by Hui Chen
A distressed colleague tells you that her boss has demanded that she meet him in a hotel room that evening. This conversation follows days of the boss leaving your colleague flirtatious messages and making sexually suggestive remarks in her presence.
Would you report it?
What if her boss is also your boss?
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The scenario is a slightly varied version of a personal experience, the full version of which I have shared in various town-hall settings. No matter how many hands went up at the first question, at least of half of them would come down at the second one.
In reviewing corporate misconducts, perhaps the most frequent recurring question in my mind is: “Why didn’t somebody say something?!” When I assess compliance programs, one of the standard data sets I request is internal reporting data, which I believe is indicative of an organization’s speak-up culture. A strong speak-up culture functions as a monitoring and diagnostic tool on the health of the organization. Timely internal reports provide opportunities for organizations to respond to threats, incidents, even inefficiencies, in ways that may minimize potential damages.
Most of the compliance efforts on promoting speak-up that I have seen tend to focus on the reporting mechanism itself: promotion of the mechanism, user experience, etc. What has not been addressed often, however, is the personal struggle that precedes the decision to report: in other words, how someone gets to the point of looking up that hotline number in the first place. Informal anonymous surveys I have conducted on whether employees have failed to report a wrongdoing they have witnessed have been revealing: not everything that should be reported is reported – not even close.
In her seminal work on Principled Organizational Dissent (1986), psychologist Jill Graham identified three factors influencing individuals’ decision to report wrongdoing: the perceived seriousness of the wrongful act, the perceived responsibility to report, and the perceived personal cost of reporting. I call these the “me” considerations: what does this have to do with me, and what do I have to lose by reporting it. Motivating employees to report – leading them to the decision to do so – is an issue that goes to the root of any organization’s internal reporting system.
What does this have to do with me?
One questions that has come up in my work with global corporations is why there is more conflict of interest allegations in the United States than in some foreign markets where one might expect to see more conflicts of interest. My theory is simple: people don’t report what seems perfectly normal to them. If someone operates in a context where giving insider stock tips to friends or awarding contracts to relatives was the norm, s/he would not be any more likely to report those conducts than on cars speeding down the highway. They don’t see what’s wrong with it.
The perception of the seriousness of a wrongful act depends on the person perceiving the act as both “wrong” and “serious”: how offensive do I find the behavior according to my value system. The degree to which I view something as both wrong and serious influences whether I would want to do something about it: the perceived seriousness increases perceived responsibility to report. (Sonnier & Lassar, 2013 (PDF: 585 KB)). Just because my company tells me something is wrong or serious, however, does not mean I believe it to be wrong and serious. This is the disconnect between the typical compliance training and actual perception.
While compliance training is meant to bridge this disconnect, it is not clear how well it accomplishes that goal. The typical message begins with “At [company], we take [compliance topic] seriously.” The rest of the message goes to “how” the company manages the issue but not “why” it needs to be taken seriously. Other than the generic “do the right thing” – the interpretation of which varies across persons and cultures – it is not clear why does the company care about insider trading, corruption, sexual harassment. The answer to that “why” question is what connects the desired behavior to the company and employees’ values and beliefs. Insider trading, for example, is about fairness; harassment is about respect; cheating is about trust. Fairness, respect, and trust are values that employees understand and can personalize.
How do you know you have made the connection? The field of moral psychology has been measuring moral perception and culture for years, and there are tools (PDF: 588 KB) available for such measurements. Use these tools to take baseline measure before your training and communications and then take another measure six months later. The data will allow you to see whether your strategy worked to change perceptions.
What do I have to lose?
In the opening scenario that I recounted based on my personal experience, I – a compliance investigator who had cited the company’s non-retaliation policy umpteenth times – believed that I had everything to lose by reporting. My own experience tells me that just because the company has an anti-retaliation policy doesn’t mean people believe it; and even if you believe it as a bystander, it doesn’t mean you believe it as a potential whistle-blower, when your own life and career are on the line. So, how can companies change the personal cost calculations?
Fundamental to that calculation is trust in the company’s internal reporting system: can I really remain anonymous? What will they do with my report? Stories such as Barclay CEO’s attempt to unmask whistleblower feed into potential reporters’ fear about retaliation. I have also spoken with countless employees who regard the company’s internal reporting and investigation processes as a mystery. Transparency is needed to enhance the confidence in the company’s reporting system. Publication of data such as the number of reports and investigations may show peer acceptance of, as well as follow up on, reporting. Data on the number of disciplinary actions on retaliation would provide meaning to “non-retaliation”. Introducing the faces of compliance investigator may also serve to humanize the connection: people prefer to talk to those they feel they know.
Companies can also reduce the psychological burden of reporting by turning hotlines into helplines. Kimberly Clark recently made this change as part of a campaign to change the mindset from “reporting wrongdoing” to “asking questions”, and experienced an eight-fold increase in usage. Part of the campaign is teaching manager to “listen up” – if you want people to talk, you need to learn to listen. In my experience, most whistle-blowers are not motivated by rewards: they just want to be heard.
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The posters, phone lines, and websites do not motivate people to report: people’s own sense of wrong, responsibility, and personal cost do. It’s the human factor where efforts need to be begin.
Hui Chen (www.HuiChenEthics.com) is an ethics & compliance advocate who had served as the Compliance Counsel to the Fraud Section at the U.S. Department of Justice as well as in compliance leadership roles in different industries around the world.
The views, opinions and positions expressed within all posts are those of the author alone and do not represent those of the Program on Corporate Compliance and Enforcement (PCCE) or of New York University School of Law. PCCE makes no representations as to the accuracy, completeness and validity of any statements made on this site and will not be liable for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with the author.