mlb-consulting presents beyond compliance (™) - our approach to ethical managment

Beyond Compliance™: How to enhance ethical management to support the overall business strategy?

1 (c) www.mlb-‐consul0ng.com & www.palazzo-‐palazzo.com

Food quality?

Inve

ntor

y irr

egul

ariti

es?

Corruption by/ of suppliers?

Anti Trust issues? Correct reporting on time as basis for remuneration?

Price fixing?

Environmental issues? Dumping prices?

Health & safety at the workplace?

Human rights?

Legality of working conditions?

What are your current compliance challenges?

Fraud


Corruption in the value chain?

The standard compliance approach focuses on the black sheep only

The standard compliance approach focuses on risk

mitigation through enforcement of rules and

regulations.

The basic assumption behind is, that bad things are

done by “bad people”. Scandals in corporations are

attributed to greedy managers with character

deficiencies.

Accordingly, the compliance systems in corporations

are designed to keep “bad people” in check.


…and forgets that good people do bad things in bad contexts.

But from what have learned from recent scandals is

that persons with a high level of integrity who are put

into a pathological context will probably misbehave:

bad contexts can push good people towards illegal

and immoral decisions. This is nothing knew. This

phenomenon has been widely examined through

psychological experiments that scholars have

conducted in the early 1950s/1960s in order to

understand the mechanisms behind.


authority low trust

compe..ve environment

internal competition

fear consensus driven culture

tolerance of wrongdoing

performance pressure group

think

peer pressure

.me pressure

lack of role models

diffusion of responsibility

rou0nes


Challenges legalistic compliance ignores:

How we turn ethically blind? We perceive the world through a filter


slippery slope of incremental change

time

Actual situation: (all potential situational, environmental and organizational pressures and stimuli)

Ethical Blindness

Psychological Factors - values - cognitive style - personality

Observable Experience - education - functional background - other factors

Limited Field

of Visioni

Selective Perception

Inter-pretation

adapted from Finkelstein, S., Hambrick, D.C., Canella, A.A., 2009, Strategic Leadership, here: Bounded Rationality, p. 45

Risk

Time

(Reactive) (Proactive)

Financial & Reputational Damage

Integrity Culture

What you manage:

Compliance Culture


With the standard approach the rising tide of integrity risks is noticed much too late.

Contexts are stronger than (most) people

We know that it is extremely difficult for everybody

to live up to our values when there is a “bad context”

around them.

It is not realistic to expect heroism from employees –

fighting “the system” on a daily basis. For an

organization to transform into the next level of

ethical conduct, the “context” itself has to be

addressed.

In an organization of black crows, the single moral

hero (white crow) has little impact.


Beyond Compliance™ or: moving the organization towards an integrity culture


Beyond Compliance™: Turning Compliance into a Partner!

•  The idea is to use the compliance approach (practices) and systems

to not only ensure high quality of products and processes but also

use it as a vehicle to support integrity, passion and excellence

through a behavioral change.

•  Behavioral change does not happen over night, it has to be initiated,

communicated, trained and rewarded. In order to be successful,

behavioral change needs to be part of the companies’ strategy.

•  We can support you in initiating, communicating and training of

behaviors, attitudes in order to promote ethical conduct and

integrity at the working place – beyond compliance. 10 (c) www.mlb-‐consul0ng.com & www.palazzo-‐palazzo.com

integrity check-up

•  Ethical blindness risk landscape and recommendations

Roll-out

•  Create awareness on ethical blindness and develop positive peer pressure and value resillience

Embed and sustain

•  track KPI’s, embed in management systems, anchor in behaviours

11 www.palazzo-‐palazzo.com & www.mylearningbou0que.com

Our Beyond Compliance™ Portfolio milestones

integrity check-up

• interviews with top level management • trigger points survey • analysis of policies & procedures & strategy alignment • Analysis of communication concept

Roll-out

• developing roadmap • integrity training cascade • communication alignment

Embed and sustain

• KPI tracking • third party involvement • tailor-made training for selected key groups • embedding integrity into HR policies

12 www.palazzo-‐palazzo.com & www.mylearningbou0que.com

Our Beyond Compliance™ Portfolio actions

Get in touch to find out more:


Anna Eckardt, L.L.M. phone: + 41 78 920 25 46 email: [email protected]

Bettina Palazzo, Ph. D Phone: +41 79 697 56 28 email: [email protected]

mlb-consulting presents beyond compliance (™) - our approach to ethical managment

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