Most in compliance and ethics would agree that the ethical tone of the organization, particularly at the top and middle management levels, is what takes a “paper program” and breathes life into it. Certainly the statements linked below from various government sources demonstrate that regulators understand the importance of tone. But the literature of compliance and ethics is not replete with details on how to create the tone that will meet these needs and expectations. “We know it when we see it” isn’t much of a plan of action.

Tone isn’t simply about communication – all talk, no “walk” is a tone, but not a particularly good one for an organization. Nor is tone solely about compliance and ethics. But the organization’s ethical tone can be supported by strategic, purposeful communication about the Compliance and Ethics effort. Here are some strategies used by others.

#1 Founder Wisdom

In some organizations part of the current ethical tone comes from conscious hearkening back to habits or insights of one of more of the original founders. One good example of this is CH2M HILL's “Little Yellow Book”, written by one of the founding partners, Jim Howland. If you haven’t read it, you should. Then take a look at the video on the company’s careers page to see how it has updated the message for this century.

Granite Construction consciously links its Code of Conduct to its founder, Walter "Pop" Willkenson's eleven point "Founder' s Guide To Future Generations". (Here's the current "Code".) Kellogg's "Global Code of Ethics" features vintage advertisements, Tony the Tiger and quotes from W. K. Kellogg on just about every page . The Arthur J. Gallagher Company posts "The Gallagher Way" on the walls, the Internet, and throughout its "Global Standards of Business Conduct"


Another good example is Kaiser Permanente, which consciously used the work ethic of Henry Kaiser to inspire ethical performance today. The power of stories to capture attention and develop corporate culture is well documented.


Walmart's "Statement of Ethics" alternates quotations from Sam Walton with ones from General Eisenhower, Abraham Lincoln and Confucius, among others. Similarly, Berkshire Hathaway’s Code of Conduct incorporates a “rule of thumb” from Mr. Buffett and he continues to publish, biennially, his memo to “The All Stars” about the company’s top priority – its reputation.


Not all founder wisdom has to be solemn. Parsons' Corporation uses quotes in its Code from various historical figures (Jefferson, Heraclitus, Martin Luther King...) including the following from Will Rogers: "Live in such a way that you would not be ashamed to sell your parrot to the town gossip."



#2 In the words of the CEO…

Most codes of conduct are published with an introductory message from the CEO (and /or the head of governing authority). The message is to show that the “Code” isn’t simply a creation of the Compliance folks – those in charge of the organization have read and endorsed it. Often these intros have some discussion of how the “Code” behaviors fit with the organization’s values or its plan for success. These introductory messages are a start – but only that – at setting the C&E tone.

For example, Texas Instruments uses quotes from its CEOs and Chairmen - current and past - in "The Values and Ethics of TI" The Code of Ethics at Concurrent Technologies Corporation bears the signatures of every member of the board and every member of the senior management team. This company includes a picture and message from its CEO on the web portal for its Hotline. Universal Health Services has both pictures and a "message" from its CEO / Chairman and its President describing its Compliance Program

CH2M HILL’s Code of Conduct has both an introductory message from the CEO and “key points” attributed to various members of the senior leadership team highlighted throughout the text, as well as quotes from the “Little Yellow Book”.


Other organizations have leadership statements on the portion of their public website that describes the Compliance and Ethics program – Universal Health Services, for example, uses the same “message” in both its website and code; Pacific Life uses two different messages with similar themes (but the same picture of the CEO). The CEO message on the site of Thales, a defense contractor, used to start “Good intentions are simply not enough for a company that’s serious about integrity and acting responsibly”, a quote from the organization’s 2009 Corporate Responsibility Report, although that report was no longer available on the site. (Here's the current message.) Which highlights one of the potential shortcomings of these messages from the top – they have a shelf life.

And even for the span of that life, these messages work most effectively if they sound like a genuine expression of the leader’s thoughts about how the C&E program fits within the organization’s priorities. Compare, for example, this website message from the Chairman of the Management Board of a large steel producer and distributor:

  • “The same applies if you discover a breach of the Code. We do not wish to create a culture of mistrust, but it is your duty to report a breach in such a case. Nobody should fear reprisals for having done so. You will be protected, if necessary by me personally.”

with:

  • “If you have any questions about the Code, it is your responsibility to ask. You can speak with any of the contacts listed in the Code [none of which is the author] or call …. where you can make an anonymous report. No one will be subject to retaliation for reporting violations in good faith.”


Or imagine being a member of the Proctor and Gamble workforce reading the following in the Worldwide Business Conduct Manual :

  • Every day, P&G competes to win – but never at the expense of our PVPs [Purpose, Values and Principles]. We’re focused not only on business results, but also on how those results are achieved. We will not drive results through illegal or unethical dealings. I am so personally committed to this that I lead P&G’s Ethics & Compliance Committee, which includes our Chief Financial Officer, Chief Legal Officer, and Global Human Resources Officer...


    Robert A. McDonald, Chairman of the Board, President and, Chief Executive Officer

Taking things a step further with the use of technology:

Siemens has a video with a member of its managing board describing how the company "stands for its values". The company's site also has a second video with its former independant monitor , Dr. Theo Waigel, describing his work.


In videos like these the effectiveness of the “message” depends largely on the apparent sincerity of the presenter. Does the speaker sound like he or she would if you ran into them in the hall?

