The HR Puzzle

One challenge many ethics and compliance officers face is working with HR. The puzzle is that it is not always easy to get along with HR. In fact, in some organizations the HR function is derisively described as “Fortress HR.” I take a look at why this relationship is troubled from the perspective of HR in the most recent issue of Workforce magazine. You can read the article at http://www.workforce-digital.com/read-wf/december_2015?pg=44#pg44.

How Could Volkswagen Do Anything So Stupid?

Volkswagen is a company known for technological prowess and market innovation. This raises the question of how the company could engage in a plot as plain stupid as trying to trick emissions tests. I share my thoughts on this apparent puzzle in a recent piece that appeared in the business section of the Huffington Post. You can read it at http://www.huffingtonpost.com/mark-pastin/volkswagens-dumb-culture_b_8270264.html.

Ethics Crises

I have an article about how to address an ethics crisis, which includes most business crises, at http://www.huffingtonpost.ca/mark-pastin/business-ethics-crisis-solutions_b_8096754.html.

Comments are always welcomed and answered as possible.

In an Ethics Crisis Find the Root Cause

In an ethics crisis, it is not enough to know what happened; you need to know why it happened. Most organizations can survive a single ethics crisis. But if the same conduct is repeated, even if by different individuals, this will fix the negative impression of the organization in cement. Organizations tend to want to keep changes to a minimum, as big changes seem to be a further admission of culpability. But you need to be sure that you have changed personnel and systems sufficiently that the same conduct does not recur.

In an Ethics Crisis Assume the Government Will Be Involved

When an organization does something viewed as unethical, the public wants someone to do something about it. And that someone is likely to be “the government.” Most organizations are open to some level of government oversight. When the government comes knocking, you can expect to hand over most everything you know about the crisis. Why? Even though some of the material may be covered by legal privilege, the government will find you uncooperative if you “hide” information. Your reasoning about the crisis needs be premised on when the government finds out rather than whether the government finds out.

In an Ethics Crisis Consider the Impact on Your Employees

A big risk in an ethics crisis is that your own employees will conclude that unethical conduct is the norm in the organization or at its highest levels, and adjust their behavior accordingly. In an ethics crisis, employees often learn about the crisis from the media. Organizations tend not to communicate openly with their employees about such matters, leaving employees to believe what others are saying. You risk an unplanned change in corporate culture unless you credibly communicate the organization’s position to its employees.

In a Crisis Investigate Quickly, Objectively and Thoroughly

In an ethics crisis, you need to know what happened, who did what and who knew about it. An investigation into an ethics crisis cannot follow the usual internal investigation protocol since those running the investigation may be implicated in the crisis or in covering it up. You need an independent investigation. Even if you conduct the investigation under legal privilege, anticipate that the investigation may become public and that you may eventually be required to share the investigation with regulatory or enforcement authorities.