What do the World’s Most Ethical Companies Have in Common: Ethisphere’s Erica Salmon Byrne Answers that Question

Joining me on this week’s episode of Ethical Voices is Erica Salmon Byrne, executive director of BELA, the Business Ethics Leadership Alliance, for Ethisphere. The Ethisphere Institute is the global leader in defining and advancing the standards of ethical business practices that fuel corporate character, marketplace trust, and business success.

Erica sheds insight on a number of key ethics issues for business and public relations. Specifically she addresses:

Could you start off by telling our listeners a bit more about your career?

I’m the executive director of our membership group, BELA. And I have been in the ethics and compliance space exclusively for about 17 years now. I got my start in coming out of a litigation practice, like so many others did, where I represented companies in internal investigations. I was with the DC office of DLA Piper when we landed the defense of WorldCom and the bankruptcy court examiners’ investigation. And like so many others in the space, that was really my introduction to what happens inside a company when things go terribly, terribly wrong, especially to very good people who weren’t involved in the misconduct.

I went from that to becoming much more focused on the proactive side. How do we keep these kinds of things from happening? Now I work with ethics and compliance professionals and their communications partners to make sure that employees understand what’s expected of them and have the tools and the resources to make good decisions.

Ethisphere recently released a list of the world’s most ethical companies. Can you tell me more about the list?

This is something we’ve been doing for about 13 years now. The idea really got its genesis in 2006 when we looked at all of the coverage of companies where things had gone horribly wrong. Ethisphere decided we wanted to celebrate companies that were doing things the right way. To the extent we could, we wanted to try to start telling those stories. And that’s really where the idea of the list, as well as our magazine, Ethisphere Magazine, that we’ve been publishing ever since, really came from.

We evaluate companies that put themselves forward. They are evaluated in five categories based on a 210-question survey that they fill out called The Ethics Quotient. Tt goes into governance, ethics and compliance related practices. It goes into the activities that the companies engage in to reinforce the culture that they want to see inside the organization. And it also goes into their activities in the community. How are they trying to build capacity with their third parties? How are they trying to support the communities in which they operate?

Companies also submit supporting documentation for their answers. The review team here goes through all of that. And then from there, we select the companies that we’re going to honor every year. And each year, it’s a comparative process. We look at your practices against your peers in your industry and in your space. And then we come out with the list. This year’s list is 128 companies including 16 first time honorees.

What characteristics do these companies share?

There are a couple of characteristics these companies share. They all exhibit what I would say is an understanding that it is more than possible to do well by doing good. They are focused on long term investments. They are focused on community engagement. They are focused on employee engagement. They are really looking at all of the aspects of stakeholder trust, and they are trying to be as authentic and transparent with people as possible, understanding really that sustainability writ large is about being here in 50 years, and the only way to do that is to have a long-term vision for the organization.

Who are the most ethical companies?

You can go to our website (WorldsMostEthicalCompanies.com) to see the full list including the companies … We list them by industry as well as by countries.

[Editor’s Note: The list includes companies such as Accenture, Dell, IBM, Lilly, and LinkedIn, but check out the full list]

Are there any companies that have been on the list all 13 years?

Yeah, there are eight that have been on the list all 13 years. It’s a list of companies that, as I said, have shown just a really profound commitment to long-term thinking and engagement with the communities in which they operate.

Were there any companies that did something that really stood out for you?

We are going to be releasing a report right around our Global Ethics Summit, that goes into some of the data around the process itself and some of the things that we saw from the companies that we engaged with.

One of the things that I was particularly excited about is, as you may know, the research on financial performance and its link to diversity amongst the board and the leadership team is substantial. And with the world’s most ethical companies, 28% of their directors are women, which is higher than last year when it was not quite 25%, and 10% higher than every other metric out there.

If you look at some of the research for some of the other groupings of organizations, we’ve never broken 15%. And so, to see the World’s Most Ethical companies at 28% was real exciting to me. It shows a real commitment to bringing all of those different diverse voices in the leadership team.

We also saw some really great examples of companies looking very carefully at the way that they can advance communication across the organization. Manager training was a big focus for a lot of the companies this year. And it’s a focus of ours, because one of the things that we see when we look at the data is the vast majority of employees, if they’re going to raise a concern, they’re going to bring it to their manager first. And it may stop there. So making sure that your managers are really well prepared to create the culture inside the organization of ethics and compliance is critically important.

And so we saw not just some great statistics, 91% of companies on the WME list this year, for example, are sharing real stories of things that happened inside their organization with the details taken out, of course. But the fact that they’re looking at, “How do I get the message down to every level of my organization through making sure my managers are fully equipped to do that?” And, “How can I make these things real by saying, ‘Yes, this really does happen here. And here’s how and here’s what happened.’?” Those are the kinds of innovative things we see companies doing that they just weren’t doing five or ten years ago. And the impact is tremendous.

