Monday, September 14, 2020
“Ethical fading” was not a common phrase until early 2020, when COVID-19 became an international pandemic. Suddenly, employees were working from home en masse and remote working became the new norm—and with a (non-Russian) vaccine possibly years away, this trend will continue into the foreseeable future. Ethical fading occurs when those employees, who were continually reminded of their moral, ethical and cultural behaviours in the office, begin to forget. It is a term that all risk-mitigation groups with remote employees should have top of mind.
In normal situations, the act of an employee attending the office provides visual cues about why corporate culture and values are so important. The process of going into work—putting on business attire, commuting to the office, and using a pass card to get into elevators and office buildings—and then sitting at a desk, logging into a computer during working hours, chatting with co-workers at the water cooler and witnessing employee behaviour being modelled are all simple acts that provide constant reminders about our ethical obligations to the company we work for.
Working from home, on the other hand, brings an element of casualness that makes risk management more difficult.
By now, most employees understand that Big Brother is watching and activities that take place on work-related devices are likely being monitored. In these circumstances, it is probable that most misconduct activities will take place outside of company systems and networks. Without a watchful employee sitting in the next cubicle, there isn’t much stopping someone from taking a photo of their computer screen, recording confidential client information on a piece of paper or picking up the phone to Zoom-chat a friend about a merger they’ve heard about. Because of the casualness of working from home and the blending of work/home life (screaming babies and barking dogs in the background), employees may start to forget about ethical obligations to their companies, clients and each other.
While most companies have already increased regular communication with their employee population, if you belong to a small or large corporation, law firm or partnership that hasn’t thought about it, it’s time! Communicate with employees often and through multiple platforms. While the ethical and cultural tone of the organization should come from the top of the house—CEOs, Executive Leadership, General Counsel and the Board of Directors—you also need buy-in from the employee population.
Reminders about conduct codes, corporate values and expected ethical behaviour at the organization should be discussed. A strong approach to these topics by top leadership will encourage middle management to share and reinforce corporate values during team meetings, huddles and email communications, which will, in turn, impact the everyday working population. Reinforced messaging is a powerful weapon to prevent unwanted misbehaviours.
Most people are inherently good. However, some may find themselves in situations where the fastest and easiest route to success may lead them to make poor choices. During this pandemic, stressors like a busy family life, financial concerns (familial unemployment, inability to meet debt obligations, etc.) or even unrealistic sales goals and targets imposed by the organization itself can all contribute to employees making the wrong decisions, particularly when they are not continually reminded of their ethical obligations to the company.
Realistic scenario-specific communication that highlights both positive and unwanted behaviours is most likely to resonate with employees and guide them to make the right choice. Companies should conduct a risk analysis to determine areas of most concern and focus communication on those areas as often as they can, using examples of behaviour to avoid, both fictional and real, if possible. Scenario-based communication and education can help employers steer employees towards the most desirable path.
Now is the time to emphasize and highlight whistleblower programs and hotlines. Organizations with whistleblowing hotlines detect internal fraud activity more often than those without such programs and more frequently than through fraud analytics, compliance, audit or other IT processes. Fostering and highlighting an environment of psychological safety where employees are encouraged to speak up without fear of retaliation or reprisal makes it more likely that internal whistleblowers will pick up on and report unwanted behaviour that a fellow employee is engaged in outside of the office.
Over the last few months, traditional monitoring activities have likely demonstrated that there’s been no significant increase in employee misbehaviour. However, do not let these metrics fool you into believing that everything is okay. While compliance, fraud and IT monitoring activities are fundamental to identifying missteps and irregularities, in a mass work-from-home environment, other activities that were once considered “supportive” and not key in risk mitigation may be more effective. Frequent, scenario-based education and communication at all employment levels, emphasizing whistleblowing programs and creating psychological safety will help a corporation reduce the likelihood of ethical fading. While our daily dress codes may have temporarily changed to t-shirts and jogging pants, it doesn’t mean that corporate ethical standards can’t remain in formal business attire.
Kerri A. Salata is a lawyer and Director in the Ethics and Conduct Office of BMO Financial Group, where she specializes in ethics, culture and conduct. Connect with her on LinkedIn.
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