Mike Volkov has said, “Even when a company does all the right things at the senior management level, the real issue is whether or not that culture has embedded itself in middle and lower management. A company’s culture is reflected in the values and beliefs that exist throughout the company.” To fully operationalize your compliance program, you must articulate the message of ethical values and doing business in compliance and then drive that message from the top down throughout your organization.
What should the tone in the middle be? What should middle management’s role be in the company’s compliance program? This role is critical because most company employees work directly with middle rather than top management. Consequently, they will take their cues from how middle management responds to a situation. Perhaps most importantly, middle management must listen to the concerns of employees. Even if middle management cannot affect a direct change, employees must have an outlet to express their concerns. Your organization should train middle managers to enhance listening skills by providing training for their “Manager’s Toolkit.” This can be particularly true if there is a compliance violation or other incident which requires some form of employee discipline. Most employees think it important to have organizational justice so that people believe they will be treated fairly. For if there is organizational justice, it engenders perceived procedural fairness, which makes it more likely an employee will be willing to accept a decision that they may not like or disagree with the result.
Even with a great “tone at the top” and a positive “mood in the middle,” you cannot stop. One of the greatest challenges of a compliance practitioner is how to impact the most front-line employees or the “tone at the bottom.” One of the things you can do is assemble a compliance focus group to find out how business is done in the field and if it differs from what your company expects from an ethical and compliance perspective. Begin by assembling a group of employees who are familiar with the challenges of doing business in a compliant manner in certain geographic regions to discuss the challenges of doing business ethically and in compliance. Ask them questions about their understanding of your compliance regime. Then categorize the answers into your company’s theory and practice of compliance.
More than ever in 2022, employees came to look to their direct supervisor to determine what the tone of an organization is and will be going forward. Many employees of large, multi-national organizations may never have direct contact with the CEO or senior management. By moving the values of compliance through an organization into the middle, you will be in a much better position to inculcate these values and operationalize compliance with them.
Three key takeaways:
1. Tone at the top—direct supervisors become the most important influence on people in the company
2. Give your middle managers a Tool Kit around compliance so they can fully operationalize compliance
3. Organizational justice is an additional way to help operationalize compliance
