Commitment From the Top

21 Mar

Commentators like me argue about the most important element of a compliance program.  Some say due diligence, some say policies, some training.  A common answer, however, is “tone from the top.” 

I once defined “tone from the top” as:

a visible willingness by senior management to let values drive decisions, to prioritize those values above other factors—including financial results—and to expect all others in the organization to do the same.

I’ve been told that “tone from the top” has been replaced by a meatier phrase, “commitment from the top.”  I would still define it in the same way.  Essentially the entire discussion around tone/commitment from the top revolves around the same thing: which comes first, revenue or ethics, when you can’t have both?  Compliance officers will tell you that their job is to be a creative solutions vendor for the business (at least, good compliance officers will tell you that).  To get to “yes.”  Sometimes, however, the answer is “no.”  Sometimes, it’s “not only no, but ‘hell no.'”  Ethics is what happens next.

Tom Fox, quoting the Harvard Business Review, calls this “overvaluing outcomes.”    Results trump compliance. 

A quick question here: how is your sales team measured?  For 90% of you, I bet the answer is “how much they sell.”  Is there a compliance component?  What happens if, at the end of a deal, the counterparty throws in the need to pay a “special administrative fee” to a government official?  If your salesperson is a tremendously ethical person and loses the deal because he or she refused to pay the bribe, what happens?  Does his leader quote from Glengary Glenross and yell, “get them to sign on the line that is dotted!”  Or does the CEO call out the employee on the next all-employee call for special recognition of his ethics? 

I once heard a definition of integrity as how you act when no one can see you.  The same applies in business.  The best gauge of a company’s ethic is how employees act when the compliance officer is looking the other way.  I once had a situation where an employee I knew, and who I had worked with in the past, came to me with an issue.  She told me that when she told her colleagues that she was going to bring the issue to my attention, one of them asked her why she would “show her dirty laundry to Compliance.”  It’s an example of a great compliance win, and a huge loss, at the same time.  I had a great ethical force multiplier in the woman I knew, but someone else in the organization just didn’t get it.  How does the company deal with employees when they are a top salesperson, but show unethical tendencies?  Is the only judge of a person’s worth to the organization found in their sales numbers?

These are questions that the company needs to answer before it can claim it has good “tone at the top.”  It’s not just about a CEO posting a video on the intranet anymore.


One Response to “Commitment From the Top”


  1. Compliance Bits and Pieces for March 26 | Compliance Building - March 26, 2011

    […] Commitment From the Top by Howard Sklar in Open Air […]

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