Watchers of this video featuring the President of Vestas Americas or this one (under the "environmental commitments" segment) from the CEO of Premier Farnell, should have no question about the tone at the top of their organizations - and how compliance and ethics fits into it. Cisco uses a segment with all its senior leaders to discuss "Connecting To Our Values" and Timken's leaders explain how to "Turn Ethics Into Action"


Here's Tony Hsieh of Zappo's describing how the company came up with and uses its core values.(video)

#3 Internal Publications

Internal newsletters, message boards, even posters are opportunities to communicate about ethics. They can reach a large audience with a consistent message. But to really gain attention and “stickiness” some creativity and willingness to talk about missteps may be required.

For example, here’s an inhouse “interview” with the Boeing VP for Ethics and Business Conduct in 2004. The Q & A format encourages “skimming” for what is of interest to the reader. There are a couple vague mentions of “ethical failures” (Boeing was under federal investigation at the time) and a specific question about hiring former government employees (another recent misstep) but no details. And there was a lot going on in Compliance and Ethics at Boeing in 2004 – just read this speech by the CEO, Jim McNerney, a few years later to the Conference Board.

Compare this story of a regulatory misstep shared by Johns Hopkins.


#4 Blogging

Yet another version of senior leader ethics messaging is seen in those who have taken to blogging, for example:

Success here also involves an authentic "voice" from the blogger and a bit more risk – particularly allowing the posting of responses to the “messages” and, hopefully, getting some. Without at least the opportunity for feedback a blog is just another static publication from the top down.

#5 “Ethics Day / Week / Month”

Organizations with well developed Compliance and Ethics programs often set aside time for a celebration. Celebrating “Compliance and Ethics Week” is promoted by some national organizations. But these events are not just an chance to remind the organization about features of the C&E program. They are also a great opportunity for tone communication.

General Mills, for example, has an annual “Ethics Action Day”. The 2010 theme was “small things matter”; in 2011 it was “Real Ethics” and featured a presentation by senior leaders, which was then highlighted in the GM video blog “Taste of GM”.

Senior leaders also played a role in the first ever "Recommitment to Ethics" event at Boeing. "Recommitment" is now one of three annual events involving all employees at the company.

L’Oreal (the beauty of ethics, the ethics in beauty) had an annual “Ethics Day” featuring a web chat with the CEO about the Company’s five ethical values. In 2011 15,000-17,000 employees followed the “chat” and 700 posed questions. That’s a huge “message”.

For more on celebrating Compliance or Ethics Day / Week / Month, click here.

#6 Sending the CEO On the Road

Another way to emphasize the importance of the compliance effort is to send the CEO actually – or metaphorically – on the road telling those outside the organization about its program. The MacNerney speech linked above is a good example of this strategy. So is this this discussion at the Markkula Center for Applied Ethics. This CEO goes on the road to talk about "Making Ethics Meaningful" at his global company. And this CEO took time to speak to the Defense Industry Initiative's Best Practices Forum.

How about getting the CEO interviewed by the Wall Street Journal on "How To Create an Ethical Workforce" or at the Stanford Business School on "Leading During Crisis"? Or simply attaching a copy of the CEO’s remarks to the Global Ethics Summit about his “Best In Class” program to your company website, as Baker Hughes has done. Of course sending your CEO on the "road" is not without risks - CEOs are very public representatives of the company and their appearances can be used as occasions for protest.

And then there are periodic "townhall" meetings with employees, a strategy that Walmart used to counter the effects of its ongoing bribery investigations. CEO Mike Scott, who has been implicated in the investigation, appeared in person at the 2012 meeting to encourage employees about "doing the right thing, every single day."


Then there's the CEO who before a meeting will ask company newcomers to send him feedback when it's over - as part of an effort to build a culture of speaking up.


#7 Measuring What the Team Thinks

In addition to employee satisfaction, engagement, etc. some organizations are beginning to measure their ethical cultures by asking whether their employees feel pressure to cut corners, see company policies being violated, how hard is it to raise concerns. The specific questions being asked are probably less important that the message sent by them being asked – and whether the answers are shared, as in this insurance company (click "numbers")


#8 Training?

Is it possible to to train leaders how to set the correct ethical tone - or is this a "hire the right people" challenge? General Electric, with its very mature program, has addressed leadership engagement in compliance with a training strategy. Alcoa use “Be a Role Model! How to be a Leader in Ethics” training, along with a brochure for leaders. Boeing also makes it clear to its leaders what their role is in Compliance. And Lockheed uses its leaders to deliver its annual Ethics Awareness training.

Since 2001 Nexen has had 22 "Integrity Leaders" spread throughout its company who spend "five to 10 per cent of their time actively cultivating Nexen’s culture of integrity through education and awareness." The "Leaders" themselves also get training. In 2012 Peter Nicklin, the President of the Europe, Middle East and Africa division of Baxter had the compliance training sessions at sales meetings led by the senior managers. He also sponsored "Leading With Integrity" training for his own staff, general managers and country managing directors.

How would these strategies work to set the tone in your organization?

#9 Contracting?

Responding to the scandal attending the departure of its last Managing Director, the International Monetary Fund's board took the step of not only contracting for ethical behavior with the next one but publishing her contract as well:

  • "you are expected to observe the highest standards of ethical conduct, consistent with the values of integrity, impartiality and discretion. You shall strive to avoid even the appearance of impropriety in your conduct. In the performance of your duties as Managing Director ..."

Now that sets a tone...particularly since the Fund's stated "core ethical values" are integrity, impartiality and - honesty.


Government Statements about Tone:

Other Tone Resources on the Web:


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Walter Willkenson and his twelve point "Founder' s Guide To Future Generations"