Principled

S6E16 | Do audit committees impact culture? More than you think.

Abstract:

“As things are changing in the world in which we live, they are changing in the boardroom as well. If you are going to be successful as a company or board, the culture plays such a mission critical role in that for the long term.”

- Pat Condon

Audit committees play a central role in ensuring the financial integrity of public companies and consequently serve as a backbone for overall board governance. They also provide a great deal of the oversight for boards on issues like corruption, fraud, and cybersecurity. But how do audit committees impact the culture, ethics, and compliance of major companies? In this episode of the Principled Podcast, host David Greenberg explores this question with Pat Condon, Audit Committee Chair and board director of Entergy Corporation. Listen in as the two discuss the various priorities of board committees and how they help shape a board’s impact on corporate culture.

 

What you'll learn on this episode:

[2:40] The overall architecture and role of audit committees.

[4:30] How the roles of the audit community have evolved during Pat’s time in the field.

[5:20] How corporate culture informs Pat’s decisions as a board member and audit chair.

[8:05]  Advice for ethics and compliance officers to build a stronger relationship with the audit community.

[11:32] Can audit communities pay enough attention to corporate ethics and compliance discussions?

[16:39] How can culture be measured?

[20:00] The evolving expectations of stakeholders of major companies.

[22:15] What do boards need to change to keep up with evolving expectations?

 

Featured guest:

Pat Condon joined Deloitte & Touche LLP as a partner in 2002, where he provided various consulting and attest services to clients and held a number of regional and national leadership positions until his retirement in 2011. Prior to joining Deloitte & Touche LLP, he was a partner at Arthur Andersen LLP where he provided similar services to clients and held similar leadership positions.

In addition to serving on the board of directors and chairing the audit committee of Entergy Corporation, a Louisiana-based integrated energy company, Pat also serves on the boards of Urban Gateways, a Chicago-based 501(c)(3) organization whose mission is to educate and inspire young people by delivering high-quality, accessible arts experiences that advance their personal and academic growth; and the Brother Rice High School Foundation, also a Chicago-based 501(c)(3) organization. From May 2012 until its December 2015 sale to The Kroger Co., he also served as an independent director and chair of the audit committee of Roundy’s, Inc., a leading Midwest grocery company located in Milwaukee, Wisconsin. And from March 2012 to May 2017 he served on the board pf directors and chaired the audit committee of Cloud Peak Energy, a Wyoming-based coal producer.

 

Featured Host: 

David Greenberg serves as Chair of the Governance and Risk Assessment Committee and a member of the Audit Committee of International Seaways (NYSE: INSW), one of the largest global crude oil and petroleum tanker companies.  Mr. Greenberg’s previous board experience (2006 to 2016) was as the independent director – and member of both the Audit and Compensation Committees --of APCO Worldwide, a private communications and government affairs consultancy and as a director (2013 to 2016) of Clean Tech Group, which creates opportunities for industrial companies to invest in innovative, clean technology.  He also served for 5 years as Chairman of the Board of Trustees of The Keystone Center, a Colorado non-profit that brings together oil, chemical and pharmaceutical companies with leading NGOs to find solutions to complex public policy challenges at the federal and state levels.

Greenberg is currently Managing Director of Cortina Partners LLC, a private equity firm that owns companies in the air medical, addiction treatment, bedding, textile and outdoor recreation industries and is CEO of Acqua Recovery, a residential drug and alcohol addiction center.  He also advises boards and executive teams on strategy, compliance, leadership and culture as a Special Advisor for LRN Corporation, and from 2008 through the end of 2016 was a member of LRN’s Executive Committee. For 20 years prior to 2008, Mr. Greenberg served in various senior positions overseeing government affairs, corporate affairs, communications and strategy at Altria Group, Inc. – then the parent company of Philip Morris USA, Philip Morris International, Kraft Foods and Miller Brewing – culminating in his role as Senior Vice President, Chief Compliance Officer and a member of the Executive Committee.  As one of five senior vice presidents of the corporation, he served on the Management Committee, which oversaw all strategy and company operations.  He was also a principal architect of the company’s very successful efforts to end the ‘tobacco wars’ which threatened the company’s very existence.  Earlier in his career, Mr. Greenberg was a partner in the Washington D.C. law firm of Arnold & Porter and also served as Legislative Director and General Counsel of the Consumer Federation of America.  He attended Williams College and has JD/MBA degrees from the University of Chicago. 

Greenberg has testified before the U.S. Congress, the European Union, the Israeli Knesset and other governmental bodies over two dozen times and has appeared on ABC Nightline, the CBS Morning News, BBC Morning, and the PBS News Hour, and has spoken at leading events for CEOs and boards.

 

Transcript:

Intro:     Welcome to The Principled Podcast, brought to you by LRN. The Principled Podcast brings together the collective wisdom on ethics, business and compliance, transformative stories of leadership and inspiring workplace culture. Listen in to discover valuable strategies from our community of business leaders and workplace change makers.

David Greenberg: Audit committees play a central role in ensuring the financial integrity of public companies, and consequently serve as a backbone of overall board governance. They also provide a great deal of the oversight for boards on issues like corruption, fraud, and cybersecurity. But how do audit committees impact the culture, ethics, and compliance of major companies?

Hello, and welcome to another episode of The Principled Podcast. I'm your host, David Greenberg, LRN's former CEO and now special advisor. I also serve as a board member, governance committee chair, and sit on the audit committee of International Seaways, one of the largest global oil tanker companies.

Today, I'm joined by Pat Condon, audit committee chair and board director of Entergy Corporation, an integrated energy and utility company serving millions of customers in Arkansas, Louisiana, Mississippi, and Texas. We're going to be talking about the various issues and priorities of board committees and how they help shape a board's impact on corporate culture. Pat is a real expert in this space, having served as a director and audit committee chair for both Roundy's, a leading grocery company, and Cloud Peak Energy, a major U.S. coal producer. A former Big Four accounting partner, Pat has also served on the boards of 501(c)(3) organizations such as Urban Gateways and the Brother Rice High School Foundation. Pat, thanks for coming on The Principled Podcast.

Pat Condon: David, I'm happy to be here. As you and I have talked, the role of the audit committee has certainly evolved over the years. I go back long enough that when the audit committees first started, the role was a very narrow one. And we're here to talk about some of the nuances that have evolved over the years, so I'm happy to be here.

David Greenberg: That's great. And before we dive in too deep, let's just set the stage. Why don't you describe, based on your experience, the overall architecture of what audit committees do and the role that they play?

Pat Condon: Well, the role is oversight of financial reporting and the related internal controls behind all of that, the review of filings, earning releases, et cetera. A major role that's evolved is risk oversight, and we have oversight of the independent auditor. Ethics and compliance taking on a greater role than it probably had years and years ago. Oversight of internal audit, a mission critical role. Interactions with the other committees of the board, as well as the management of the company. And some of the committees these days, there are overlaps and responsibilities, and so that's an important part of the job. And then any kind of external communications that we might do, which is typically in filings with the SEC or otherwise.

All of that, by the way, and we're here to talk about culture. And all of that plays a role in company culture, as you can well imagine. Just a simple thing like internal controls, well, culturally is the company weak or strong? So it's a mission critical role, is the assessment of company culture as it relates to these and many other things.

David Greenberg: Pat, how have you seen the role of the audit committee and the chair change over the time you've been doing that kind of job?

Pat Condon: As I said, it's become much broader in scope than it was originally, and it's also much more overt, in a sense, with things like organizational health. When we look at ethics and compliance, for one. We look at organizational health, workplace violence, employee relations. And you get down to things like what's happening as a result of changes in the workplace? Which there have been over the last two years, as we all know, very significant changes.

David Greenberg: You've mentioned culture and ethics a couple times. You and I were both participants in the recent Tapestry-LRN Summits on ethics and culture. Tell us how you think about corporate culture and how that informs what you do as a board member and audit chair?

Pat Condon: I think it's a critical role of every board member to do his or her assessment of company culture. Not only while you're a board member, but you think about going onto a board, I think an important part of your deliberations is what does the culture feel like? But to me, it's a very mission critical part of a company's existence. Things like the new workplaces they talk about at the future of work, for example, they are part of an evolving culture which I think we all have to pay pretty close attention to. And while that was changing some over time, I think the pandemic has accelerated the change. We can certainly see that in who's in the office when and who's doing what and how. Introduction of robotics and other things into the workplace, really changing... They call that the future of work, but it's pretty real and it's happening now.

David Greenberg: Would you say that from when you started as a board member until now, we've moved to a point where there are more discussions about culture, ethics, and the outside world, than when you began?

Pat Condon: I think we talked about it when I began. And again, I spent a lot of time in boardrooms back in my old profession as well, so I can include that. But the volume is much louder now than it was before. There are any number of reasons for that, but you can see it in society as well. And most companies, they do reflect society. To be successful, you better reflect society. And so as things are changing in the world in which we live, they're changing in the boardroom as well. Again, you come back to if you're going to be successful as a company, as a board, et cetera, et cetera, the culture plays such a mission critical role in that for the long term. You can be short term successful with what I'd call less desirable culture, but I don't think you'll last long.

David Greenberg: So one of the biggest parts of our audience for this podcast are chief ethics and compliance officers and their teams. As an audit chair, what's your advice to them on how best to build a strong relationship with the audit committee and its chair?

Pat Condon: Relate. So, I'm not a shy, retiring wallflower, nor or I think most of... So the key is to talk. And maybe it's me, but... And of course in my capacity, I need to avoid being management. On the other hand, healthy discussions with the officers, including the chief compliance officer, I'm pretty frequent in that. And again, I come back to this two dimensional world we're living in right now. It's much tougher to make some assessments, and therefore my conversations have probably picked up the pace a little bit because of the lack of face-to-face time that we could spend together. Whether it's over dinner or lunch or anything, those are times when you can get a good three dimensional judgment of character, culture, et cetera.

David Greenberg: When you think about the chief ethics and compliance officers you've worked with, how's the board view them? Do they have the status of other senior officers, or more importantly, do they have the status they need to be effective?

Pat Condon: I can't speak for the world, but I can tell you that my experience right now is yes, without question. The relationship to the C-suite... In fact, sitting in the C-suite is probably a good way to put it. And then the board is very, very, very, very interested in what they report out. And whether it's the results of employee health surveys or anything else, they all play a role in that. And so I would say that... Well, certainly every one of our board meetings, we get a report, and I will have looked at it closely beforehand, had a discussion about it.

David Greenberg: Do you have a relationship with the chief compliance officer in between board meetings and committee meetings?

Pat Condon: Probably not as much as the internal auditor, but yes, I am not afraid to pick up the phone, and I've certainly told her that if she has any reason whatsoever to call me, to pick up the phone. So it's a good relationship, and I think it needs to be. I mean, it needs be a crystal clear two-way street.

David Greenberg: Do you see, for example, good level of cooperation between say internal audit and ethics and compliance, or can you tell from where you sit?

