In the past year, we've seen ethical failures and the scandals that follow lead to the decline of many major companies. It was about a year ago that Susan Fowler, a former Uber engineer, posted a report on her blog that pulled back the shades on Uber's hyper-competitive, frat party-like office environment. Her details of rampant sexism and bureaucratic failures outraged many Uber customers. In response, instead of hailing a ride, customers used their phones to rally around hashtags like #antiuber and #DeleteUber, as thousands of them deleted their Uber accounts and moved to competitors like Lyft and Juno.
More recently, sexual misconduct allegations have forced Steve Wynn of Wynn Resorts to step down from his position as Chairman and CEO, losing any potential for severance pay. In the wake of his announcements, Wynn Resorts' shareholders have filed charges against the board of directors, claiming that the board knew the risks Wynn's alleged behavior put the company in, but failed to do anything about it.
And in February, we learned that a trio of German automakers - BMW, VW and Daimler - supported research that intentionally exposed humans and primates to exhaust fumes in order to help prove their diesel engines were, in fact, cleaner. Ironically, some of these engines were equipped with the fraudulent diesel exhaust kit that landed VW in so much legal and public relations trouble last year. While it is unclear how this latest revelation will affect these companies, the previous exhaust scandals cost Volkswagen somewhere in the neighborhood of $25 billion, not to mention drastically tarnishing its public image.
While company spokespeople will often try to minimize such scandals by placing blame on a few bad actors, what is clear in many cases is that something in the company's corporate culture has encouraged or allowed the problematic behaviors to exist. Writing for the Brookings Institute, Larry D. Thomson described corporate culture as, ''a web of attitudes and practices that tends to replicate and perpetuate itself beyond the tenure of any one individual manager.'' If corporate reputation is the story outsiders are telling each other about your company, then corporate culture is the story insiders are telling themselves about the company. Framing this story is an important part of creating a productive, positive place for your company and employees. In the space below, we'll look at some key steps to building a positive corporate culture and consider what other companies have done to promote a negative one.
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Codify Your Expectations
- Compliance Codes define required company or employee actions in relationship to ethical behavior.
- Corporate Credos explain a company's accountability to its stakeholders.
- Management Philosophy Statements outline the management's positions and required actions pertaining to business ethics.
- The company's commitments to its employees
- Employee honesty expectations
- Sexual harassment and discrimination policies
- Product and workplace safety
- Confidentiality of records
- Policies relating to drug use
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Start at the Top
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The Carrot and the Stick
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Involve HR
Conclusions
Cultures are meant to last. They are the outward behaviors of a collective of people; an understood way of being that is larger than any individual member. That said, cultures can be shaped and cultures can be changed, particularly in the corporate setting. By being aware of the type of culture your company embraces, you can help avoid the disastrous consequences of poor ethical choices and guide your company to further, lasting success.Media Highlights
Environmental, social and governance (ESG) issues have become more complex and multifaceted than ever before. At the same time, ESG continues to ascend on board and leadership agendas.
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