When CEOs don’t give a damn
Headlines grab attention, says ethics expert Jane Arnott, and that’s needed when 70% of NZX50 CEO’s neither formally nor personally champion their Code of Ethics – such a code being a requirement of listing.
Caught in the glare of the Ethics Conversation’s first report, these CEO’s are arguably turning a blind eye to their company culture to, instead, focus on other priorities.
The sectors represented by such absent CEOs are worrying. Retirement villages and property stocks feature, as do software stocks.
The report titled ‘Codes vs Commitment: An Assessment of the Codes of Ethics (or Conduct) of the NZX 50’ holds the veiled conclusion that when the highest paid executive runs south of the ethical underpinning of either company culture or their own leadership, investors need to be wary.
Central to this line of thinking is that speaking up is integral to a strong Code of Ethics but without equally strong leadership, little is gained in terms of supporting a speak up culture.
This brings forward the question. Could a Code with dubious adherence contribute toward behaviors such as turning a blind eye to fraud or health and safety lapses?
And the answer? It probably does. When 70% of NZX 50 CEO’s ‘don’t give a damn’ it’s highly likely that their employees won’t either. Speaking up will not be in their domain, nor on their radar, nor any of their concern. Instead they will just get on with their job.
The problem is that just getting on with the job usually means constantly turning a blind eye.
Consider the Canterbury Rebuild and the fact that over 7000 homes are now having earlier repairs repaired. No one noticed wrongdoing, short cuts, inferior product substitution or, rather, no one spoke up about it.
Similarly the Ports of Auckland where the former CEO held close a Code of Ethics that he was not seen to endorse, was not communicated and was written in a language that failed to connect with a highly diverse workforce.
Avoidable workplace fatalities occurred … but so too a passionate office affair that led to $368k of ratepayers money being stolen and over $100k in legal fees dedicated to chasing up justice. All thanks to an elaborate and lengthy fake invoice scheme that remained undetected. Or, once again, was it just that no one bothered to speak up?
Speaking up – the ability to call out or call in bad behaviour – relies on support from the top and throughout each tier of management. Apprehension around the implications of speaking up is always a barrier to be overcome.
A committed CEO will know this – and will care.
Effective speak up goes hand in hand with early intervention and, consequently, has a learning focus more than a disciplinary one. And internal and external speak up options need to be available. But always consider these options from the perspective of the employee – not the Board of Directors.
World leading, uncompromising audit and professional service companies don’t come with brands or fees that invite all and sundry. Nor are they positioned as the most approachable ear for the softly spoken junior who doubts they will be believed – or the surly sharemilker, wharfie or other blue collar employee who has finally decided to face their fears.
This role is better placed with those that lean towards the reliable and listening friend with a much lower profile and less need to blow their trumpet. And so it is, when workplace culture is flailing and a lack of engagement at a leadership level is evident, the significance of speaking up becomes amplified.
But the heavy lifting – if not from the top – is best achieved when outside sources are approachable, enabled and trained to elicit the material that is needed to support an investigation.
We’re talking down to earth people with a singular focus and everyday regard for personal wellbeing at the coalface. Because its at the coalface that, when a company’s reputation falters, real jobs are lost and livelihoods are ruined.
It’s at the coal face that, frankly, they do give a damn.