H is for Hot Line
h is for hot lineCopyright © 2018 by Barney Rosenberg President, Ethics Line, LLC™ barney@ethicslinellc.com

Some people in the ethics field are very fussy about what we call our “hot lines”.  They have their reasons, I’m sure.  The range of choices is:

  1. hot line;
  2. call line;
  3. ethics line; and
  4. help line to you name it. No, really, you name it and let us all know if you are aware of others, please.

The system I am most familiar with operates like this.  These are the key things I look for in assessing how well any “hot line” works.  It may be a good checklist:

  1. How do people even know about the “hot line”? The usual ways are posters in all the facilities; references in the company’s ethics policies; and reminders during training.
  2. Internal Audit is tasked with making sure that the posters are placed prominently while they are on-site conducting their financial audits.
  3. Employees and people outside the company are free to call. They are encouraged to raise questions or concerns.  It can simply be “I don’t understand X.  Can you help me?” or “Such and such is happening and it’s wrong/illegal.”
  4. People are encouraged to call if they don’t feel comfortable speaking to someone face-to-face where they work. We can only solve problems that we know about.
  5. An independent, external service provider, based in Europe, with truly global reach, handles the incoming, toll-free calls and/or the web-based service for online questions or concerns.
  6. Their services are available 24/7, 365 days a year…even the extra day in February during leap years.
  7. Their system can recognize the country in which the call originated and they can have a translator available, live, in a matter of a few minutes, if English is not the caller’s first language.
  8. The caller has the option to remain anonymous or provide their name and contact information. If they choose to remain anonymous, an investigation may be a little harder but the operators are trained to get enough information so that the company can conduct a proper investigation.
  9. Anonymous callers are given a unique case number so that they may call back for feedback.
  10. They are told to call back in 4 weeks, by which time it is expected that the company will have findings and recommendations.
  11. All calls are managed centrally in the company and all reports are transcribed and sent to the senior ethics officer who decides who should investigate and report out.
  12. If there are concerns raised about the person who would typically investigate, the senior ethics officer may select someone from outside that business or even outside the division of the company, to assure objectivity and independence.
  13. If, heaven forbid, there should be a complaint about the senior ethics officer, that officer is by-passed and the written report is sent to that person’s manager.
  14. Generally, the investigation and follow up is conducted at the business location by the site’s Ethics Coordinator. In some companies they are called Ethics Ambassadors.  They are the embodiment of the company’s ethics program and are also available to help with training and to generally point people in the right ethical direction.  They have other, full time jobs at the site.
  15. Confidential information, such as HR actions in response to the investigation, are not disclosed. Instead, the caller is told whether their allegations were confirmed or not; that appropriate action was taken; and that they should expect to see results at their work location.
  16. They are thanked for calling and invited to call again if the circumstances don’t improve.
  17. They are reminded that the company does NOT permit retaliation for calling the service.
  18. The company maintains a database of all calls and can generate reports based on the nature of the complaint; the business location involved; the division to which the business reports; the number of cases open and under investigation; and the country involved. Pie charts and all!
  19. On occasion, new policies are required to correct a situation that may extend beyond one location.
  20. An employee engagement survey will give you some insight into how well your system is working.

Your turn.  Care to share how your company does it…if you do?  Thank you.

G is for Global

Copyright © 2018 by Barney Rosenberg President, Ethics Line, LLC™ barney@ethicslinellc.com

