by the public and officials. Therefore, while ethical behavior has always been important, corporate executives need to better behavior more than ever before. Although it is difficult to hire an executive and guarantee that no misconduct will take place, as a company there are measures that you can put in place to help enforce important rules and regulations.
As a follow-up to the article “A How-To Guide: Protecting Corporate Reputation in Times of Trouble” in our last newsletter, here are some thoughts to help avoid those times of trouble.
Clearly outline ethical expectations for employees and executives
The first and most important action that you can take to reduce corporate misconduct is outlining ethical expectations for your employees and executives. Additionally, companies must take measures to outline consequences for not complying with ethical expectations as well. Having clearly outlined policies makes it easier to enforce rules or take action when behavior goes awry. If employees and executives are held to the same basic expectations, it helps to create a culture of accountability within the company, which also cuts down on misconduct.
Educate employees and executives on the impact of misconduct
Not every case of corporate misconduct leads to the loss of millions of dollars, but it is important for employees and executives to understand the impact that their decisions and behavior have on a business. When outlining basic rules and expectations for employees, be certain to also include why that rule is being put into place. For example, an employee is not allowed to write down credit card information when an order is taken over the phone. This rule is in place because the credit card information could be misplaced resulting in identity theft or fraud for that customer. Educating employees on easily avoided misconduct can help to reduce future allegations of misconduct for your company.
Implement employee and executive monitoring processes
In order to minimize corporate misconduct, there should be monitoring and review processes put into place throughout the entire organization. Reviews of policies and procedures should be conducted regularly as well as scheduled evaluations of each employee. During these evaluations, all corporate policies regarding ethical compliance should be addressed and discussed to help ensure that the employee is educated and is complying with the best of their knowledge. This is also an ideal time to personally remind employees about your hotline.
Create an ethics committee
Ethics committees are most easily recognized in the medical industry, but can also be implemented in other, corporate industries as well. When utilized appropriately, ethics committees work to ensure that the rights of customers, patients or patrons are not violated. They examine the policies, procedures, and actions of the company to make sure that they are legally compliant.
Evaluate the incentives for employees and executives
One of the biggest downfalls of companies that leads to financial misconduct is that they offer performance-based incentives that are not easily attained. Although it does make sense for a company to offer employees incentives based on actions that help the company’s overall performance, the actions should be achievable. Additionally, when a company offers incentives, employees should be required to provide proof that they have ethically met the requirements of the incentives. Helping to determine these incentives is one role that an ethics committee can take part in.
Consider ethics when hiring
Creating a culture of ethical compliance is not an easy task and has to be adopted company-wide. The best way to ensure that the top of the company is on-board for helping to enforce an ethical culture is by heavily weighing candidate’s ethical background and beliefs during the hiring process. Seeking reviews from former employers or co-workers can help to paint a true picture of the candidate’s beliefs as well as questioning them on specific scenarios.
Remember, you can hire the most successful person in the world to run your company, but if they do not have a strong moral compass or your company does not have effective measures in place to enforce ethical behavior, it means nothing. In this age of technology, your company is vulnerable, and you want to be sure to take every step you can in order to guarantee its success.