How Ethical Processes and Behaviours Can Positively Influence Corporate Culture
Apologies. Companies are sociopathic entities. Not all companies act sociopathically, but their key role is to generate profit for shareholders. As a CEO, I bristle at this statement, but I stand by it. Read on, there is a but coming.
It is the individuals that run the companies that dictate how they run, what their mission and values are, how employees behave and what objectives, other than profit, sit at their core. This additional layer, which is so crucial in today’s world, provides an ethical compass for companies, a soul, if you will.
Where does this “soul” sit within a modern enterprise? Certainly, it is senior management which gives birth to it, nurtures it and espouses its values, but other departments are also intimately involved in promulgating, maintaining and enforcing the values and ethics of the organization. The HR and compliance departments clearly take a lead in helping to provide internal stakeholders with a set of values and ethics by which the company operates.
Influencing How Counterparties Behave
However, many companies have influence not only in affecting how ethically its employees behave, but also in how its third parties, vendors, agents, and partners conduct themselves. For instance, when a sophisticated enterprise brings in a new agent or vendor, they set down a set of requirements, some technical, some process related and others behavioural, which must all be met. As the onboarding process progresses and procurement, supply chain, IT, compliance and legal all provide their own compliance controls, there is a significant ability to influence how these counterparties behave and to regulate their activities.
This empowers these enterprises to not only protect against liability, but also to assist their own supply chain and third-party universe to employee techniques, technology, systems and processes which also lead them to operate more ethically.
The Domino Effect
Cascading risk, compliance, social responsibility and ethics to third parties creates a domino effect, ensuring that they operate in an ethical ecosystem. IT, supply chain, compliance, legal and procurement all have roles in ensuring that they have implemented solid controls and that they have the opportunity to provide tools to third parties to do the same.
Let’s give an example. Data privacy is becoming a major societal concern. As enterprises implement controls to establish that their vendors and the third parties that control client data meet their standards, they are also in a position to help those counterparties understand the requirements and ensure they are effectively implemented. For instance, when Company A establishes that Supplier B holds a subset of their client data, they are in a position to establish that Supplier B has adequate data privacy controls, but that they are also in a position to tell them what needs to be done to meet their high standards, how to achieve this compliance and also to help them, in turn, establish their own control of Supplier B’s third parties. In the end, society wins because best practices for data protection are socialized as they are cascaded down the supply chain.
I believe that this virality of implementing ethical processes and behaviours has the ability to positively influence corporate culture and behaviour across huge swaths of industries. Helping to affect this change is what we at Blue Umbrella work towards every day through third party compliance technology. Our mission is Making Business Better and we are dedicated to doing this through our technology, research and services.