Michael A (not his real name) works for GM, one the world’s largest automotive companies, in the US. Michael and a group of colleagues have been wondering what to do about a faulty ignition switch on GM cars.
Apparently a customer could be driving along at 70 mph and accidentally knock the keys in the ignition and cause the motor to stall.
Michael A’s suggestion which his colleagues really like is to call this fault a “customer inconvenience” which means it’s not a safety issue involving an expensive recall of cars needing to be fixed.
What do you think of Michael A’s suggestion?
I thought so!
Let’s now meet Michael B (not his real name) who works for GSK, the global pharma company, in China.
Michael B has just put forward a scale of payments to doctors in Chinese hospital that includes both cash and incentives to attend international conferences at GSK’s expense. The payments are to persuade the doctors to order GSK products, although such outlays are clearly bribery in both US and Chinese terms.
What do you think of Michael B’s suggestions?
I thought so!
Finally, meet Michael C (not his real name) who is a senior executive in BNP Paribas, the French mega bank. Michael C has just come from a senior team meeting where he put forward the suggestion that the bank could make lots of money facilitating transactions with Sudan, Cuba and Iran, currently banned by the US authorities as facing sanctions.
Michael told the meeting how the bank should go about concealing the prohibited transactions and cover its tracks. His senior colleagues agreed and when a legal colleague tentatively suggested his line of reasoning wouldn’t wash, Michael C used his full authority and gravitas to pooh pooh the concern.
What do you think of Michael C’s actions?
I thought so!
It is hard to imagine what sort of person could think a faulty ignition mechanism as a “customer inconvenience” especially travelling on a motor way if it cuts out. Or what kind of a senior bank official would deliberately devise and promote sanctions busting actions which would potentially damage the bank’s reputation if discovered, let alone suffer the resulting fines.
It’s a little easier to imagine the sort of person who thinks bribes in China is OK, given the history of corruption in that country. Even so, such an individual is hardly going to gain a reputation for integrity or trustworthiness. Deviousness perhaps.
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What lessons can we draw from these brief encounters? Do we dismiss the three Michaels as mad, bad or worse, actually evil? All of them got fired or found their careers stalled once their damaging behaviour surfaced. Or do all three tell us something more fundamental about the system of compliance in their companies—or lack of it?
What all three rogue employees represent is not so much the failure of conventional compliance as the absence of ethical engagement. Reduced to its essentials, ethical engagement is about winning employee commitment to a set of company values that inspires them and make it relatively easy to decide what’s right and what wrong, and what’s acceptable and what’s not.
Ethically engaged employees are more willing to speak up if they see something wrong or that puts their organisation at risk of damaging its reputation. –see chart 
Ethical engagement means going “beyond compliance”. So far, relatively few organisation have embraced this way of working. Many are still struggling to handle the torrent of regulations that just keeps coming.
Ultimately, ethical engagement is the only way an organisation can hope to prevent the Michaels A, B, and C of this world from putting their organisations at risk, at creating situations where their reputation can be shredded in the full glare of the media.
Pursuing ethical engagement is hardly rocket science. It is really an extended branch of the engagement work that many companies have already found can radically improve performance. Here are some of the basics:
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1) People like the company’s values seeing them as close to their own in certain ways.
2) The company goes beyond basic compliance training and involves everyone in developing their moral compass, in understanding ethical choices.
3) Employees are helped to be confident about speaking up about potential mal practices and know where to go to raise their concerns and trust the organisation to protect them if they do
4) People receive regular practice at dealing with difficult choices that may have an ethical dimension
5) Employees take ownership of the joint task of reducing or avoiding reputation risks and resist actions by others that could undermine corporate integrity.
6) Employees see their leaders lead by example of personal integrity and try to emulate them
7) Employees take for granted the long- term perspective is more important than the short term one and build that into their own thinking and actions
