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‘A Straight-Jacketed, Compliance Culture Doesn’t Equate to An Ethical One’

‘A Straight-Jacketed, Compliance Culture Doesn’t Equate to An Ethical One’
15-Dec-2014

Encouraging empowered judgement on matters of ethics is actually an inherently less risky proposition than creating an environment in which management and employees are straight-jacketed by a heavily-regulated, "compliance culture".

Executive Director of Australia’s St James Ethics Centre (an independent "public benevolent institution"), Dr Simon Longstaff, says that, in an attempt to minimise risk, senior management and directors often look towards what they believe is the greater certainty of highly prescriptive rules and regulations, and systems of surveillance.

Dr Simon Longstaff AO, Executive Director, St James Ethics Centre

Dr Simon Longstaff AO,
Executive Director,
St James Ethics Centre

What this creates, he says, is a worrying divergence between what individuals would do under their own steam in a situation where ethics are at stake, and what they will ultimately – or automatically – do when wearing their corporate hat.

Worse, he says, while an individual manager might once have inherently known the ethically "correct" decision to make in a set of circumstances, he or she will eventually lose that ability if "straight-jacketed" by rigid rules and procedures manuals that dictate a certain, non-negotiable approach.

‘Use It or Lose It’

"At an individual level, someone might relate to the world with ethics while, at a corporate level, their own good judgment gives way to a compliance culture," says Dr Longstaff. "When an individual is fixated on compliance, they perceive that their personal responsibility for making ethically correct decisions is voided – and, over time, they lose the ability to exercise this judgment ‘muscle’.

"But these heavily regulated environments often – given the lack of human input – produce not only less than desirable but, also sometimes, less than truly ethical outcomes.

"Disempowering the individual manager or executive such that that person is no longer operating in conscious alignment with his or her declared values and principles actually represents increased risk to the corporation. Eliminating judgement from a decision-making process involving ethics creates a greater degree of systemic, unseen risk. It’s like putting the organisation in a plaster cast in order to ensure everyone is standing up straight. You’ll have this scaffold of rules and regulations but, inside the cast, their muscles are withering away.

"Management thinks it’s creating a scenario where – by removing the need to think and exercise choice – they’re creating safety. But what happens when the rules run out in any given situation, or they’re not consistent, and no-one has the capacity to make a decision; they’ve just been taught to obey?"

‘Don’t Follow the Checklists into the Ground’

Dr Longstaff says that while any responsible organisation should, of course, have its suite of compliance manuals, "you don’t want to create an environment in which the pilot follows the checklists into the ground. And that’s happened in more than a few, very high profile cases."

For the past decade he’s worked with the Australian Defence Force (ADF), preparing soldiers for deployment in destinations like Afghanistan.

"The ADF has determined that you cannot achieve your objectives and maintain a proper degree of safety through the application of a compliance regime. It has developed an applied philosophy of ‘common intent’, based on a particular model of leadership.

"The definition of leadership in the ADF doctrine is:  ‘The exercise of influence in order to bring about the willing consent of others in the ethical pursuit of missions.’

Focus on Leadership First, Management Second

"It’s not about command and obedience, it’s about responsible decision-making and empowerment. So, even in our armed forces, progressive leadership has recognised that to mandate blind compliance is to create too great a risk – and with potentially fatal consequences, in this particular working environment.

"ADF focuses on developing leadership skills rather than just management skills – important though these are, of course. There is a firm emphasis on creating a modus operandi whereby a commander outlines a defining purpose or mission, and a set of core values and principles, and then the individual carries these within himself or herself as his or her internal compass. In that way, if plans fail or communications networks break, or if the chain of command is severed, the individual still knows not only what to do, and not only how to do it, but also why.

"Many people in the corporate world take exactly the opposite approach. Instead of focusing on leadership they focus on management. And instead of focusing on responsibility, they focus on compliance."

‘Get Very Clear on Your Purpose & Principles’

In answer to the question, "How would an organisation reverse its practices and get started down this alternative and more effective road?", Dr Longstaff advises:

"First you’d get very clear on your defining purpose.

"Second, you’d define your supporting core values and principles.

"Third, you’d look at how these apply in the context of your stakeholders.

"And fourth, you’d identify what rules and regulations are non-negotiable under any and all circumstances and therefore require a good degree of specificity.

"In short, you’d create a new environment in which there is a shared understanding of the organisation’s principles and values, combined with a framework and an appropriate level of power to exercise judgement in accordance with these.

"It’s in the interests of the organisation and everyone in a position of authority to constantly re-evaluate the extent to which they are fostering an environment of compliance versus one based on actual ethics.

"But don’t be foolish about this. Don’t go off and throw all of the regulations out. Rather, seek to achieve a proper balance, and an organisation based on true values and true meaning."