Pat Condon: Yes, absolutely. I mean, I think it's, where necessary, there's parts where the roles overlap and become... Collaborative is the wrong way to put it, but each has a role to play. So at least in what I'm observing, yes, there's a relationship and it's a strong one, as well as with the other members of the C-suite.

David Greenberg: So, Pat here's what I think is one of the tougher questions for audit chairs and audit committee members. I sit on the audit committee at International Seaways, and the agendas are just crushing in terms of absolutely mandatory, legally required things that have to be done. So my question is can audit committees pay enough attention to corporate ethics, culture, and compliance? And if your experience with that says the answer is yes, talk a little bit about how you've accomplished that.

Pat Condon: Well, I try to leverage as best I can all of those things, so I'm pretty active when it comes to pre-meeting material interactions, but we don't have... The agendas are busy, and especially depending on the time of year. But there's a lot of prep that goes into the meeting on both sides, and optimizing the prep certainly helps, as well as making the reports tell the story they need to tell, but do it in a succinct way. And that frankly, is evolving. Whether you're dealing with ERM or compliance, the nature of the way the reporting is going is I would say evolutionary and probably always will be.

But the nature of, for example, corporate risk has become much more sophisticated. Part of it's technology, part of it's the work. So you know as well as I and pretty much any other director, how much more education we do these days than we did maybe before. But it's incumbent upon the director, in my view, to keep himself or herself current when it comes to rules, regulations, and the state of the art as it relates to all of those roles.

David Greenberg: You said that the reporting in this area and other areas is evolving. Are you feeling like it's becoming more strategic in nature and the board members are getting a deeper sense of what's going on, or not?

Pat Condon: I believe so. And again, I think the fact that we all... There aren't many shy, retiring wallflowers at the board level, and so where anybody feels... Sometimes the board, somebody will call me directly and ask about things. But I think everybody's invited to weigh in on the nature of the reporting that's done. And the questions, you can tell by the questions, that the interest level is high in this area.

David Greenberg: One of the series of letters that I hear from almost every board member I talk to is are the leters ESG? So how is your board dealing with ESG? Is it an audit committee matter, a full board matter, someplace else?

Pat Condon: E, all the above. And from things like... Just take an example: what's reported in the 10K. Typically, that would not have fallen anywhere in the... So sorting out who's going to review it. What, for example, the external auditor might do with some of that. Because the nature of a lot of that reporting is it's things that weren't there before, so all of a sudden it was how do we know that what's going in there is correct? Who's looking at it? So we know that's been parsed out and that it's being done.

But part of it is... I come back to what does your company believe its mandate is? So for utilities right now, all of that stuff is incredibly relevant. So whether it's how are we producing every kilowatt hour, whether it's interactions with the regulators, whether it's what's the nature of our workforce, what's the composition? How is it by level of the organization? I mean, we do look at every one of those things. And so I think that at least the companies with which I'm familiar, they had all... Before it became a public mandate, it was evolving in the boardroom anyway.

David Greenberg: So you and I have been involved in a bunch of conversations about corporate culture, and particularly how hard it is for boards to get a feel for it and how hard it is for companies to have good measurement and metrics. What's your view on how boards can play a role to focus management's attention on this so that when we talk about culture, we're not just guessing at it, but we have have some measures that can be tracked and management can influence them over time in the right direction?

Pat Condon: I think when it comes to the measures, we are at an evolutionary point, because they've been squishy at best historically. I do think that more and more companies are having independent reviews of their culture. Having said that, there's so many different aspects to it. Again, I come back to as a board member, I would take every opportunity I had to, whether it was a corporate lunch, a dinner, and thank goodness the companies with which I've been involved would invite folks who were not part of the C-suite.

And in addition to the social part of it, I would do my best to ask and gauge the responses about are we culturally directionally correct? Whether it's safety, employee relations, any number of things that embody culture, that was my way of assessing it. I don't think the metrics are... How would I put this? We have generally accepted accounting principles. I don't think there are any generally accepted ethics principles that you can say that you would... On the other hand, there are companies who do go in and make those cultural assessments.

So I think it's evolutionary. I think all you can do is make sure that... And you can listen to the management team and draw your own conclusions about whether culture's important in the C-suite. In my case, fortunately it is, and we do frequently have conversations about culture itself.

But you get into things like... And you know this as well as I. When you got a lot of contractors, you can set the ground rules, but they better be reflective of your culture, and you better be prepared to impose disciplines when things evolve in a way other than you would like them to. And most companies do use a lot of contractors, but they can influence culture if you're not careful. And if it's positive, it's great. If it's negative, that's something you really need to look for.

David Greenberg: So stepping back a bit and reflecting, how do you see the evolving expectations of stakeholders as it relates to major companies, and what's that mean for boards?

Pat Condon: The question is, the first thing is, who are your stakeholders? And I think that's also in an evolution, because corporations are more and more considered, I'll call them citizens, than they might have been before. And so I think the world of ESG, people who might not hold a share of the company still have a reaction, and they can influence you either in your stores or... On the other hand, if you're a necessity, whether if you're a power company or... The stakeholders, the customer side of it's mission critical. So I think the stakeholder evolution, if I can put it that way, is healthy for society, but it's imposing burdens we haven't experienced before. But having said that, I am watching mostly positive reactions to that.

Now, it doesn't mean that everybody who says something about your company is going to portray their perspective. They're not necessarily going to be factual in what they have to say. And so there are times when you're out there talking about, maybe indirectly, that message and what's incorrect about it, or just sometimes you got to be direct. How would I put this? Social media's probably created a lot of perspective that didn't exist before, because pretty much anybody can have an expert opinion now, and that's sad, but true.

David Greenberg: Yeah. Thinking about all that, what do you think boards need to change to keep up with these evolving expectations?

Pat Condon: I think you just got to have your ear to the ground at all times, as well as your hands, and make sure that you're in sync. I think you can look at other companies and what they're doing. Certainly, you need to be in communication with your stakeholders virtually continuously. And evolve as you need to, because just as human nature has evolved, so has the corporate nature, and it will continue to do so.

David Greenberg: Pat, have you seen on your boards pressure, expectation, for the CEOs to take a position on social issues and things going on in the outside world?

Pat Condon: I think my experience is maybe a fortunate one, but the answer to that is yes, and I believe it's as it should be. And it can be a real strength to a company where you've got a CEO who's not just aware, but is a believer, if I can put it that way.

David Greenberg: So, Pat, any closing thoughts you want to leave with our audience about directors, boards, audit committees, how to work with them?

Pat Condon: The world of cyber is not going to go away, and it's something we all need to be tuned into. And you see it every day on the news about invasions of your personal space, but the corporate side, it's no different. ESG, mission critical, and I think we just need look to excel in that area. I forget who it was, eternal vigilance is forever the price of freedom, but eternal vigilance is something that you just got to be tuned in.

I think the future of work, and we didn't talk about the intergenerational differences as it comes to that, but those are all things that are very, very relevant. And there's lots of things published on it. There's lots of things you can attend on it. But I do think it's something you need to tune into, because the pandemic and the change in the workplace environment, and I continue to add in the introduction, almost the virtual concurrent introduction of robotics in certain parts of the business are really going to change the future of work in a way that we need to stay close to.

David Greenberg: Well, I think that's a great place to wrap up for now. Pat, it's been really great having you on the podcast. We thank you and hope you'll come back again, because you certainly outlined a number of issues that are worth talking about.

Pat Condon: I'm happy to, and I have to say I enjoyed preparing for this with you, so look forward to doing it again.

David Greenberg: That's a wrap.

Outro: We hope you enjoyed this episode. The Principled Podcast is brought to you by LRN. At LRN, our mission is to inspire principled performance in global organizations by helping them foster winning ethical cultures, rooted and sustainable values. Please visit us at lrn.com to learn more. And if you enjoyed this episode, subscribe to our podcast on Apple Podcasts, Stitcher, Google Podcasts, or wherever you listen. And don't forget to leave us a review.

 

 

S6E15 | Yes, you can measure culture

Abstract:

In this episode of the Principled Podcast, we share a past conversation between Ethics & Compliance Advisor Arieana Thompson and her colleague Emily Miner, Senior Ethics & Compliance Advisor. The two talk about the Benchmark of Ethical Culture, a new study from LRN. In this global benchmark survey of 8,000+ employees at corporations around the world, LRN examines the underpinnings of corporate culture and its influence on employee  perceptions and performance. Listen in as Arieana and Emily explore how ethical culture doesn’t just protect business assets and reputation; but also propels the bottom line.

You can get a copy of the LRN Benchmark of Ethical Culture here.

 

Featured guest:

Emily Miner is a Senior Advisor in LRN’s Ethics & Compliance Advisory practice. She counsels executive leadership teams on how to actively shape and manage their ethical culture through deep quantitative and qualitative understanding and engagement. A skilled facilitator, Emily emphasizes co-creative, bottom-up, and data-driven approaches to foster ethical behavior and inform program strategy. Emily has led engagements with organizations in the healthcare, technology, manufacturing, energy, professional services, and education industries. Emily co-leads LRN’s ongoing flagship research on E&C program effectiveness and is a thought leader in the areas of organizational culture, leadership, and E&C program impact. Prior to joining LRN, Emily applied her behavioral science expertise in the environmental sustainability sector, working with non-profits and several New England municipalities; facilitated earth science research in academia; and contributed to drafting and advancing international climate policy goals. Emily has a Master of Public Administration in Environmental Science and Policy from Columbia University and graduated summa cum laude from the University of Florida with a degree in Anthropology.

 

Featured Host: 

Dr. Arieana Thompson believes in transforming the modern-day workplace through thought-provoking, evidence-based insights.

Arieana is a subject matter expert in executive leadership, succession management, ethics and compliance (E&C), wellness cultures, and employee development. Arieana has experience advising in external and internal capacities and professional speaking. Arieana offers professional and wellness coaching, helping leaders and individuals to harness natural strengths and reduce stress.

As a scientist-practitioner, Arieana actively researches and publishes employee well-being, organizational culture, and leadership thought-pieces in both industry and peer-reviewed academic journals (see links in the "Featured" section below). These publications enable executives to create and sustain values-led, profitable, and creative companies.

S6E14 | The key to good governance? Empathy.

Abstract:

“You don’t want to wait until you already know that there is a culture problem to really understand the culture of your organization. You should constantly be a student of the culture of your company, because we all know nothing can destroy an organization faster than a toxic culture.”

- Dottie Schindlinger

Culture is top-of-mind in the boardroom. How do you manage it and measure it? What does it look like to act decisively on culture, and what ethical implications come from those decisions? In this episode of the Principled Podcast, host David Greenberg talks about the critical role of boards in shaping ethical corporate culture with Dottie Schindlinger, Executive Director of the Diligent Institute and co-host of The Corporate Director Podcast for Diligent Corporation. Listen in as the two dig into the relationship between boards and ethics and compliance teams and discuss how that can inspire good governance. The key to success? Empathy.

 

What you'll learn on this episode:

[1:52] What was on the minds of those at Diligent Institute during their recent corporate culture roundtable?

