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GRC Professional : GRC Summer 2012
IN THE OFFICE 34 GRC Professional • Summer 2012 Case study: Endeavour Energy The leaders of NSW’s state-owned electricity distributor, Endeavour Energy, took the view that fraud and corruption prevention in an organisation needs to be supported by an ethical culture. To achieve this goal, they committed to a five-year Ethics Communication and Engagement Strategy to build employee skills in ethical decision-making and put in place the appropriate organisational infrastructure to support this goal. The strategy was endorsed by the Board, and the Executive Leadership Team signed up as active and visible advocates for managing workplace ethics as part of good management practice. A key element of the strategy was to design and deliver an ethics training program. Already in its third year, the program has been a success with ongoing metrics showing that employees’ awareness, skills and commitment have increased year-on-year. The program was branded as: “Make the right choice”. I t featured manager- trainer resources that focused on authentic workplace risk scenarios that were researched with employees. These were fictionalised into short dramas made into DVD-based scenarios which Endeavour’s managers used to facilitate ethics dialogues with their employees. The program progressively dealt with seven separate features of workplace culture: 1) appropriate use of assets; 2) secondary employment; 3) probity in procurement processes; 4) delegation of authority; 5) behaviour towards others; 6) perceived conflicts of interest; and 7) time fraud. In the discussions, employees and managers also explored how the corporate values were, or were not, put in practice in each scenario. The organisation’s Code of Ethics was expanded with practical tools, including an ethical decision-making model, a ladder of escalation and checklists. Use of the Ethics Hotline was also promoted. A key feature of the ethics training was the promotion of personal and collective accountability for ethics and risk management, and defining how everyone had a role to play in fraud prevention. The program provided tools to assist with ethical decision-making to make it safe and easy to raise concerns in early stages before a serious issue developed. large project with AIA Group (Asia). They had established their Compliance Learning Academy and saw that business ethics was an integral part of the compliance discipline. They put 350 of their most senior managers from across the region through an ethical leadership program as a first step. Subsequently, they began rolling the program out across member companies and supplemented this training with an e-learning program using dilemmas and scenarios to reinforce the face-to-face learning. An ethical viewpoint While a compliance review might begin by asking: “What went wrong? Was this the wrong thing to do?”, an ethical orientation begins by asking: “What was the right thing to do and what contextual pressures might have shaped the choices made?” The questions from the compliance viewpoint often restrict any analysis to one of adherence or non-adherence to existing policies, whereas the questions from the ethical viewpoint take a systemic approach and open up enquiry that takes account of the dynamism in which the world of work exists. It encourages a review of all possible actions and consequences on the part of an extended range of stakeholders. If the proposed action is deemed inappropriate in the light of new developments or new information, inquirers are led to consider other options to achieve the same objective and at the same time protect the enterprise. An ethical inquiry grounded in objectivity and fairness can often mean reconciling several different perspectives about what is the most appropriate action. Very often the employers and employees have different perspectives as to various stakeholder accountabilities and this approach necessarily expands the range of choices to be canvassed. Finally, the ethical orientation addresses the human needs that drive all actions. Most people need to be able to understand the ‘why’ behind a compliance policy before they show much interest in its implementation. Ethical enquiry addresses this need and speaks to the higher order values that we all aspire to. The tone from the top The importance of getting buy-in from the top regarding the importance of managing culture from both compliance and ethics perspectives cannot by overemphasised. If leaders are not creating the ideal context where people know the rules and the rules underpin what gets rewarded, the organisation is set up to fail. Employees quickly recognise that it is an unfair workplace environment and they do whatever is necessary to make the numbers or keep their jobs. ••• While a compliance review might begin by asking: “What went wrong? Was this the wrong thing to do?”, an ethical orientation begins by asking: “What was the right thing to do and what contextual pressures might have shaped the choices made?”
GRC Spring 2011
GRC Autumn 2012