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Creating a culture of integrity

By Ros O’Shea

For employees to truly buy into an organisation’s value system, leaders must make the most of the ‘moments that matter’. 

The South Sea islanders have a word, “mokita”, which translates as “a truth everyone knows but nobody speaks”. And so it is with organisational culture. Creating an environment in which employees implicitly understand the values of the organisation and, more importantly, behave accordingly, takes time and effort. Many businesses will have implemented the requisite compliance framework to help foster a culture of integrity. This typically includes a code of conduct and associated policies, training programmes, a whistle-blowing channel for employees and so on. While these are both helpful and necessary, on their own they are not enough. If values are to truly become part of the DNA of the business, they must be part of a continuous conversation. There are some decisive points in both the development of an organisation and employees’ careers when these messages will really resonate and define the true character of an organisation’s leadership. These are the ‘moments that matter’. From recruitment to promotion and even departure, the values of an organisation should be clearly demonstrated at these key junctures.

“In looking for people to hire, you look for three qualities: integrity, intelligence and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire someone without integrity, you really want them to be dumb and lazy,” writes Warren Buffet. He is so right. Imagine how much trouble a clever, highly motivated and corrupt new hire could cause.

Personal integrity

The first of these moments that matter, therefore, happens right at the start of the recruitment process. Ethical considerations should be incorporated into the brief for the position and subtly reflected in the interview plan. Rather than asking a candidate straight off if he or she is morally bankrupt, which really only invites one response, probe a little deeper to truly gauge their personal integrity. For example, “Have you ever faced an ethical dilemma? How did you handle it?”

Successful at interview, a new recruit’s next encounter with the company’s value system should be a carefully designed induction programme. Indeed, some companies require employees to sign up to their code of conduct as a condition of employment. Whatever the approach, the code should be explained to new employees in some detail and it is much more powerful if a senior leader, ideally the CEO, can deliver this in person. Consider also assigning a mentor to each new team member. This can facilitate their smooth transition into the company and provide a safe harbour for new hires to ask questions and quickly navigate its culture.

In some organisations, that is where the story ends. The employee’s CV and the signed code of conduct is filed away and forgotten on a shelf in the HR department. But if ethical character is to be cultivated, it must be continuously calibrated. More pragmatically, if the mantra “what gets measured gets done” is true, then ethical competencies should be monitored as part of the formal performance appraisal process. Explicitly including values in compensation strategies, in addition to the usual financial metrics, makes a very clear statement to employees that because these things matter to the company, it should also matter to them. It also serves as a reminder that there is no reward for breaking the rules.

Promotion presents another timely opportunity for an ‘integrity NCT’, ensuring the newly promoted employee’s values and those of the organisation are still aligned and that any training needs associated with their new position are addressed. This is particularly relevant if they are assuming a managerial role, with staff relying on them to lead the way in terms of appropriate behaviour. It is also relevant in the case of overseas assignments, where the employee will be representing the company abroad and will be responsible for maintaining home-grown values, which may conflict with local customs.

A frank perspective

An exiting employee can provide many valuable insights. Liberated from office politics, soon-to-be-ex-employees can provide reliable and candid accounts of the organisation’s ethical norms. Whether at the informal leaving drinks, or more properly conducted as a formal exit interview, an astute chief executive does not pass up the opportunity to get a frank perspective on the cultural status quo from someone who has decided to move on to new pastures.

Core values

Moments of significant corporate change or times of crisis offer powerful opportunities for values-related communications. The tone should be confident and reassuring – that while there may be changes or challenges ahead, core values will prevail and integrity in all business transactions must be upheld as normal. Finally, in the event that the company suffers an ethical breach, particularly when this reaches the public domain, it is important that the CEO moves quickly to communicate with staff and affected stakeholders. If, at the height of the crisis, the leader makes values their touchstone, in that moment employees will understand that ethics truly do matter.

Ros O’Shea is an expert in governance and business ethics, and author of Leading with Integrity: A Practical Guide to Business Ethics.

This article was originally published in the December 2017 issue of Accountancy Ireland.