[5:32] Boards’ and Directors’ struggles to measure culture and progress.

[8:25] Underlying driving factors of conduct.

[14:13] - Discussion of cancel culture and reputation preservation.

[17:38] - The importance of identifying your company’s purpose. 

[19:52] - The key ethics issues challenging boards right now.

[24:28] - The looming threat of cyber crime.

[27:46] - The shifting relationship between boards and ethics and compliance teams.

 

Additional Resources:

Report: LRN Benchmark of Ethical Culture

 

Featured guest:

Dottie Schindlinger is Executive Director of Diligent Institute, the global corporate governance research arm of Diligent - the largest SaaS software company in the Governance, Risk and Compliance (GRC) space.  She co-authored the book, “Governance in the Digital Age: A Guide for the Modern Corporate Board Director,” and co-hosts, “The Corporate Director Podcast.” Dottie was a founding team member of the tech start-up BoardEffect, acquired by Diligent in 2016. She is the Board Vice Chair of Alice Paul Institute and is a Fellow of the Salzburg Global Seminar.  She graduated from the University of Pennsylvania, and lives in suburban Philadelphia.

Dottie Schindlinger is Executive Director of Diligent Institute, the global governance research arm of Diligent Corporation. She co-authored the book, Governance in the Digital Age: A Guide for the Modern Corporate Board Director and co-hosts The Corporate Director Podcast. She helped launch and grow the start-up BoardEffect, acquired by Diligent in 2016. Dottie is Vice Chair of the Alice Paul Institute and is a Fellow of the Salzburg Global Seminar, and she is a graduate of the University of Pennsylvania.

 

Featured Host: 

David Greenberg serves as Chair of the Governance and Risk Assessment Committee and a member of the Audit Committee of International Seaways (NYSE: INSW), one of the largest global crude oil and petroleum tanker companies.  Mr. Greenberg’s previous board experience (2006 to 2016) was as the independent director – and member of both the Audit and Compensation Committees --of APCO Worldwide, a private communications and government affairs consultancy and as a director (2013 to 2016) of Clean Tech Group, which creates opportunities for industrial companies to invest in innovative, clean technology.  He also served for 5 years as Chairman of the Board of Trustees of The Keystone Center, a Colorado non-profit that brings together oil, chemical and pharmaceutical companies with leading NGOs to find solutions to complex public policy challenges at the federal and state levels.

Greenberg is currently Managing Director of Cortina Partners LLC, a private equity firm that owns companies in the air medical, addiction treatment, bedding, textile and outdoor recreation industries and is CEO of Acqua Recovery, a residential drug and alcohol addiction center.  He also advises boards and executive teams on strategy, compliance, leadership and culture as a Special Advisor for LRN Corporation, and from 2008 through the end of 2016 was a member of LRN’s Executive Committee. For 20 years prior to 2008, Mr. Greenberg served in various senior positions overseeing government affairs, corporate affairs, communications and strategy at Altria Group, Inc. – then the parent company of Philip Morris USA, Philip Morris International, Kraft Foods and Miller Brewing – culminating in his role as Senior Vice President, Chief Compliance Officer and a member of the Executive Committee.  As one of five senior vice presidents of the corporation, he served on the Management Committee, which oversaw all strategy and company operations.  He was also a principal architect of the company’s very successful efforts to end the ‘tobacco wars’ which threatened the company’s very existence.  Earlier in his career, Mr. Greenberg was a partner in the Washington D.C. law firm of Arnold & Porter and also served as Legislative Director and General Counsel of the Consumer Federation of America.  He attended Williams College and has JD/MBA degrees from the University of Chicago. 

Greenberg has testified before the U.S. Congress, the European Union, the Israeli Knesset and other governmental bodies over two dozen times and has appeared on ABC Nightline, the CBS Morning News, BBC Morning, and the PBS News Hour, and has spoken at leading events for CEOs and boards.

 

Transcript:

Intro: Welcome to the Principled podcast brought to you by LRN. The Principled podcast brings together the collective wisdom on ethics, business and compliance, transformative stories of leadership and inspiring workplace culture. Listen in to discover valuable strategies from our community of business leaders and workplace change makers.

David Greenberg: Culture is top of mind in the boardroom. How do you manage it and measure it? What's it look like for boards to act decisively on culture? And what are the implications of those decisions? Hello and welcome to another episode of the Principled podcast. I'm your host, David Greenberg, LRN's former CEO and now special advisor. I'm also on the board and chair the governance committee of International Seaways. Today, I'm joined by Dottie Schindlinger, executive director of the Diligent Institute and co-host of Diligent's podcast, The Corporate Director. We're going to be talking today about the critical role of boards in shaping ethical culture. We'll be touching on the relationship between boards and ethics and compliance teams and how that can promote good governance. Dottie is a real expert in this space. She brings over 20 years experience in governance related roles, including serving as a director, officer, committee chair, senior executive, governance consultant and trainer for public, private and nonprofit boards. Dottie, thanks so much for coming on the Principled podcast.

Dottie Schindlinger: It's my pleasure, David. It's great to be with you.

David Greenberg: Dottie, Diligent sponsored a recent round table for directors on corporate culture. What was on their minds?

Dottie Schindlinger: Well, thanks for asking, David. Listen, culture has been a top issue on the minds of corporate directors for a few years now but really very much so in the past two years during this pandemic. It's been really fascinating in our conversations with directors all throughout this period of time, the word that keeps coming up over and over again is empathy. That empathy has now become a key skillset for directors and senior executives of organizations to really make good decisions. And I think corporate culture in particular has been a little bit in the crosshairs because of all the rapid change and the seismic type of change that organizations are going through.

Think about back in March of 2020, when basically every company that could had to move to 100% remote operations with no advanced warning and with no planning and think of the impact that it had on corporate culture. When what seemed to be a two week hiatus from the office turned into, in some cases, an 18 month long hiatus from being together in the office. I think the directors are really watching corporate culture very closely. And then of course you have other pressures taking place, everything from ESG, what's happening in terms of our workforces, the huge talent crunch that we are under right now that the competition for talent at an all time high. Culture is definitely on the minds of corporate directors and we spent a lot of time talking about that in this round table.

David Greenberg: Speaking of all the time out of the office, what are the directors saying about there are companies and boards being back in the office?

Dottie Schindlinger: Well, it's very uneven. For some organizations they've been fully back in the offices for a long time. And by the way, I feel like it's really fair to point out that even during the pandemic, something on the order of 62% of jobs in the US cannot be performed remotely. And so I feel like we have to just call that out for a moment and acknowledge that being a remote worker was really kind of the reality for a privileged few in the workforce and not the many. But having said that, it's still very uneven the experience. We're seeing a lot of interest on the part of workforces when they can perform jobs remotely to continue doing so. And then we're seeing also a lot of desire from people together that they miss each other, that they miss the kind of give and take that happens when you get together physically in a space and you have the opportunity to run into somebody you haven't seen in a long time. Someone who's maybe not on your team but an adjacent team and just have those impromptu water cooler conversations that I think we all treasure.

It's a very mixed experience. For some people it's better to stay remote, especially if, for example, you're the parent of young children and childcare continues to be an issue. You may want to have the flexibility that being a remote worker brings to your schedule. It's definitely not a universal and because it's not universal and because this all full disease of COVID just keeps rearing its ugly head and we have new variants happening, it's hard to plan. If you're in any position of leadership and you're having to plan, when should we go back to the office? And what should be the protocol to keep the workforce safe? These questions don't have simple answers and the answers themselves continue to evolve as the disease evolves. It definitely is requiring everyone to be a little bit creative and to stay on their toes.

David Greenberg: Got it. Going back to the discussions on culture, did measurement come up? How are boards and directors struggling with trying to measure culture and make real metrics on culture so that progress can be measured?

Dottie Schindlinger: Yeah, it's a hard thing to measure, isn't it, David? Trying to measure cultures a little bit like saying we're going to measure love. How do you actually approach that? But we also know that when there is a toxic work culture, it is palpable. People recognize when there's a toxic work culture, you can almost see it in the faces of the people on the team. There are some measurements that are quite helpful. I don't know if you're familiar with a project that was put together by a group called Glassdoor in combination with the MIT Sloan School, something called the Culture 500. And what they basically did was use some AI tools to investigate hundreds of thousands of submissions from Glassdoor reviews of employees to look for patterns. And then they measured companies on the S&P 500 on nine different variables trying to determine the health of culture. And kind of work, I think is really very interesting. If you haven't checked it out, I'd recommend that you look at the Culture 500 and just take a look at that website and see how they approached that.

It's that kind of measurement that I think is going to make the difference. When you can really see big data sets and look with AI fueled tools for patterns and try to uncover what can we really learn from all these reviews? You're not looking at individual reviews and reacting to individual reviews but you're looking for commonalities and themes and patterns across thousands of entries. That then does give you a fairly accurate picture of what's happening with culture within a company. I think if you're a director these days, you should be paying attention to these kinds of tools. These are the kinds of things that are going to make it easier for you to provide that kind of oversight on culture, especially because that is so hard to do.

I can say this from personal experience, I'm on the board of a small nonprofit organization that recently had some challenges around culture. And we've been meeting remotely for a year and a half because of COVID. We haven't been physically on site at the nonprofit organization and frankly, we didn't really have a good sense for what was happening there day to day. And so it took having some conversations with the staff to try to understand what is actually happening here? And it's just really hard to get the tools that you need to have that visibility if you're not boots on the ground every day. And frankly, that's just not the reality for board members, even outside of the pandemic. We're not boots on the ground every day at the organizations that we oversee. Having these kinds of tools that give us better insight, I think are going to be increasingly important as we start to think about how to measure culture.

David Greenberg: The other thing I've seen some boards turning their attention to is kind of trying to capture some of the underlying drivers of conduct, both good and bad. Things like trust, fear, belief that management acts on its values. And if boards can get underneath the surface like that, you were talking about empathy. I think those are the kinds of things that we're going to have to be able to measure and assess because otherwise we're just asking people in engagement surveys how they're doing, whether they go out to lunch with their boss, whether they can bring their dog to work and that's not really what's driving behavior.

Dottie Schindlinger: It's really true. And David, one of the recommendations that came out of this round table that I think gets at that question of trust is look, I think boards are very used to evaluating the performance of their C-suite executives and especially of the CEO and really understanding, do we have a feeling of trust with this individual and with this team? Do we have trust in their capability as leaders? But it can be incredibly powerful for the board to get some reports from skip level employees. Not the C-suite and not even their direct reports but one level down and really kind of getting a sense from that layer of the organization, how do they think the C-suite is doing in terms of whether they can be trusted to lead the organization in the right direction? That kind of an approach, sort of that 360 degree evaluation can be so helpful to understanding the culture of the organization, especially if that kind of information is coming anonymously and is done regularly.