Is Ethics training required where you work? A global company I know well requires everyone in the organization to complete certain basic training.  That training includes the company’s Code of Conduct and fundamentals of its Anti-Corruption policy.  There is other training as well, annually, but these are considered the essentials.  That’s part of the reason it is available in many languages. When I say “everyone in the organization” I mean everyone, from the entry level sweeper of the factory floor to the Board of Directors.  We just found it easier that way.  Besides, a certain American politician once spoke about the importance of universal education and how it might not be available to all at the level of quality and substance that would serve the population and the country going forward.  He spoke of the subtle and not-so-subtle factors that led some to write off certain minority groups.  His phrase that has stuck with me was “The bigotry of low expectations.”  So, on the theory that the entry-level worker might, one day, sit on the Board of Directors, why not prepare her/him for the job! One day, I got an email from the Human Resources manager at a certain European manufacturing site informing me that an employee had refused to take the required training.  After a few minutes on the phone, I think I surprised the HR executive when I said: “The employee doesn’t have to take the training.  But s/he also doesn’t have to work for the company!  The training is not optional.” Fast forward a little, I contacted the employee and asked for a meeting next time I was in the neighborhood.  He’s a HE, so let’s just use that pronoun for now.  When we met, he told me “Who is the company to tell me what my ethics should be?  I raised two sons to be fine young men!” I congratulated him on the two lads and explained that raising his kids was not why the training was required.  I said that “In a global company like ours, everyone comes to the workplace from their own family background, lives in far-flung places where we do business, speaks one or more languages, has different life experience, different work experience, and different career aspirations.  What we all have in common is the company and the mission that unites us across those differences.  The training shows us how.” He looked away and said “Oh, I hadn’t thought about it that way.”  We shook hands and said goodbye. The following week, the HR executive shared with me that the employee had successfully completed the required training, without a peep! Have you experienced anything similar?  How did you handle it?  This is where you get to share!    

F is for the other 4-letter "F" word

Copyright © 2018 by Barney Rosenberg President, Ethics Line, LLC™ barney@ethicslinellc.com Allow me a few sentences and I will tell you what that other word is!  I promise. Imagine that you are sitting in your office, logged onto your computer when the emails start arriving and the phone starts ringing.  Some of your co-workers at a manufacturing location are worried about one of their colleagues who has been acting strangely.  They worry that he may come in one day and “go postal” (see explanation * below) and they don’t know what to do.  They don’t know who to tell. The other F word is FEAR! You agree to meet with them after hours, off campus.  Six of them show up and tell you how bad things are.  The words LACK of trust keep coming up.  But FEAR is the biggie! An intervention is called for and you reach out to a psychologist you know and have worked with before.  He specializes in industrial situations and is truly spectacular. Together with the site HR folks you organize a group meeting with 20 front line supervisors and the psychologist.  After introductions and some warm ups, he poses this question: “Suppose during the next performance evaluation cycle you don’t give them their written evaluation on the day of their review.  Instead, you give the people you work with their written evaluations  the night before.  That way they can take it home; read it over; think about it; and come in the next day for a deeper, more productive conversation.” The reaction would have been hard to predict.  “Oh, no!  They’ll just get angry and act out violently!” Turns out they were afraid of the people they supervised. And the people they supervised were:

  1. Afraid of them
  2. Worried about their jobs
  3. Concerned about outsourcing
  4. Hearing rumors about the business being sold off
  5. Reading about foreign competition
  6. Afraid of retaliation
  7. And yes, FEAR of violence

FEAR was everywhere!  And it was palpable. A series of workshops about teamwork began to break down barriers.  People began talking to each other…and listening.  It became an on-going process. Progress was slow but it was progress.  And the employee people FEARed would go postal.  He didn’t.  And the FEAR was unfounded.  He was as worried as everyone else! Any FEAR where you work? What will you do about it?  

  • * “Go Postal” is a reference to an actual event that took place in the USA when a post office worker brought a gun to work and shot a number of co-workers. Sadly, the term has become part of the vernacular.
E is for Ethics
D is for Due Diligence