What are the best practices when it comes to ethics training: how often it should be done, what size group for the employees?

When we think about manager training in particular, one of the things that we see is we see companies trying to deliver training through a lot of different modalities. One of the things we know from all of the adult learning research that’s been done is that there are all kinds of different learners. And on average somebody needs to hear something seven times, before they really get it. And so it’s not just enough to have the message delivered once through all employee training. You really need to think about, “How can I get at my managers where they are?”

So we see companies breaking training into smaller segments. We see a lot of very job-function specific training. So if I’m a manger and I have a team of 15 people, for example, that size of that team will be taken into consideration when the company looks at, “Okay, do I need unconscious bias training? Do I need to have a live working session on how to listen to my perpetual complainer?” That’s one of the things we see companies doing right now is you have that person on your team for who water is simply never wet enough. How do you set that aside and really say, “Okay, I’m going to listen to what this person is telling me divorced from who the messenger might be because the information itself is a gift.” And that takes practice.

A lot of us, when you get promoted to be a manager, more often than not, you’re promoted because you were good at the job you were doing before, so you know how to manage. And so it’s really incumbent upon these companies to teach people how to do this. And taking the time to do that when you first become a manager and then as you move through the organization because the skill set you need is going to be a little bit different.

One of the companies on our list, for example, has a campaign they are running called Speak Up, which is employee focused, Listen Up, which is manager focused, and Follow Up, which is incumbent upon the company to make sure that they close the loop with the people who raise issues.

Without mentioning any specific names, can you tell me about the most difficult ethical challenge you ever confronted in your career?

You always end up having these kind of pivot points in your professional development where you have choices that you have to make. And I think the most interesting one to me is something that I witnessed in private practice. It was about a witness that we were talking to of an internal investigation who we suspected might be somebody who would try to destroy documents. And we had a decision to make about how quickly we wanted to move to try to preserve that information. And I watched the senior partner on the investigation really struggle with which direction do I take this in and how quickly do I move?

We struggled for about 30 seconds, but it was one of those 30 second windows that felt like six years. You could just watch the whole process. And we got IT to seize his machine, and he had all kinds of confidential information on it that was code named as other things. And so we were quite right not to trust this person. But watching the decision making process of how do I figure out do I confront this witness with the suspicions that I have? Do I go straight to IT? Do I take this to my ultimate client who was the audit committee? And ultimately particularly as a relatively junior associate watching that process happen was a really fascinating thing for me.

What it reinforced to me at a particularly early stage in my career was that there are multiple stakeholders in every decision we make. And working through all of the various component pieces of that is a process that we all have to get very comfortable with so that we, at the end of the day, know that we made the right decision based on who our obligations were to.

There’re so many stories that you end up seeing as part of the internal investigation process, and all of the times that you witness folks just really having the worst possible day because they’re good people who are working at a place where somebody did something wrong and all of a sudden … There are no P&L lines for giant fines and legal fees. That money is coming out of M&A. That money is coming out of R&D. That money is coming out of bonuses. That money is coming from somewhere else. And it’s keeping the company from growing. And you watch that happen enough, and you just realize keeping that kind of thing from happening is so critically important to such a wide variety of stakeholders inside the organization. It’s really remarkable.

So, for a junior practitioner back in your shoes, what are some of the advice that you would give them? What is the process they should think about and keep in mind as they’re working through this?

The first piece of advice I would give is always understand who all the stakeholders are in your decision- making process, right? So obviously, you have the person whom you’re sitting across the table from or on the other end of the phone line from. But you also have all the people that that decision impacts. And that kind of what I will call whole vision piece is so hard to hold onto when you’re in the day-to-day of whatever it is you’re doing. Whether you’re outside counsel or you’re a communications professional inside an organization, it’s very easy to have blinders on and to not think about the various constituencies that are watching or impacted by what you do.

So I think the biggest piece of advice, the piece that I’ve held onto as my various roles have changed is that let’s think about all of the various people that are impacted by this decision. Because with that kind of broader vision, I think it makes a lot of these decisions much more straightforward. If I think about not just my boss, but I think about my colleagues and I think about my third party partners and I think about our communities that all those different groups engage in, and I think about our shareholders, if I’m working for a publicly traded company, our consumers, if I think about quality of the product, all of those people have such a tremendous role to play across the organization. Don’t let your relationship with just your one point of contact become your entire universe

What do you see personally as some of the key ethics challenges for companies today and tomorrow?

The rise in diversity, and I mean diversity writ large. So if you look at some of the research that’s out there right now, gender diversity, the tie between a diverse leadership and board team is very clear on the gender front, it’s very clear on the race front. But if you think about diversity as diversity of background and thought, one of I think the biggest challenges is how do I create an environment where everyone is comfortable bringing their full selves to work. How do I create an environment where people are comfortable challenging their boss?