You don't want to wait until you already know that there's a culture problem to understand the culture of your organization. You should constantly be a student of the culture of your organization because let's face it, we know nothing can destroy a company faster than a toxic culture. Truly. We just see every example of that ripped from the headlines. We know that to be true. And so if you're maybe once a quarter, two times a year doing a big 360 degree pulse check of the whole company to understand the culture, really asking people culture specific questions, that's going to give you, I think, a very good sense for how things are going within the company and just it's not necessarily the only data point that you'll use but it does give you a very different view than what you're hearing just in conversation with the C-suite executives.

David Greenberg: Yeah. You mentioned toxic cultures. Do you have any recent examples in your experience of a board acting decisively on corporate culture where there was a problem like that?

Dottie Schindlinger: Well, there's many as you know but I'll share just one. And I feel comfortable sharing this one because it has been very widely publicized and we've also featured the executive vice president and general counsel a couple times at events that we've held at Diligent. And that's the story of Wynn Resorts. I think everybody remembers a few years ago that there was a very well publicized #MeToo campaign around Steve Wynn, who was the founder, chairman and CEO at the time and he was found to be guilty of sexual misconduct and he was ousted from the company. What may not be as widely known is as part of that process, about half of the board was also ousted from the company because as they began to do their investigation, what they learned was that it wasn't just a matter of there being one bad apple but it was truly endemic in the culture.

There was a culture of intimidation and harassment almost at every level of the organization. It absolutely was the tone at the top playing out through the entire organization. And so they felt that they really needed to kind of start fresh and they brought in many more women onto the board. They brought in much more diversity onto the board and that was true throughout the leadership of the company as well. And they began to really work from the frontline employees all the way up to the top of the organization to really get to know what that culture had been like and what would be the things that they really needed to work on and correct. And one of the things I think is quite remarkable is that when we think now about what was happening during the pandemic, so all of this happened at Wynn a few years ago but then came the pandemic.

And at the beginning of the pandemic, Las Vegas was shut down completely and as you can imagine for a company like Wynn Resorts, this was an existential crisis. If they couldn't operate their business at all, it might have very quickly spelled the end but because they'd been doing all this hard work around culture, they knew that one of the most important things that they could do would be to retain their workforce for as long as humanly possible. And so they made cuts every possible little place they could without cutting staff. And they actually did not furlough staff, I think, longer than any other resort or casino in the Las Vegas area. And that's really saying something.

Now, eventually they did have to make some adjustments as the pandemic continued month after month. But I think they've now hired back basically everyone that they furloughed. They really just focused so much on retaining their workforce, protecting their workforce and really making sure the workforce knew how valued and how trusted they were. And I think that speaks to the hard work that they did around culture. I don't know that that would've been their priority in years past but they knew moving forward, this had to be priority number one for them and it really showed in the choices that they made.

David Greenberg: Very interesting. And I'm speaking to you from one of the Wynn hotels right now, where I'm having some strategy meetings. The service is great, the place looks great so they seem to have weathered the storm.

Dottie Schindlinger: That's great to hear.

David Greenberg: How are you experiencing and talking to boards, their dealing with all of the issues related to reputational risk and cancel culture?

Dottie Schindlinger: Yeah, it's a great question. And I think we hear about cancel culture and the concerns there. I think it certainly is a bigger concern for certain industries, rather others. If you are a consumer products company, obviously this is a huge concern for you. It's something that can absolutely spell the difference between success or failure and really on either side. You can have a social campaign go extremely well as in the case of Nike a few years ago, in terms of their support of Colin Kaepernick, that that actually ended up paying huge dividends for the company and really put them in a strong position. And it can go exceptionally poorly. I think of an example like United Airlines when the video of them dragging a passenger off the plane went viral. And quite frankly, even than three years after that incident, their stock price really was continuing to underperform their peers. You can really see how these things can light a fire and go very, very broadly.

We do this report every month at Diligent Institute called the Director Confidence Index. And back in February, we were curious to know, how did directors feel about reputational risk? And in particular, we wanted to know, how did they feel about the fact that CEOs were becoming much more public faces of companies and taking to the podium to speak on issues that are kind of unrelated to corporate performance but are related more to social issues. Things that they felt might be of concern to their key stakeholders.

And what we thought was pretty fascinating was that 54% of the directors we asked said that their CEO had made a public statement to address a social or political event occurring in 2020. And that was more than double the rate that we found four years ago. It is absolutely true that there is more happening around reputation management and reputation generation for corporate leaders. But only 16% of the directors that we surveyed said that they encouraged their CEO to speak publicly on any issue he or she deems appropriate. 42% say they would encourage the CEO to speak out but only to the extent that the issue relates directly to the company's mission or values. And about 32% said CEOs should always stay silent on social issues. It's clear that there's not a lot of consensus among directors about the best way to do this.

What I would say is I think a lot of directors that we speak with are telling us, "Look, it doesn't matter whether you like it or not, you may have to enter the fray because to be silent can sometimes do more damage than to say something. And so you do have to really think about how are you guarding your reputation? What are you aligning your reputation too? And I think probably the best true north is how does this relate to your company's values? What are the things that you are trying to put out to market as your core values? And how does this relate to what you value? I think that's really the best way to approach when to speak out, how to speak out and who should speak out.

David Greenberg: I think it also helps when companies have a clear sense of purpose, why they're on this planet and what their relationship is with society. If they can define that and understand that, then it may help them understand the issues where really there's very little choice and a lot of need to actually speak out because it connects to who they are and why they're here.

Dottie Schindlinger: Well David, I completely agree. And I would say in that same survey, 57% of directors told us they're more concerned about reputational risk today than they have been in any prior year. And I think that is because there has been this pressure being placed on companies by institutional investors, by the business round table, by just societal opinion.

Again, going back to the fact that we're in this talent war, you've got to attract and retain top talent. And the way to do of that is to make sure that you have a clearly stated company purpose, that that purpose of your company is tied to something broader than generating positive returns for shareholders and that it's something that your workforce, your customer base, your partners can all buy into and sort of see a role for themselves in. And I think that's just a much taller order than we've had in years past. I think that the job of a director is getting precipitously harder but if you can have that stated company purpose, it can make other things easier to say no to and make it a little clearer what you have to say yes to.

David Greenberg: And one of the things that I've taken to the boardroom from my experience as a senior executive at what at the time was a Fortune 10 company, is that the truth is making a return for shareholders and all of the compensation bells and whistles that comp committees have ever created, you add all that up and it wasn't enough to get a lot of us up in the morning. If there wasn't a greater purpose to what we were doing the company was really missing something in terms of getting discretionary effort even out of its most senior leaders.

Dottie Schindlinger: Yeah. I think that's very true. That connects to sort of what makes us human, doesn't it? That we're all, we're purposeful beings, human beings and we want to know that we're connecting to some broader purpose. It's not just we're doing it for the sake of doing it. And I think that's true for board members too. I think board members feel far more motivated to maybe go on a limb and tap into their personal networks and express empathy and have compassion for things that they feel they connect to. I think everybody wants to feel they belong.

David Greenberg: For sure. When we drill down a little bit, what are some of the key ethics issues you see challenging boards?

Dottie Schindlinger: Well, first of all, just the number of ethics issues challenging boards has exploded. There's many more things that board members have to keep their eyes on these days. I would say some of the big ones, issues around the pandemic dealing with sort of public health issues, making sure that local regulations and workplace safety are being managed correctly. Again, those are not easy issues, but they need to be thought through.

Diversity equity and inclusion is a big one. I think there's been so much energy being put into this area ever since the murder of George Floyd and the many corporate commitments that were made to try to change the nature of systemic racism and really address historic inequity. And these things require ongoing attention. This is not something that gets fixed in a couple of months. We're talking about a system that goes back 500 years, so it's going to take some time to get this right but it needs for us not to take our foot off the gas, to really kind of keep going. Also issues related to sexual harassment, those continue to be things that we see plague companies and just continue to need to be addressed.

Those are things I would say are really top of mind over the past couple of years but I would also add there, there's sort of a huge ethical dimension to climate change. Right now we're just finishing up the COP 26 conference that's happening in Glasgow. And there's a lot of concern out there that we're not going to be able to meet the climate commitment that we need to meet to keep the ocean temperature level down to 1.5 degrees Celsius above where it was. And I think that has huge, huge implications for every company. Everything from global supply chain, to workforce, to our ability to just conduct business in this new unknown future with bigger, more horrifying storms.

And there's some ethical dimensions there. If we're not making choices that are in the best interest of the planet, not only can they be really harmful to our business and our balance sheets, but they're harmful to our own ability to exist. I would call that a bit of an ethical conundrum and that is a huge issue that I think boards are going to have to get better at addressing, frankly, just better at being able to have those conversations at a strategic level in boardrooms. It really does connect to the ability for the business to exist and thrive. We have to just get better at making sure we're talking about these things all the time.

David Greenberg: You've just made a pretty good case that the issues that boards confront and discuss are changing. Do you see a related change in the profile of public company board members?

Dottie Schindlinger: We've started to see that. We did a report in July called Beyond the C-suite and it was looking at the changing trends of the profile of new director hires of public companies. And what we saw is that while the vast majority of new hires of directors are still current and former CEOs, CFOs and COOs, there is year over year, a growing number of new director hires that are coming into the boardroom with different skillsets. We're talking about people that come into the boardroom with technology backgrounds, legal backgrounds, ESG, HR, sales and marketing. Just kind of nontraditional profiles for board member hires. And this is not an accident. We are seeing this wide array of areas of risk that boards are now being asked to tackle and really have no choice but to tackle. Things like cyber risk, for example.

10 years ago, I think you'd be hard pressed to find a board meeting that spent a very much time talking about cyber risk outside of a very small number of companies. Now, I think you'd be hard pressed to find a board meeting that doesn't touch on cyber risk probably at least a little bit of every board meeting at most companies. And so we're seeing this big shift in the kinds of things that directors have to deal with. And as a result, you need different talent. You need people that come from different areas of expertise and bring fresh perspective into the boardroom conversation.

David Greenberg: Yeah. I can tell you that cyber risk comes up on the board at International Seaways very regularly and every time it does, it scares me to death because it's very hard to deal with. It's very hard to know and you have very good people inside and outside the company who can help but it's really fast moving and it's just one of those things that keeps you up at night.

Dottie Schindlinger: And I hate to say it but probably should. Probably should keep you up at night. The terrifying numbers that I hear, I believe that now cyber crime as an industry, if you look at it as an industry, has top $6 trillion a year, which Larry Clinton who's the president of the Internet Security Alliance always has this great line, which is, "If cyber crime was a country, it would be big enough to qualify for entrance into the G7." Thinking about any individual company trying to tackle such a behemoth is kind of outrageous.

I think what we need to think about is how are all of us as companies, as governments, as citizens banding together to fight this insane criminal enterprise. It's the largest criminal enterprise on earth. It's I think at this point, something like double the size of the illicit drug trade. It's massive. We all have to play our role in fighting this and none of us are going to be successful alone but of us can take our eye off the ball. We all have to pay attention. We all have to be a little bit paranoid all the time for bad things not to happen.