Due Diligence. It sounds so professional. So significant. It always made me feel that I could just toss it into a sentence and everyone would think I was smart and experienced in such weighty matters. Occasionally, I hear people much less knowledgeable and sophisticated than I am (you can laugh here. I just did.) say “You know before we do that we have to do diligence.” Well they’re not all wrong. Let’s take a close look at what it means. There was a time when I would consult my Oxford English Dictionary. Now it’s pretty much Wikipedia. So here goes: “Due diligence is an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations. A common example of due diligence in various industries is the process through which a potential acquirer evaluates a target company or its assets for an acquisition. The theory behind due diligence holds that performing this type of investigation contributes significantly to informed decision making by enhancing the amount and quality of information available to decision-makers and by ensuring that this information is systematically used to deliberate in a reflexive manner on the decision at hand and all its costs, benefits, and risks.” Pretty good, right. We DO due diligence to look before we leap. We might taste a food or drink before we order it in a restaurant. Or test drive a car. Or do a background check before we hire someone, especially if it’s for an executive role in the business. In our anti-corruption programs we CONDUCT due diligence on intermediaries and potential business partners to avoid bribery, money laundering and other associated bad acts. We think of it as an insurance policy. But checking out people in advance may have gotten considerable harder in the European Union. The General Data Protection Regulation (GDPR) is a regulation by which the European Parliament, the Council of the European Union and the European Commission intend to strengthen and unify data protection for all individuals within the European Union (EU). It also addresses the export of personal data outside the EU. The GDPR aims primarily to give control back to citizens and residents over their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU. At the time of this writing, GDPR is scheduled to become enforceable on May 25, 2018. It does not require national governments to pass any enabling legislation, and is thus directly binding and applicable. Because we are all in this together, I can tell you that I had not until recently considered that GDPR, as currently written, might make it much harder to process criminal background information for purposes of anti-bribery due diligence. So however you DO diligence, this is an area where it has to be done right. Severe fines and penalties await those who fail to give diligence its due! And one more thought. Why wait until an event is on the horizon? Consider building due diligence into the everyday workings of your business. It’s not that hard. Add “ethics” as an agenda topic for meetings and reviews. Even if nothing comes to mind at the moment, it’s a perfect place holder to encourage people to consider the risks. After all, we have chosen to conduct our business the right way – ethically and diligently.

C is for Compliance

OK, this is kind of a touchy point with ethics practitioners.  So I am going to vent a little.  You’ll see why in a sentence or two and then you can weigh in with what you think about it. I was talking to a relatively senior business executive about what I do.  He said, “Oh, yeah, you’re the compliance guy.”  I took a deep breath and started to explain.  “No actually, you are.  Because a failure of compliance could mean someone will go to prison and the regulators and prosecutors will come looking for the most senior person responsible for the conduct of the business.  So, in a practical sense, you are the designated defendant.” I have a little experience with that!  Deep in the last century, I started my career out of law school as a white collar, criminal defense attorney.  Now, I tell people I am a recovering lawyer. Now back to that business executive.  Here’s what I told him.

  1. Compliance is all about rules and regulations. It’s hard stuff because it is often said that ignorance of the law is no excuse.  If you didn’t know the law, you should have known it.
  2. Those rules and regulations govern everything that happens in your business from the hiring of workers, to their retention and training, to the cleanliness and safety of the facilities you operate. It’s the licensing requirements to open the doors for business and keep them open.  The export/import controls on your products.  The taxes you pay.
  3. It’s about technical specifications in contracts to build highly sophisticated products for difficult-to-please customers.
  4. I explained that it’s really hard to keep track of all the requirements in the town or city where you do business. The minute you expand to the neighboring town the laws and regulations change.
  5. Now try moving to a neighboring county, state or province where everything you thought you knew is different.
  6. If you are really successful, try expanding overseas. If you are really brave, consider the UK Bribery Act.  It created a new crime of failing to prevent bribery.
  7. Why do you think serious companies have strong legal departments? And armies of highly qualified lawyers/gladiators waiting for your next misstep. This stuff is hard!
  8. Should I go on?

Well, his eyes were starting to show signs of fear.  So I continued. You see, I told him, I am not the compliance officer.  That’s your job and you hadn’t even thought of it that way.  You thought your job was to make money and deliver results to corporate headquarters. He was shallow breathing at this point but he managed to ask “Then what do you do?” I smiled and said “While I am not the compliance guy, I am the ethics guy…at least that’s what folks call me when I show up soon after their latest on-line training course.” And since you asked, “I can keep you out of trouble or I can get you out of trouble!  What’s your preference?  The cost of compliance is high.  The cost of non-compliance is astronomical.  And then there’s that prison thing! In Ethics, we’re all about values and virtues.  We help set the tone and reinforce the important commitment to doing things honestly, with integrity and with respect for others.  And yes, one of those things is serving as a steady reminder that our company has opted to do things the right way.  When we choose ethics, compliance follows.” As some of you who know me have heard me say, Ethics is a team sport!  We are all in this together! Now it’s your turn.  Ethics?  Compliance?  Are they really that different or just two sides of the same coin?  Where will you draw the line?

