The Final 6 Psychological Phenomena Undermining Your Compliance Training

more+
less-

This is the final part of my four part blog series on the psychology behind bad behavior. In this blog I will cover reasons 22-27 that good people do bad things and how we can use this information to modify compliance training. Miss the first three posts? Check out posts one, two and three.

22. The Induction Mechanism

Perhaps due to one of the aforementioned psychological reasons good people do bad things, someone has already behaved in an unethical manner. The induction mechanism postulates that the more people behave badly, the less they perceive the behavior to actually be bad.

Takeaways:

When I think about the induction mechanism it makes me think about The Network’s “mind map.” When our customers take advantage of our entire GRC suite – this means Policy Management, Incident Management, CAPA (Corrective Action, Protective Action)/Remediation, Compliance Management (Reporting/Surveys) and Training & Communications – they are able to create a mind map for each of their employees, pulling in information from each system. While you hope that your policies, training and awareness materials will effectively deter your employees from making unethical decisions, if it does occur and then continues to occur due to the induction mechanism the mind map or similar technology allow you greater transparency into your employees’ actions.

Our current GM of Training and Communications likes to tell the story of a rogue employee at a previous company she worked for that was written up for harassment and discrimination. The investigation ended up being dropped and the employee merely given a warning, because it appeared to be their first offense. Later, the company discovered that it was actually the employee’s 9th time being written up for harassment and they had missed it, because the incidents had occurred while the employee held different positions and worked at different locations for the company. If the company had the visibility that a mind map provides they would have been able to deal with the issue much sooner.

23. Market and Shareholder Pressure

I recently watched the movie “Jack Ryan: Shadow Recruit.” In the movie, Jack Ryan works as a Compliance Officer on Wall Street – but, he’s also undercover CIA. At the beginning of the film Ryan uncovers what appears to be illegal activity from one of his firm’s Russian partners. When Ryan brings the information to his boss, asking for his permission to travel to Russia to do an audit of the company, his boss cautions him to be careful, stating that their partnership and continued business with this company is crucial to their success. In essence, he is telling Ryan to weigh the risks.

For public companies, market and shareholder pressure is huge. Before the housing bubble burst in 2007, banking professionals were aware of the risk and “bubbliness” of the market, but stayed on the bandwagon. Former Citigroup CEO, Charles Prince was quoted in Business Insider, as saying of the market in 2007 “as long as the music is playing, you’re got to get up and dance.”

Takeaways:

One of my best friends used to be an internal auditor for FOX; I remember her telling me how much she disliked her job, because every time she started a new project she was always met with disdain and dislike. People don’t like auditors! Which is a shame because auditors and all compliance professionals are just trying to help us stay out of trouble. The first step for a compliance professional dealing with employees who are under market and shareholder pressure is to gain their trust. Let them know that you are on their side, “one team, one fight!” If you can effectively communicate this to your employees and talk through the pressures they are under, you will have more transparency and will have a better chance of being able to mitigate risk.

24. The Compensation Effect

I come from a fairly religious family. My grandmother literally grew up in a Catholic Church in Yugoslavia (and I mean literally, her father was the organ player and they lived in the church.) However, life wasn’t easy for my grandmother. Her father repeatedly told her he had not wanted her (she was the reason he’d had to marry my great grandmother) and on top of that she was half Jewish in a time when it was very unpopular to be Jewish. And, although she didn’t ask for it, she was given several opportunities to be a hero. I grew up hearing over and over how she saved the father who hated her from drowning and about how before escaping a Nazi concentration camp, she took apart several of the enemies’ weapons. My mother would then mention to me that if it were possible to store up good will, our family must have a ton.
Dr. Muel Kaptein refers to this as the “compensation effect” or the idea that you can accumulate “ethical credit.”

Takeaways:

Part of me wants to say, “Don’t trust anyone!” After all, that’s what this theory is really saying, right? That people who are really, really good feel that they have earned a “get out-of-jail free” card? I sound so cynical! Of course as we’ve learned from the other theories, people also tend to act the way they think others perceive them. So, we need to treat everyone as if we know they wouldn’t do anything unethical, while being aware that everyone is capable of anything. Whew! Did anyone tell you when you signed on to do compliance that you’d become a mind ninja?!

25. Negative Consequences of Transparency

While transparency is for the most part a good thing, sometimes when conflicts of interest are publically disclosed they become more socially acceptable.

Takeaways:

Continue to promote transparency within your organization, but make sure to use your awareness materials and compliance training to clearly define conflicts of interest. Supplement your classroom and online training with vignettes – short 1-3 minute video’s that reinforce training ideas between training periods.

26. Bad Communication

At our last regional event in Seattle, Lori Tansey Martens, President and Founder of the International Business Ethics Institute shared an example of a possible facilitation payment scenario. In her scenario, an employee is travelling back to the US from a foreign country. When they are coming through customs the agent asks for a $50 payment from the employee to bring their laptop through. The employee asks if a receipt can be provided and the agent merely blinks.

After opening up the scenario for discussion in the room, Lori mentions that she had recently shared this scenario with a client and had told them they were more than welcome to use it in their FCPA training. She said she was shocked at the response she got. Her client said they did not want to use the example, because they didn’t want to give their employees any ideas of what could occur and how they could get around the policies they had in place that said “We NEVER make facilitation payments.”

Takeaways:

You need to communicate with your employees! Not all situations are black and white, so you can’t teach only black and white situations – that will only open you up to more risk. Instead also prepare your employees for what is more likely to happen in your code of ethics training – the gray situations.

27. The Pressure to Conform

If you work for a company that doesn’t seem to value ethics, there will be a greater pressure for you to conform.

Takeaways:

Look at the recent scandal within American Apparel – Dov Charney racked up an impressive list of allegations over the years, yet everybody went along with it. Charney did not attend mandatory sexual harassment training, and even discouraged his employees from going. I wonder what their completion numbers were! After all, if your CEO told you not to attend a training, would you go?

This completes my series on the 27 lies your compliance training (and business ethics training) need to address. Let me know how you’re going to improve your compliance training as a result, in the comments!

Topics:  Best Management Practices, Chief Compliance Officers, Employer Liability Issues, Ethics

Published In: General Business Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© The Network, Inc. | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »