The Unique Culture of a Start-Up


Building an Ethics & Compliance Initiative

Keith Rabois, COO of Square, left his job last month, citing legal threats from a young colleague with whom he had a two-year relationship, which subsequently threw a spotlight on the risks associated with the freewheeling startup culture that many entrepreneurs cherish. As discussed in the recent Reuters’ article, Rabois’ departure highlights specific “growing pains at tech start-ups.”

Start-up companies and entrepreneurs are notorious for thriving in an open environment with scant boundaries within their organization. The intent, of course, is to build a very specific rapport with employees and develop a company culture that emphasizes a “think different” attitude and rewards non-conformist ideas.

Some simple do’s and don’ts can help alleviate some of these pains while at the same time establish a company culture that fosters creativity, innovation and growth.

  • Don’t assume you need a formal structure and Full Time Ethics Officer.
  • Don’t assume one size fits all. Instead, Do begin by identifying your risk exposures and focus first on mitigating those specific topics.
  • Don’t stifle creativity and morale with unnecessary bureaucracy and/or requirements (like having to annually certify to a long list of policies, most of which have nothing to do with your employees actual duties).
  • Don’t name yourself (CEO, Founder) as the Ethics Officer.
  • Do choose the person to oversee Ethics & Compliance (even if only Part Time) carefully.
  • Do remember that you will need to sell the need for Ethics & Compliance to all constituents. Make the business case.
  • Do keep it simple and direct – a five minute discussion by supervisors once a month on an ethics topic may be the most effective approach.
  • Do keep a broad, open perspective on what constitutes an Ethics & Compliance issue (in your company it may include what typically falls under Corporate Social Responsibility).
  • Do go to where your employees ‘live’ – if they do all their research on-line, then create an online Code and/or policies; if they work through collaboration, design training to be conducted in groups.

The bottom line is that growth does not have to quash entrepreneurial spirit. Following the rules of ethics and compliance can actually ease a path to a more integrated culture. A few guardrails and guidelines paired with process and accountability go a long way toward engendering employee loyalty, boosting morale and maintaining a bit of that non-conformist attitude.


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.

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