GC Futures 2016: 'Sometimes, losing money should be rewarded'

By Kathryn Higgins

09 November 2016 at 09:31 BST

Six key take-home insights on how general counsel can help champion ethical corporate culture from this year's GC Futures Summit 2016

From left to right: Lucozade Ribena Suntory GC Mollie Stoker, Mangiarotti GC Serena Grosso, and Fujifilm Europe GC Oboama Addy.

The question of ethical culture in corporations is one very close to the heart of K&L Gates partner Christine Braamskamp. Chairing the panel session on ‘Shaping an ethical corporate culture’ at this year’s GC Futures Summit in London, Braamskamp spoke of her experiences witnessing the consequences for companies and individuals when ethical conduct goes terribly awry. She explained: ‘Having spent the last 20 years holding the hands of those people that go to prison, standing at the cell door, pushing them through at that last moment, it becomes very clear that when you deal with an audit director, a finance director, a compliance officer who’s facing prison… that you can actually trace back from what you’ve seen and what the conduct is for which that individual is now sentence – you can typically trace it back to particular incident, and that incident is then steeped within the culture from which it arose.’ 

So, what does it mean to have an ‘ethical culture’? And what is the role of a GC in helping to foster one? Braamskamp, together with panelists Lucozade Ribena Suntory general counsel Mollie Stoker, Mangiarotti general counsel Serena Grosso and Fujifilm Europe general counsel Oboama Addy, had the following insights to share:

There is no possibility of building an ethical corporate culture from scratch. No longer how long you’ve been with an organisation, there’s always existing cultural baggage that needs to be accounted for when fostering ethical behaviour and culture. Clear communication, open debate and a collaboratively-built vision that takes into account the other cultural facets of the company are the only way to help work ethics into an existing company culture.

You can’t foster ethical behaviour without leading by example. It’s important that GCs offer staff tools to help guide their ethical compasses, but making sure you as a GC follow them yourself is equally important. If employees lower down the chain are asked to comply with procedures or ethical guidelines that they don’t see reflected in management, then fostering a sense of ethical corporate culture will be impossible. Tools and guidelines offered to staff will just seem like another checklist, not a cultural foundation for the entire business.

Managing ethics on a global scale requires an understanding of geographical differences. More often than not, large companies have quite diverse cells in different locations around the world that often operate in very different ways. Developing a strategy to help ensure consistent ethical standards across a company’s entire global network will require considering each location in terms of its own challenges and its own cultural starting point.

It’s also worth remembering that ‘knowing your audience’ goes far beyond location-specific considerations. Keep in mind that your main audience within the company is not made up of lawyers! As such, ethical conduct needs to be discussed and hammered home in a way that is relatable to people across different levels of the business, not with a long, boring PowerPoint presentation on compliance.

Remember that fostering ethical culture begins at home. Ensuring lawyers and employees are treated ethically is a crucial first step to ensuring that they in turn act ethically in their dealings with clients, customers and the wider business. Upon joining Fujifilm, Addy knew he had to ‘walk the talk’ on ethics as a manager before he would be able to shape ethical culture company-wide as its top lawyer: ‘The way I look at [ethics] is really from a nuclear standpoint. How do I as an individual manage the legal function? This is very dear to my heart, and I like to lead by example,’ he said. ‘One thing I’ve found in the legal department, for example, is crazy working hours being sort of the accepted norm and also the expectation from clients and management. Finding myself in this environment, one step I took fairly early on was to introduce the concept of work-life balance.’

Be specific. Set value-based targets throughout all level of the business, and ensure compliance as you would with legal regulations or financial targets. This means thinking about what ‘ethics’ means within your  organisation – is legal compliance enough, or is more expected? Once the standards are clear, rewarding good ethical behaviour is just as important as punishing transgressions and keeping people in check, argues Stoker: ‘Employees need to see that people who do the right thing get praised for it, get promoted, get moved forward in the business, and those who don’t go. They’re out. It’s not acceptable. You almost have to be quite harsh about it. I think there’s no room for it not be,’ she said.

Accept that ethical conduct won’t be value-adding in every single instance, but adds value in the long-run by avoiding devastating fallouts. Sometimes, making the ethical decision will involve losing money. However, avoiding the fallouts that can stem from massive ethical failures – be they reputational damage, fines, or even jail time for executives – always makes good financial sense. By consequence, when employees are bold enough to stand up for an organisation’s ethical principles even when doing so means a short-term financial loss, this should always be encouraged and rewarded by those at the top. 


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