Fortify Your Culture Of Integrity

July 26, 2018

Contributor: Jackie Wiles

Chief compliance officers (CCOs) must continue to fuel the virtuous cycle of integrity in their culture. Without attention, the cycle can turn vicious.

Have you ever observed compliance misconduct? Do you know someone who has? It wouldn’t be surprising. Our research shows nearly 30% of employees have observed at least one such violation in the past year and 71% report working in weak climates — places where their managers, teams and colleagues fail to model and reinforce the importance of compliance and ethics.

All this despite persistent and ongoing efforts by compliance to strengthen their organization's culture of integrity — and despite compelling evidence that risk-management and employee outcomes improve in a strong culture of integrity.

“ The key to a strong and sustainable culture of integrity within in an organization is to establish strong climates”

There is certainly reason to aspire to a strong culture of integrity. In such cultures, employees are:

  • 90% less likely to observe misconduct
  • 1.5 times more likely to report any misconduct they do see
  • 2.1 times more likely to be engaged with their job and company
  • 2.4 times more likely to exhibit higher levels of discretionary effort

“The key to a strong and sustainable culture of integrity within in an organization is to establish strong climates. When employees work in strong climates, all of the work compliance and ethics programs do to improve culture is strengthened," says Gartner practice leader Brian Lee.

This is especially significant because employees who observe misconduct are more likely to consider quitting their jobs. Of those who have observed a compliance violation, 59% are actively job-hunting — compared to only 27% of those who haven’t observed a violation. Of those who reported noncompliance, 62% are actively looking for another job.

Learn more: Advancing Integrity in the Workplace

Articulate and demonstrate integrity

To reinforce the culture, compliance and ethics programs must pay particular attention to the practices and procedures employees follow and those behaviors that are rewarded and supported in a way that’s visible to employees.

“We tested many drivers of culture and found that what an employees’ teammates and colleagues say and do has a significant impact on their perceptions of culture,” says Lee. Programs should do three things:

  1. Help employees exhibit good behaviors in their work
  2. Ensure managers send consistent messages
  3. Make colleagues’ positive behaviors more visible

Operationalize the culture

CCOs can also maximize the impact of their efforts by ensuring there are adequate processes to support integrity initiatives. Policies mean little to employees without an understanding of how to apply them to their daily jobs.

Learn more: Culture in Action: The role of leaders in making culture perform

Gartner’s RickClarity has found, for instance, that of all employees that observe misconduct, more than half don’t report it to someone within their organization. Why would that be?

One reason could certainly be the lack of proper processes to handle claims. If companies keep claimants in the dark after their claims of misconduct, claimants will doubt their allegations are being taken seriously. That harms employees’ perceptions of the company and reduces the likelihood that they would report alleged misconduct in the future.

Benchmarking by RiskClarity™ shows that employees who reported misconduct and felt their company did not take action have their perceptions of integrity decline by 29%. The perceived lack of organizational justice is one of the primary reasons employees don’t report misconduct — creating a vicious cycle that directly threatens the organization’s culture and performance.

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