David Greenberg: Yeah. One of the things that worries me, you've referenced the war for talent a few times and I wonder if the good side is winning the war for talent in the cyber area?

Dottie Schindlinger: Not even close. Not even close, David. Right now, the estimated number of unfilled cybersecurity professional jobs globally is three million. And there's just not even a pipeline to fill that many roles. Unfortunately this is a definite area of concern. I would say any of you listening to this podcast, if you have a young person in your life who's trying to figure out what career to go into, suggest they go into cybersecurity, we need them in the fight.

David Greenberg: One of the things I've seen in terms of the changing profile of directors is that I would say three years ago, you would have been hard pressed to find even one or two members of public company boards who had spent a major part of their time as working chief ethics and compliance officers and now I've identified about a dozen. There's a little boomlet in that area that I hope will continue.

Dottie Schindlinger: That's a tiny little boomlet.

David Greenberg: I know, I know. Well, you got to start somewhere.

Dottie Schindlinger: You got to start somewhere. I would agree with you. I think that's a positive trend. I'd love for it to actually be large enough to be a trend but it's positive to see that we definitely saw that there are more individuals with legal expertise being welcomed on to boards. And hopefully that means that they come in the door with some deeper understanding of ethics and compliance issues maybe than others. And I think we definitely could see more of that because as we've been speaking through this whole podcast, the ethical and moral dimensions of business, I think are getting far more complex. And so you need people who sort of understand ethics and compliance in a real way to be able to help guide strategic decisions that have ethical and compliance dimensions to them, which I think is all of them. I think we could all do with an ethics and compliance expert on our boards.

David Greenberg: Here, here. A lot of this audience listening to this podcast today, come from the ethics and compliance community so I wanted to be sure to ask how you see the relationship between boards and the ethics and compliance teams out there and whether it's changing and how it may need to change more.

Dottie Schindlinger: Great question. I do think it is changing and I would be disingenuous if I said it was changing everywhere at the same pace. That's not true. It's fits and starts. But I do think that there's a greater recognition on the part of many companies that the ethics and compliance team is not the team to call in when things have already gone wrong but that in actual fact, they can be very strong strategic partners in future decision making. You can bring in the ethics and compliance team to help you think through investments that you're planning to make. You can bring them in to help you think through ways that you could potentially be greening your business to potentially add to the bottom line. You can bring them in to talk through workforce issues and the fight for talent, and retaining and attracting of top talent. What are some ways to think about that from sort of the ethical dimension?

Frankly, I think it behooves you to use that team in a strategic way to just help make better, more nuanced decisions and play out in advance what are the ethical dimensions of this decision that we're going to make? Again, business now moves at the speed of a tweet. Never forget that every decision you make is going to be scrutinized and it's going to be scrutinized in the marketplace of Twitter. And so if that's going to be the case, it probably makes sense for you to check in with the ethics and compliance team about what might be some things we should be prepared for as we make this decision? And I don't know that that's been the traditional way that those teams have been leveraged. I think more so they've been brought in after the fact to help fix something that's gone wrong or they've been brought in when there's some check the box exercise around training that needs to happen. And I just think that's an under utilization of a really great resource in your company.

David Greenberg: Dottie, that is a fantastic place to end today because we're just about out of time. It has been an enormous pleasure to talk with you about the evolution of boards in shaping culture, ethics and compliance and the role of boards in what is an ever changing world. Thank you for joining me on this episode and I hope we can continue our conversations.

Dottie Schindlinger: Thank you so much, David. It's been such a pleasure.

David Greenberg: And thank everyone out there for listening. I'm David Greenberg and we'll see you next time on the Principled podcast by LRN.

Outro: We hope you enjoyed this episode. The Principled podcast is brought to you by LRN. At LRN, our mission is to inspire principled performance in global organizations by helping them foster winning ethical cultures rooted in sustainable values. Please visit us at lrn.com to learn more. And if you enjoyed this episode, subscribe to our podcast on Apple Podcasts, Stitcher, Google Podcasts or wherever you listen and don't forget to leave us a review.

S6E13 | Edelman’s 2021 Trust Barometer: The past, present, and future of truth and trust within institutions

Abstract:

“ 7-10 people fear the weaponization of misinformation, but what's changed in the last year or so is assumptions of who we think the weaponizers of fake news and misinformation largely are.”

- Dr. David M. Bersoff

Trust has been a leading concern throughout institutions, globally. So what are the overarching trends around trust? What actions can institutions take to gain back trust? How can you build and regain trust once it’s been lost? In this week’s episode of the Principled Podcast, we’re sharing a past conversation we had with Dr. David M. Bersoff, Head of Global Thought Leadership Research at Edelman Data and Intelligence. David takes us through the findings from Edelman’s Trust Barometer, an annual trust and credibility survey that looks at what it means for organizations to build trust with people. This topic aligns closely with LRN’s recent Benchmark of Ethical Culture report, which measures trust and other dimensions of ethical culture. The report is available to explore. Check it out here.

 

What you'll learn on this episode:

[1:07]   Why is a business found to be the most trusted institution globally?

[3:51]   What are some overarching trends on trust founded in the 2021 Trust Barometer Report?

[14:59] How has COVID affected people’s trust in societal institutions?

[18:00] What can be done to reduce the trust chasm? What are some ways to get people together again on basic facts?

[22:03] What are the differences between trusts between a country and region?

 

Additional Resources:

Report: LRN Benchmark of Ethical Culture

Article: Yes, you can measure ethical culture

 

Featured guest:

Dr. David M. Bersoff, Ph.D. oversees Edelman’s global Thought Leadership research including the annual Trust Barometer and Brand Trust studies. In this capacity, he is responsible for questionnaire development, leading all data analysis and insight gleaning activities, and developing new frameworks for understanding trust, credibility, and consumer-brand relationships.

Prior to joining Edelman Intelligence, David spent 18 years as consumer insights and marketing strategy consultant at The Futures Company. In his last 5 years with the organization, he served as its Chief Insights Officer and was a member of its global board of directors.

Prior to entering the consulting world, David spent 12 years engaged in social science research at various Ivy League institutions, including 4 years as an assistant professor of social psychology and research methodology at the University of Pennsylvania.

 

Transcript:

Intro: Welcome to the Principled Podcast brought to you by LRN. The Principled Podcast brings together the collective wisdom on ethics, business and compliance, transformative stories of leadership and inspiring workplace culture. Listen in to discover valuable strategies from our community of business leaders and workplace change makers.

Host: Hello everyone. And welcome to another episode of LRNs Principled Podcast. My name is Ben DiPietro. I'm the editor of LRNs E&C Pulse Newsletter. You can find that on our website lrn.com. Click the resources tab and click newsletter, please subscribe, we'd love to have you. With me today is Dr. David M. Bersoff. He's the Head of Global Thought Leadership Research at Edelman Data and Intelligence, and you would know them better as the people who put out the trust barometer for the last 20 years, and they have a new, a very interesting one out in 2021. And so we welcome David. And how are you, David? Thanks for taking time with us today.

Dr. David M. Bersoff: Pleasure to be here. Thank you for having me.

Host: In 2021 Edelman found business to be the most trusted institution globally. Why is that? And have the other institutions faltered leaving business standing alone, or has business simply outpaced media, NGOs, and government and building trust among people?

Dr. David M. Bersoff: All four institutions that you just mentioned actually are more trusted now than they were when we first started tracking trust among the general population back in 2012, but two things have conspired to put business in the number one position. The first is that it's actually experienced some good double digit growth in trust over the past 10 years or so, unlike media and NGOs, which have gone up but gone up relatively little and while the government has also gone up, which is surprising to some, started from the much lower position. So at the end of the day here, we find business is number one, and you can really understand what that looks like and why that is when you divide trust into its two constituent parts. So there is perceptions of ability or competence and there's perceptions of ethics or fairness. And what we see is that despite the fact that as I said, all the institutions have enjoyed some trust gains since 2012, government and media are generally seen as not terribly competent and not terribly ethical. NGOs are seen as ethical, but not terribly competent.

Business is the only institution that's really seen as both. And that's actually a bit of a change from last year. Last year business was seen as competent, but not terribly ethical, this year they're the only institution that's really seen as both. And so it's not as if the other institutions have fallen away, it's more that business has really come through more than the other institutions, particularly I think in the context of the pandemic. And if you look at the institutions across the last 10 years, you could see government has in many places, ground to a halt due to excessive partisanship, media has in many ways, turned into assess pool of ideological warfare. NGOs just haven't been seen as stepping up in these times of crisis. And so in many ways, business has been the most reliable agent of positive change in this country. And I think that's why it's rewarded with this trusted status.

Host: You mentioned you've been tracking a lot of this since 2012. What have been the three biggest overarching trends report has found since then? And any thoughts on what you see coming ahead in the next three to five years that might bring with us and how will AI impact this whole notion of truth and trust?

Dr. David M. Bersoff: Yeah, let me pull that apart a little bit. Actually I want to cheat a little and call out four trends rather than three. Let me start with number one, the worsening trust gap between the more affluent top 15% of the population and everybody else. So the gap, the trust gap, in institutions between the more affluent and everybody else was 16 points this year, which is tied for the record. But what's even more telling is that back in 2012, there's 22 countries that we can track all the way back to 2012, back in 2012, only seven out of 22 countries had a double digit trust gap between the top 50% of the population and everybody else. In 2021, 21 out of our 22 countries had that double digit trust gap. And I think part of the reason why we're seeing that trust gap broadening across more markets is because of what's known as that case shape recovery.

So we're in the middle of this pandemic and what we're finding is that certain people are recovering more quickly than others. Some people at least, from a financial point of view are almost whole, if not even a little better off than they were while other parts of the population are stagnating or even doing worse than they were a year ago. And part of the problem or the issue of why this is important is that if you have two segments of the population and there are different trajectories, so one is looking towards a future that looks good. The other is looking towards the future that doesn't look so good, suddenly you have two big constituents in the population that are not equally invested either in change or in protecting the status quo. And that's destabilizing when you have a society that can't decide whether it needs to change this dichotomy, the sense in which I have more of a investment in keeping things the way they are, and you have more of an investment in changing. That's the wedge that pop opens the door on populism.

That's why we're seeing populism cropping up in countries around the world, because there is this disconnect where some people are differentially benefiting from what's happening from the status quo. Others are seeing themselves left out, left behind and are anxious for change. That's the first one. The second one is the change in flow of influence and information from a top down dynamic to a more horizontal pattern. So these days, and this wasn't always true, you're more likely to be convinced of something by your peers or by people you know than by experts and authority figures. And this, in my opinion, has actually been a debt negative for trust and stability and has hastened trend number three, which is one of the big themes this year in our study, which is the breakdown of the information ecosystem.

So we're in the midst of an infodemic, which has become so extreme. We describe the world as being in a state of information bankruptcy, basically our information ecosystem, it's structurally unsound, it's built on a flawed business model and it's unable to meet its obligations. Now, this idea that the information ecosystem has been compromised by bad actors isn't really new. We've had a question in the survey for several years now about, do you worry about fake news and false information being used as a weapon? And globally, we find that about seven to 10 people do fear the weaponization of misinformation, but what's changed in the last year or so is assumptions or who we think the weaponizers of fake news and misinformation largely are. I think two, three, four years ago, people were thinking about Eastern European troll farms or cyber terrorists or Asian bot shops.

And what's been made apparent by the pandemic, the fear around local issues such as the election in the US is that these days misinformation is largely a home grown phenomenon. And as a reflection of this, and this is one of these data points that really just have me shaking my head. More people today are worried that their own government leaders are purposely misleading them than they are, that other countries are contaminating our media with false news. So this whole questioning of the media inputs, of the information ecosystem, trust in media, trust in information and data, this is huge. And it's really come perse forth this year as a major problem. And then the fourth trend that I'll mention is this anointing of business. So we've been talking for years, that business needs to become engaged in social issues, they need to be citizens of society, they need to look beyond their bottom line. That's been talked about under the context of things like purpose or CSR, but what we're really seeing is the evolution of that into something much more extreme.

And what we're seeing this year and last year a little bit, is that people have placed business on a pedestal and conferred upon it the responsibility for our future, as well as all the hopes and expectations that responsibility entails. This is way more than being a business that does good, this is business being called upon in many ways to be our savior, to bail us out. As the only adult left in the room, we're looking to business to fill leadership void left by media and NGOs and government. And the fact remains that business just isn't designed for that and CEOs aren't trained for that task. So while opting out of being the people's hero is not really an option, success is also not a shirt. I think it's going to be a major existential crisis for business over the next several years of can they live up to these new hopes and expectations and aspirations that have been heaped upon them and heaped upon them because they are the only institution that's both trusted and competent.

So those are the four big trends that we've been tracking that have all in some ways come to us for this year.

Host: It's interesting you say that because your report also found that most of the respondents identified "my employer" as the institution that they trusted most, which again, refers to the two you're talking about. So what responsibilities do employers then have in virtue of that trusted status? You mentioned they're not necessarily equipped for this nor trained. Is that going to become a necessary part of this job to be a leader you're going to have to navigate this world. And so you better learn it to be qualified to get the positions?

Dr. David M. Bersoff: So essentially at the level of business first, before I get down into the employer, the fundamental role of business is in the midst of being redefined to include expectations of contributing to society beyond supplying, products, jobs, and philanthropic dollars, what I was referring to. As I also said, these expectations are way beyond what can be accomplished with CSR as a bolt on corporate function. And so what we're seeing is that doing good and being values driven is basically becoming an intrinsic part of what it means to be a trusted company and good public standing. So as a result, values and purpose are going to have to become part of the corporate DNA of any enterprise that hopes, And we've got data to support all of this, that hopes to retain customers over the long-term, keep their best employees and attract investment money. All of those stakeholders are looking for business to do this. It's not a choice for business, it's not a choice for CEOs.

That said, within business, my employer holds a very privileged position of trust. We find that 76% of people trust their employer to do what is right. And that's a number that's been very stable over the past four years. So while we sometimes see some gyrations and trust associated with the other institutions, that trust in employer is high, consistent and rock solid. And I think it enjoys the special status for several reasons. First, the employer-employer relationship, it's a personal relationship. So you know your employer in general, they know you, it's a local relationship. It's a consistent presence in your daily life. And one of the things we're seeing these days is that trust has become more local. And third, you have leverage over your employer. So via collective action, employees do have the power to get their employers to change policies and get involved in issues. And these attributes all help to spawn and drive that trusting relationship.

But beyond that, what makes this relationship special and important is that employers have power, they have resources, they have exponentially greater wherewithal to get things done than I do as an individual. So this relationship between employer and employee is not just a close, trusting relationship, it's a personal relationship with a rich, connected and powerful other, and it's the only such relationship most people have in their lives. And so you can understand why there's so much emotional energy around the employer, and you can also understand why we are highlighting the importance of that relationship. Because this relationship is I've described it, it puts employers and I would argue a unique position to supply their employees with what they're currently seeking most ardently, which is trustworthy information, reassurance about their future and the opportunity to create positive change.

And these are becoming responsibilities of the employer to supply their employees with these things, which they can't get elsewhere. And in general, I think it's going to be difficult for untrusted institutions to rebuild trust in themselves in order to regrow trust needs a toehold. And from what I'm seeing, employers are that toehold and they really need to embrace that role. I think things are going to get better. The information problem is going to get addressed. Trust is going to be renewed, not so much from one grand gesture, but the actions of thousands of employers working with their employees and growing or regrowing that trust and faith in the system from the ground up.

Host: I'm wondering how you saw that last year obviously COVID has been here for a year now, we're recording in March. How has it affected people's trust in the societal institutions? And do you see it lasting or what's the lasting impact from that?

Dr. David M. Bersoff: Yeah, no, it's an interesting question. So we collect our trust data in October, November, and we really sit in January and of course, we released data in January of 2020, which of course, was prior to the pandemic, really becoming a reality, certainly in most of the Western countries. And then of course, it burst onto the scene and it had a huge impact on everything and every body. And so we went back out into the field to see what if anything the pandemic had done in terms of institutional trust. And what we found is that there was a trust search, trust in all the institutions actually went up and government in particular saw this big upward movement in trust. And it was actually at that point, the most trusted institution. Now, it's not unusual to see something like that in times like this it's that rallying around the flag idea or the circling the wagons that when you're in the midst of a crisis, people really rally around their institutions.

And for some, it's an act of faith, for some it's an act of hope, for some it's the product of psychological necessity because the prospect of living through a major crisis at the mercy of untrustworthy institutions is just a little too scary to contemplate. But the idea is you do tend to see trust surges around events like this. And then the question becomes, is that search a bubble or is that a real change in the status of that institute? So like I said, we went out mid year, we saw the surge. We asked ourselves, is that a bubble or not? We're back out in the field at the end of 2020, which was at that point, close to a year into the pandemic. And what we found is that faith or hope or psychological defense mechanism that had caused trust to go up had collapsed in the face of the realities of a pandemic that just wasn't being well-managed.

And as a result, the trust bubble burst and all of these institutions, which had this opportunity to burnish their image, they had this influx of faith and trust. Most of them squandered it, government squandered it more than any of the other institutions. But in general, that's been the story, that bubble has already burst to a large point. So the crisis itself increased trust, but how the institutions responded and reacted to that crisis has proven to not be up to the expectations of people. And that bubble has burst.

Host: I was struck mostly for, by the trust chasm you described. And I'm wondering, obviously, COVID, must've played into that some as well, what can be done to reduce that gap? And do you think it would ever be fully erased? Is there some way to get people together again on basic facts and at least understanding what the day of the week is or what time it is or anything?

Dr. David M. Bersoff: The trust gap, trust chasm, I don't think will ever be fully erased for the simple reason that that top 15%, the more educated, the more affluent, the more informed will always be in a better position to harvest the benefits of society or capitalize on the status quo. So there's always going to be a trust gap there, but what can and needs to be addressed is that the gap needs to be closed such that at least the top and the vast middle are not living in two separate trust realities. Because what we find in many markets is that the well-off are living in a world in which institutions are trustworthy and can be trusted while the mass population is living in a world where institutions are largely untrustworthy.

And that dual reality, again, feeds into two groups of people that aren't on the same page, that don't see the same needs, that don't see the same problems that need to be fixed, and you can't get anything done when you have that bifurcation difference of experience, different realities, societies, especially democracies tend to grind to a halt if there's too many people split between two different realities. In terms of how to address that, I think the first thing that needs to be done is a dismantling of the structural inequalities within society. So you don't get these K shape situations. You need to have a situation in which if there's prosperity, everybody is sharing in it. So maybe not to the same degree, the same level, but if the country's doing well, almost everybody in the country is doing well. If the country isn't doing well, then almost everybody in the country isn't doing well. And so it gets everyone on the same page, we're all in the same boat. When you've get that separation, that's a recipe for disaster. And that separation tends to be driven by structural inequalities.

And you see that around the issue of racism and structural inequalities around racism and how that basically pushes people off in two different trajectories. The society as a whole needs to address the issue of structural inequalities. And then the other thing that I think is important that societies aren't generally good at is change management. So we found in the 2020 barometer, actually, that 57% of respondents are worried that people like them are losing the respect and dignity that they once enjoyed in this country. And so, while I think part of the trust chasm is driven by economics, differential economics, structural inequalities, the other part of the trust chasm or another part of the trust chasm is driven by this sense among sizable number of people of being left behind, being left out, losing dignity, losing attention, not mattering anymore, not mattering anymore is huge.

People don't take that lying down, it's not something they can accept and feeling like you're being left out or left behind or not considered, that drives sense that the things aren't fair, that our institutions lack ethics, that I have to take all I can get now, without any concern for the future generations, it really moves people to extreme behavior. It moves them to selfishness. It moves them to scapegoating, immigrants, minorities. It really is a very pernicious element within society. And I would rank it second to the infodemic as an embedded attitude or perspective that's really making things unstable, unpleasant and leading into a lot of the polarization and polarity that we're seeing in society today.

Host: The barometer also breaks down findings by country and region, as it is worldwide. What are the biggest differences in trust between the US and China, the US and Europe, Latin America, and anything in these particular areas surprise you from the findings?

Dr. David M. Bersoff: Yeah, sure. Actually, can I just go back to, I wanted to finish my answer to the other question. So I detailed the aspect of social inequalities, and I explained the problem of people being left behind. And so the cure for people being left behind is really this idea of better change management. What our institutions need to do to increase their efficacy and foster a spirit of cooperation versus entrench against within society, they need to make change seem less threatening and more inclusive. And at the same time, they need to make the people who will inevitably be disrupted by change, feel as protected and respected as possible. Change is going to happen. Change has to happen. Change needs to happen. What we've traditionally been very bad at is managing that change, acknowledging that certain people aren't going to benefit from that change, that helping people see their place in this new future that we are creating and protecting those who will be hurt by the future.

Until we start doing that, you're going to continue to see that gap because change, progress, innovation is inevitable. We need to find a way of making that inevitable change less threatening big portions of the population in order to address that gap between the trustors and the non-trustors.

Host: It sounds like a big task for education, and we should committed that we make to it. They're all tied together that way. The barometer breaks down findings by country and region. So what are some of the biggest differences you see between trust in the US and trust in China and the US and Europe and Latin America?

Dr. David M. Bersoff: Sure. So we do look at trust by country and region, but that said, we don't really encourage looking at trust in one country versus trust in another country because there's different response tendencies at different parts of the world. And so you have a country like China, they tend to be more agreeable. They tend to agree with statements. They tend to use the higher ends of scales, et cetera. And so yes, there is a big trust difference between China and the US. China, when you look at the data, it looks to be a more trusting society and more trusting of its government. Now, part of that could be because China, they emerged more quickly from the pandemic, they had stronger economic growth, there's less governmental polarization preventing progress, but it's also likely partially due to the fact that as I said, the Chinese tend to be more positive than the Americans do.