B is for Bribery

After a modest dinner with a foreign supplier, you are driving him to the modest hotel you booked for him.  He hops out at his hotel and as he is closing the car door, he says: ‘I left something for you on the back seat.” You’re puzzled but ignore it and continue on your way. It’s only when you arrive home that you remember what he said and you reach into the back seat and take the small package with you.  Your spouse says: “What’s that?”  And you say: “I don’t know.” Then, inside, you find a plain white envelope. ‘Is that what he meant?’ you think. And then you see what turns out to be $10,000 in crisp new $100 dollar bills! inside a Victoria’s Secret shopping bag!  I can’t make this stuff up! Thinking it could not have been meant for you, you take out your mobile phone to call him. But then you pause. ‘Is he for real?’ Before you make up your mind about his intentions, you can’t help but start thinking. That’s a lot of money. It’s bribery. It’s not traceable. It’s a vacation. I’ve got to report this … the thoughts come thick and fast. Before you ask if this is a bad TV show, let me tell you that no, this happened to one of my colleagues. And yes, it really was a Victoria’s Secret shopping bag. At 6 am the next morning, after what was probably a rather restless night, the colleague called me and asked for advice. I had him write down the serial numbers of the bills. We returned the cash and fired the supplier, who loudly proclaimed that it was all innocent.  It was meant to cover a holiday lunch for the workforce at the plant.  Uh huh! Right! It’s a great story because it’s not the kind of thing that happens to any of us every day and there was a very clear choice involved. Cutting a corner to hit a target or greasing our way to lucrative new business might seem tempting in the short term. Offering or accepting a payment like this one is NEVER ok.  A good reputation takes years or even decades to create and only moments to destroy. You may quote me on this:  Ethics is what we do when no one is looking! Think about your company’s brushes with bribery.  What can you say about them?  What can you do to prevent them?

A is for Audit

This is as good a place as any to begin our scan of the ethics alphabet.  Audit and awareness.  Unless we look closely at the impact of our ethics programs, policies and procedures, we are flying blind. There are two basic kinds of audit: internal and external.  Think about how your organization approaches each one. A global company I know very well has a robust set of policies and procedures for its domestic and international operations.  High on the list of ethics priorities is how they manage the shark-infested waters of international intermediaries – sales representatives and distributors.  They can’t be everywhere so why not get some sales help with the selection and management of intermediaries?  Key is to understand the law in the foreign jurisdiction and the corruption risk in that territory.  Document the full terms and conditions of the written agreement.  Make sure you can disengage when necessary.  I wrote the policies for that company.  It’s a challenge, as you know.  Some agreements had been in place for 20 years and no one had looked at them since they were executed! We developed a robust audit protocol to make sure each business understood the serious risks before proceeding; that they documented each step in the process; that they engaged in a cross-functional, step-by-step cautious approach; and that the Legal team was involved along the way.  Checklists were designed and used.  Senior level review was a must.  And performance by the intermediary was carefully considered before renewal.  Keep in mind that in some jurisdictions you must pay substantial fees to disengage from an intermediary.  You may quote me on this:  “Team in haste and repent in leisure!” We engaged outside legal to audit our businesses.  Together, we sent surveys to local company leaders, testing their Awareness of the company’s policies and procedures.  Those surveys were the basis for on-site interviews and helped form a picture of the audit report.  All elements of the report require follow up to completion.  And internal audit helps with the follow-up.  Good teamwork all around. Someone in your organization will ask the obvious question.  Outside counsel are so expensive and their hourly rates are through the roof.  Can’t we do this ourselves?  The answer is you can.  You shouldn’t because the outside expertise gives you a measure of insulation when the regulators/prosecutors come knocking.  It’s not an insurance policy but it can’t hurt and it can be a big help.  I started my career as a white-collar criminal defense lawyer/barrister.  Here’s a little secret:  most law firms will work with you on the fees.  They will negotiate fixed rates for discreet projects. And the deals can be even better if you can commit to repeat business for their firm. In one case, the intermediary was found to be forging company invoices in order to pass on costs to the country national customer!  The aftermath was not pretty.  One thing is certain, they never worked on behalf of the company again! Where will you draw the line?