One of the things that I always recommend to ethics professionals when they are thinking about the culture inside their organization is to look at what the company’s failure response is. So if your response to failure is to figure out who’s responsible, then you’re going to have people who are very uncomfortable raising their hand comparatively. If your response to failure is to figure out what went wrong and how you’re going to fix it without necessarily assigning blame, then you’re going to have a work environment in which people are more comfortable admitting mistakes early when they’re easier to fix.

So that’s one of the key pieces to think about is what sort of reaction do my managers have when they are challenged? Are people comfortable bringing up a new idea? Are people comfortable admitting that they made a mistake? All of those component pieces are things that are going to tell you as an ethics professional whether or not you’ve got the kind of culture inside your organization that will ultimately allow you to get at issues early and fix them before they become front page news.

Are there other challenges you’re seeing?

The modality piece I would say is a challenge. It’s something that’s going to really require ethics professionals to work with their communications partners to make sure that they are really taking advantage of all of the ways in which people currently communicate. So it used to be that sending an email was a good way of getting people’s attention. Nowadays, that email is very likely at the bottom of a pile of 400 that have come in since lunch.

So, you have to get creative. You have to think about what are my other ways that I can reach people? And what are my other ways that I can reach people writ large? So whether it’s short form video or podcasting or digital signage in work locations like factory floors, what are the ways that my people inside my organization are absorbing information right now? And how can I understand how that might be stratified by region or by function? How can I understand which particular voices across the business might have the greatest resonance on a particular topic?

I always encourage the ethics professionals that I work with to make sure that they have really good relationships with their coms folks because they can often say, “Oh, so and so is going to lead a regional town hall in Rio, I can get some messaging into those remarks that will reinforce the training that you rolled out last month.” That’s how you get that holistic, let me touch you multiple times with the same message that is so critically important to actually grabbing mind share from your employees base. And it’s part of the reason that I’m so excited that at Global Ethics Summit, we’re going to have a panel on how communications and marketing can help fuel the ethics agenda that will also include some interesting benchmarking that we’ve gathered. And I think it’s going to be a really great conversation around exactly that relationship piece. Because very often, the compliance and ethics professionals are lawyers by training and they may not have built quite as comfortable relationship with their communications folks as they need.

As a coms pro, we’re hearing quite a lot of focus on purpose and doing well by doing good, but are you concerned about companies placing less than a laser-life focus on ethics in today’s climate?

I’m really not and I’m going to tell you why. The employee base is not going to let them. So one of the things that I’ve been most excited about as an ethics professional is aside from the doing well by doing good research, the fact that we can actually now demonstrate that there is a correlation between companies with a good focus on longterm-ism and a strong vision for the organization and their financial performance, so it becomes less about, oh, that’s a nice to have and really much more about that’s a need to have. But the other piece is all of the research that shows that employees are increasingly driven by a values match. The tight labor market that we’re in right now, you really have to be an employer of trust in order to be able to attract the very best talent.

And so I don’t think the focus is going to get dimmed at all. I think it’s all coming together in this idea that this is who we are as a company. This is how we do business. This is how we focus on our communities. This is what we bring to the world. This is why we get out of bed in the morning. That’s the purpose. And if you look at all of those component pieces, that’s really where the employee is driving a piece of that. And if companies take their eye off that ball, they’re going to lose those most talented employees.

What is the best piece of ethics advice you were given?

I’m going to credit my dad with this one because it has helped me so much in thinking through and not reacting to a particular situation I was given. One of my dad’s favorite sayings is “Never assume malice when stupidity will suffice.”

And if you think about that from an ethics perspective, very often people are making a decision or making a mistake because they don’t understand what’s expected of them or because a process has been put in place that is so burdensome, they can’t do their job. So that “never assume malice” piece, is a piece that I’ve really held onto because it helps me understand that the mindset of the person that I’m interacting with is very often one where they simply don’t know, and they just need to be educated about what it is the company really needs them to do, as opposed to those true bad actors. If I can keep myself in this space where I’m assuming this is a person of good intention that I’m speaking to, it makes the rest of the conversation a lot easier.

Is there anything I haven’t asked you that you think is important for our listeners to know?

If you don’t know who your chief ethics and compliance officer is, please go introduce yourself. You guys are natural partners, and the ethics folks in your organization really need your help to make sure that they are engaging with employees where they are because that is not necessarily something that your ethics folks are coming to the table with.

One of the things that we are happiest to do here at Ethisphere is help folks with that. So we’ve got great data on how to make the case that you guys are the very best partners for each other. And I just hope that folks listening to this will take a moment to make sure that they know who those people are.

Check out the full interview, with bonus content, here:

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Mark McClennan, APR, Fellow PRSA

Mark W. McClennan, APR, Fellow PRSA, is a senior strategic communications professional. He has more than 20 years of tech and fintech agency experience, served as the 2016 National Chair of PRSA. drove the creation of the PRSA Ethics App and is the host of EthicalVoices.com
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