But what I do find that's really interesting in terms of the US versus China, is that when you look at how the rest of the world perceives China and the US and the trustworthiness of the Chinese government and the US government, what you find is that neither of these most powerful countries in the world, the natural candidates for global leader in this time of crisis, neither one of them is trusted by the rest of the world. So here you have the two most logical countries to take a leadership position in the world. They have very different governments, very different political systems, very different histories, very different philosophies. And yet neither one has been able to win the confidence of the rest of the world. There is now this open position as the defacto global leader. And right now the two most logical suspects for occupying that position just are not from a position or from the point of view of trust, equipped to be in a leadership position.

Host: And the same for Europe and Latin America?

Dr. David M. Bersoff: One of the big dividing lines, it's not so much region as it is developing versus developed markets. So that's why you see some skews for North America and Western Europe versus Asia and other places we look at, it's not so much geography as developing versus developed. And what you find is that developed markets tend to be less trusting than developing markets and the people in those markets tend to be less positive. And I think part of the reason for that, we get people who are somewhat puzzled. It's like, well, life in America is so much better than life in India or life in China, how come our trust numbers aren't higher? And so I talk about the fact that when people are assessing how they're doing, they don't compare themselves, people in the US sitting around the dinner table, assessing how they're doing. They're not sitting there looking at their lives and saying, "Well, at least we're doing better than the Chinese." They're looking at their lives and they're saying, "Am I doing better than my parents? Are we doing better than we were doing five years ago?"

You compare yourself to other groups that are like you, or you at a previous point in time. And in some, in a country like the UK or France or the US, there's going to be more and more people saying, "You know what? My parents actually did better than I am, or you know what? I actually feel like I've lost ground over the last five or 10 years." That's going to lead you to distrust institutions, to lose faith in the system even if your benchmark day to day life is objectively higher or better than people in developing markets. But those people in developing markets, they're sitting around the dinner table and they're saying, "You know what? We have more freedoms than our parents and grandparents did. We're doing better than them. We're more educated or more advanced. We have more things. And you know what? We, as a family are doing better than we were five or 10 years ago." That does a lot to drive the sense that our institutions are trustworthy, the country's on the right track, things are okay, things are looking good.

And that results in some of these regional differences where the more developed countries just appear to be less trusting, less optimistic, less faith in the system, than some of these developing markets, even though the standard of living in those developing markets, isn't as high.

Host: It's a question of forward momentum, yeah. I guess if you're moving forward, you're feeling positive.

Dr. David M. Bersoff: Exactly. It really is about that momentum. It doesn't matter how well you're doing, if you see yourself going backwards, that's all you need. Then it's like, life sucks. And on the converse, if you see things moving up and getting better, you can absorb a lot of punishment, a lot of hardship when you're looking towards a future that's brighter than your present.

Host: I really enjoyed this. Let me get you out of here with one last question then, are you hopeful as you're speaking about hope for the future of truth and why or why not?

Dr. David M. Bersoff: So when I look towards the future in general, I keep in mind that this country survived McCarthyism and survived the Cold War, the Cuban Missile Crisis, unrest, lies and misinformation around the Vietnam War, the Civil Rights Movement and all the protests of the 60s. So the country has come through tough times and seemingly attractable differences in our values before, and so that, our history gives me hope. But to the point you were raising, I don't think that unless until we cure the infodemic and emerge from information bankruptcy, I don't see a way forward. And what that means at a foundational level, until the rewards in society. And those rewards could be money or power or influence until those rewards are greater for spreading truth than for spreading lies and are greater for facilitating cooperation rather than fomenting divisiveness, especially democracies, we're going to continue to founder and suffer and weaken our societies.

Certainly, I think business has a big role to play in fixing some of these problems, particularly around information, but ultimately, we also need government and media to start working again. And as bad as January 6th was as a watershed moment of distrust and misinformation, I still don't believe we hit rock bottom, even with that event yet. And I do worry that it might take an even bigger shock particularly to this country before we shake ourselves out of that, before there is a greater reward for truth over lies and for cooperation over polarization.

Host: Certainly sobering as we go forward. And we joked before about agreeing on what day it is, but there are probably some people who would argue. It's scary.

Dr. David M. Bersoff: Absolutely.

Host: Hopefully, we'll figure this out as we go, but I want to thank you so much, David. This was really interesting and great. You guys do such a great job with this report and it's always a wealth of information. And I know our listeners are fascinated by it as well as I am. So thank you very much and stay safe. And we look forward to seeing you again in the future.

Dr. David M. Bersoff: You bet. Thank you.

Outro: We hope you enjoyed this episode. The Principal Podcast is brought to you by LRN. At LRN our mission is to inspire principled performance in global organizations, by helping them foster winning ethical cultures rooted in sustainable values. Please visit us at lrn.com to learn more. And if you enjoyed this episode, subscribe to our podcast on apple podcasts, Stitcher, Google podcasts, or wherever you listen. And don't forget to leave us a review.

S6E12 | Bringing an intentional mindset to the boardroom

Abstract:

How are boards of directors of major companies coping in 2021 with the increasing expectations from so many stakeholders? How are boards equipping themselves to meet the challenge of overseeing large global organizations? In this episode of the Principled Podcast, Marsha Ershaghi Hames, Partner at Tapestry Networks, guest hosts a conversation about the critical role boards play in shaping ethical corporate culture with Don Cornwell, an accomplished corporate leader who currently sits on the boards of AIG, Natura & Company, and Viatris. Listen in as Marsha and Don talk about the importance of intention when making decisions at the board level—especially as it relates to diversity, mentor sponsorship, and professional guidance.

 

[1:28] Guest Don Cornwell’s diverse background and pioneering career journey.

[3:25] Where are we now in terms of diversity on Wall Street?

[9:22] Where is the U.S. going wrong in terms of maximizing capital and production?

[13:12] How can boards and corporate leaders take the first steps to open doors and drive intentional sponsorships while navigating DEI?

[21:08] How can boards begin to transform their own culture?

[26:09] How boards can take action to cultivate ethical culture given the context of these times. 

 

Additional Resources:

Article:  Father and Son Investment Bankers Describe Wall Street Regrets [Subscription required]

 

Featured guest:

Don Cornwell retired as chair and CEO of Granite Broadcasting Corporation in 2009, a company he founded in 1988. Granite developed from an entrepreneurial idea into a diverse company operating 23 channels in nine television markets and became one of the nation’s 25 largest television station groups.

Previously, Don was employed for 17 years in the Investment Banking Division of Goldman Sachs. While at Goldman Sachs, he was engaged in public and private financing and merger and acquisition transactions for publicly traded and privately-owned companies, with a primary focus on consumer product and media companies. In addition to transaction responsibility, he served as the chief operating officer of the Corporate Finance Department from 1980-1988.

Currently, Don serves on the board of directors of AIG, Inc., Natura Holdings, Viatris Inc. and Blue Meridian Partners, Inc. Don is also a trustee of Big Brothers/Big Sisters of NY. At AIG, he is Chair of the Compensation and Management Resources Committee and a member of the Nominating and Corporate Governance Committee.

Don served on the boards of Pfizer from 1997 to 2020, Avon from 2002 to 2020, and CVS Caremark Corporation from 1994 until 2007. At Pfizer, he was Chair of the Audit and Regulatory and Compliance Committees and a member of the Nominating and Corporate Governance and Science and Technology Committees. Viatris was created as a public company as a result of a strategic merger of Pfizer’s Upjohn business with Mylan Inc. At Avon, he was Lead Director of the board, Chair of the Finance and Strategic Planning Committee and a member of the Nominating and Governance and Audit Committees. Avon was acquired by Natura in 2020.

Don previously served on the board of Occidental College, the Advisory Council of Harvard Business School, the MS Hershey School and Trust, the Wallace Foundation, the Edna McConnell Clark Foundation and as Chair of the Board of the Telecommunications Development Fund appointed by the Chairman of the FCC. Don received his BA from Occidental College in 1969 and MBA from Harvard Business School in 1971 and has been honored as Alumnus of the Year by both institutions.

 

Featured Host: 

Marsha is a partner with Tapestry Networks and a leader of our corporate governance practice. She advises non-executive directors, C-suite executives, and in-house counsel on issues related to governance, culture transformation, board leadership, and stakeholder engagement.

Prior to joining Tapestry, Marsha was a managing director of strategy and development at LRN, Inc. a global governance, risk and compliance firm. She specialized in the alignment of leaders and organizations for effective corporate governance and organizational culture transformation. Her view is that compliance is no longer merely a legal matter but a strategic and reputational priority. 

Marsha has been interviewed and cited by the media including CNBC, CNN, Ethisphere, HR Magazine, Compliance Week, The FCPA Report, Entrepreneur.com, Chief Learning Officer, ATD Talent & Development, Corporate Counsel Magazine, the Society of Corporate Compliance and Ethics and more. She hosted the “PRINCIPLED” Podcast, profiling the stories of some of the top transformational leaders in business.

Marsha serves as an expert fellow on USC’s Neely Center for Ethical Leadership and Decision Making and on the advisory boards of LMH Strategies, Inc. an integrative supply chain advisory firm and Compliance.ai, a regulatory change management firm.

Marsha holds an Ed.D. and MA from Pepperdine University. Her research was on the role of ethical leadership as an enabler of organizational culture change. Her BA is from the University of Southern California. She is a certified compliance and ethics professional.

 

Transcript:

Intro: Welcome to the Principal podcast brought to you by LRN. The principal podcast brings together the collective wisdom on ethics, business and compliance, transformative stories of leadership, and inspiring workplace culture. Listen in to discover valuable strategies from our community of business leaders and workplace change makers.

Marsha Ershaghi Hames: How are boards of directors of major companies coping in 2021 with the increasing expectations from so many stakeholders? How are boards equipping themselves to meet the challenge of overseeing large global organizations? Hello, and welcome to another special episode of the Principled podcast, where we continue our conversations about the critical role boards in shaping ethical corporate culture. I'm your guest host, Marsha Ershaghi Hames, a partner at Tapestry Networks. And today, I'm pleased to be joined by Don Cornwell, an accomplished corporate leader who currently sits on the boards of AIG, Natura & Company, and Viatris. Don, thank you for coming on the Principled podcast.

Don Cornwell: Marsha, thanks for the invitation. I look forward to our conversation.

Marsha Ershaghi Hames: Excellent. So Don, let's share with listeners a little bit. You've had a very unique background from your early career at Goldman Sachs to founding and leading Granite Broadcasting, which at its peak, was the largest African American-controlled television broadcasting con in America. You've continued to lead a distinguished career of service on both corporate and nonprofit boards. Could you tell our listeners just a little bit more about your amazing journey?

Don Cornwell: Well, I've done a lot of moving around for a kid who was born in segregated Oklahoma in 1948. My family moved to the Pacific Northwest when I was five, so they could frankly continue their careers as educators. And so I lived in Tacoma, Washington, until I graduated high school in 1965, then left to attend Occidental College in Los Angeles, followed immediately by a move to Boston to attend Harvard Business School. And from there, often New York to join a considerably smaller Goldman Sachs. As you know, I left Goldman Sachs in 1988 after 17 years. I started a business, you've referenced it, Granite Broadcasting Corporation, and we built that for 20 years. And then I left the company and essentially went into so-called retirement, which I've failed at miserably and have continued to serve on corporate boards. You didn't mention, I have to mention, Pfizer and Avon and CVS. I've been very proud of my association with all three of those companies. So I wouldn't want to pass that.

Marsha Ershaghi Hames: Well, you mentioned your journey with Goldman Sachs. You had joined their investment banking department in the early '70s. And I actually was reflecting on that fantastic interview with Bloomberg, the profile with you and your son last year. Your story is very pioneering for African Americans working on Wall Street. As you look back on that experience, what are some of your observations on diversity on Wall Street, and essentially the being the only one in the room? Has there really been progress?

Don Cornwell: So I did the interview, the Bloomberg interview with my son, because I thought it provided a context of experience by African American professionals over a significant period of time. I started at Goldman Sachs in 1971 and he joined, I should say, after I graduated from Harvard Business School. And he joined Morgan Stanley in 1998 after he graduated from Stanford Business School.

I am shameless about promoting the article. So if any of your listeners have an interest, they should check it out. On your question, so I would say the industry is making what I call directionally correct movement. That's a good thing, but I guess I'm at an age in life where I can say that I think the progress is too slow and I think it's not deep enough. And so in making that comment, I can point to some really terrific success stories at various financial firms. And by financial firms, I'm incorporating everything from banks and insurance companies to the typical Wall Street firms that you think about.

But in thinking about those success stories, I'm hard pressed to find what I would call an adequate pipeline of aspiring and qualified young professionals available for the succession planning of the future. I've found, in my career, that when you build a pipeline, and that's something that Pfizer talks about a lot, but when you build a pipeline of talent, the issues that we're discussing become somewhat moot. However, when you don't have a pool of talent, you then find yourself scrambling to, and I put quotes around the word "improve," from a very unimpressive baseline.

And frankly, in this day and age, that does not go unnoticed by shareholders, and stakeholders, and society. So I guess I would give the industry a mixed grade. I think it's getting better. I think that there's some great success stories that I read about and know about, but much more work to be done.

Marsha Ershaghi Hames: Speaking of that, I actually read another article or a derivative article. And I read a quote here that said "Wall Street has a problem with black excellence." And most super successful people on Wall Street are just excellent at what they do and how they got there. However, when someone is excellent as an African American, it is not embraced. How does that sort of land with you or resonate with you?

Don Cornwell: Well, it's an interesting observation. I don't know where it comes from. I think I would sort of turn it just a little bit to say that I felt, in my time, that the process of growing in a career, no matter who you are, requires an effect. What I would describe as someone who intentionally wants to see success. So the observation, to be candid that I've made about the financial community, I think, is a problem across industry and the country. I think we simply have not done enough to hire, encourage and retain young people of color, or women, in general industry. 

I think that we leave a lot of talent behind. We're getting better, but we leave a lot of talent behind. So when I talk about, I have a theme of being intentional about a success experience, I can certainly say that each and every one of the success stories that get spoken about a lot, people like Ken Chenault that Ken Frazier, just to name a few, and I can name many, many others, that they can point to those moments in their careers where they were given a helping nudge along the way.

And so I'm sort of simple minded about it, which is that if people in power want to see success in that regard, they have to be intentional about it. It has to be something that's on their mind. They have to insist on it. And quite frankly, when decisions, tough decisions. Have to be made as to whether somebody's performing or not, they have to be willing and not afraid to call it. Because as I said, everybody isn't going to make the cut, but it's great if people can feel comfortable that they have that opportunity.

In the Bloomberg interview, and I hope you don't mind my going on at lengthy here a little bit, but this is one of my favorite topics. I spoke about intentional sponsorship. That's my theme. And I spoke about it in context of senior managers. I read, referenced a fellow that I called my very best boss ever. He has unfortunately passed away. His widow read the interview and called me and was quite amazed at how I felt about this. And I think she understood things that I had said to her over the years about how important he had been to my life and my family's life in terms of my own success.

So I always say that during that eight year period, when I had his sponsorship within Goldman Sachs, and by the way, he wasn't necessarily a great guy. I've had people contact me after the interview and say, "Well, he wasn't very nice to me." And so I get that, but I do know that once he asked me to join his team, then I became part of the team and he became my advocate. And that was the best period of my career at Goldman Sachs.

And quite frankly, my worst periods were when I didn't have that guidance. I think, and I hope you'll let me go on just a little bit longer, but I think that as a country, we're not maximizing our human capital. We see that every day as we work our way through the pandemic. I mean, think about it. Human capital, with a bit of help from our global partners, came up with multiple ways to stop the coronavirus. Okay. I mean, that's amazing if you think about it. I mean, we're all somewhat concerned these days about the continuation of variants and issues about whether you get a boost, et cetera. But the facts are is that we found a way, in a very, very short period of time, to bring a halt to this really vicious virus. And so that's the wonder.

On the other hand, we are also picking up the newspaper and learning that we are short of people to do the most basic jobs, as well as, quite frankly, many of those requiring much more in the way of skills. As a country, I think we've given up on our public education system. It used to be an advantage for us. We spend a lot of time bashing teachers and so forth, and fighting about the curriculum and so forth.

We're resisting efforts to train people. We need the labor, but we don't want the cheap labor coming across the border, even though we don't necessarily have the labor to fill many of those jobs. And I'm going to be a little controversial in my next comment, and you guys can edit this out if you want. But I have long said that the country long benefited from structural inequity/ if you think about the quality of teachers we had many, many years ago, when one of the best jobs available to a bright woman or a person of color was as a teacher. And I used my mom as an example, she finished first in her class in college in 1942. There were no corporations or financial institutions on her campus aggressively recruiting, particularly at an HBCU.

And so society benefited because you had this class of individuals who were largely directed into a profession that was the best available to them, and we're indebted to them, but that's changing. And without getting into the debate about teachers, and quality, and what have you, that's changing. And that's a debate for another day, but it goes back to my opening comment, which was that we're not spending enough time maximizing human capital. And I think that's a problem. And it ties back to DEI. It ties back to ESG. It ties back to a lot of things that we might talk about. So I'll pause there. I know I'm talking too long.

Marsha Ershaghi Hames: No. Yeah. So first of all, Don, I mean, you are touching on some very, very timely issues that, I mean, companies are exploring ways to essentially future proof talent models that clearly we've got an inequity, as you say, of infrastructure and how organizations go to recruit and build their pipeline. So when I sometimes hear the comments of, "There isn't a pipeline," or "We are not able to build a pipeline." Sometimes, I often think, "Where are you looking?"

And there are some organizations today that are starting to try to build bridge around skill mobility, bridges into minority serving institutions. You mentioned HBCUs. But to go and to build recruitment pipelines to offer opportunities in other types of fields that may not have been historically or traditionally built into that recruitment infrastructure. So you're really touching on an important point that we probably should set up another conversation to unpack acutely.

However, you earlier also mentioned this kind of societal shift that's a lot of pressure from company consumers, and stakeholders, and investors on companies to take more responsibility. And I like how you share your reflection on that intentional sponsorship by this mentor in your life. I am wondering, in the area that you sit today from your vantage point, how can boards, how can corporate leaders take those first steps to, whether it's mentorship programs, or to be more prescriptive or surgical in driving this notion of, "We need to open doors. We need to find ways to design more intentional sponsorship."

Are these conversations happening within the board? Because I know, again, this is unique to your story. And I've heard other similar stories where it was that one mentor or sponsor who took them under their wing and just offered the difficult, often difficult guidance, to chart out the path. But how can we do more of that? Because clearly, the pressure's there for companies to take responsibility, but it's the how part, it's the pragmatic. What are the steps to activate that? What are your thoughts on that and what are you hearing or observing from where you sit today?

Don Cornwell: So I think every board room where I have the honor of residing, the topics on the table, the topic is one of discussion and there's work being done and reporting out on the topic. So I think it's on the agenda. I'm not sure, from my perspective, whether corporate boards today really recognize that these societal forces that we think about, how powerful those items are for the future, that we get very caught up in a variety of other topics, which are also very, very important.

And I'm sure you'll ask me about a few of those at some point here. But I do think that, and to some degree, this kind of gets to one of the notions that I have about the composition of boards, which is the notion that we actually need more people in the room with not only courage to ask tough questions, but also a wider lens in many instances, because I'm not sure that we're really necessarily seeing what's coming at us from a lot of different angles.

If I can go back to the comments I made about diversity and inclusion, and a little bit ESG that you had asked about that, I really think these are societal forces that are starting, whether we want it to or not, to drive the corporate board agenda. So just a couple of thoughts. Can you imagine what the board discussions in Facebook are like these days? Or if you've been following Netflix. Could be a more successful company, quite frankly than either of them. All right.

I mean, Facebook was founded... My daughter is 36 now, and she's a 2007 graduate of college. And I remember when she was a freshman, she and all of her friends were talking about whether or not they would sign up for Facebook, which had only been started maybe two years before they were to be freshmen. And Facebook's the bad people, there's all kinds of negative things being said about Facebook, but just look at the corporate and business success or Netflix. I mean, my God. How many times did I find the little red envelopes around my house that had never been returned? And talk about a success story.

But what are they talking about at those boards? They're talking about all the issues that here on cable television 24/7. At Netflix, you're talking about comedian who has decided to be less than politically correct in the way he talks about things. And so that raises all kinds of challenges about speech and what's appropriate. But then you move from that and you've got, [inaudible 00:16:55] Exxon. My God, what could be more... There it is, Exxon. And you literally have activists find a way with major shareholders to challenge their corporate strategy. And it's front and center around climate and sustainability. What are you doing? And they end up changing out board members.

And then there's one that you may or may not have heard of, but I pay a lot of attention because of my history in the broadcast business. It's a company called Tegna, which is essentially the old Gannett company's television station group, which is quite a large group. And they have been under attack for three years by a very, very sophisticated activist shareholder. And his primary focus, his primary focus has been on the treatment of people and particularly the treatment of people of color within the company. And it's been kind of a fascinating thing to watch. The corporate, the board has succeeded in being reelected each year, but the noise gets louder and louder. And at the current time, that activist has now joined forces with one of the major private equity firms and has made it an offer to who buy the company.

And so that board is very much under siege. And so I see these forces from society demanding a seat at the table. And quite frankly, these are not the topics that are ever at all candor on the agenda in most instances. You get me started on this, so I apologize, but you think about the tensions that corporations are having to navigate as between national and global interest. Anybody that's doing business in China, those of us who deal with compliance, and risk, and what have you, we spend all of our time thinking about China as a compliance issue. But you've got geopolitical stuff there. I mean, don't go to China and start talking about your great relations in Taiwan. And they've got their views about data privacy. And quite frankly, beyond China, just across the globe, there are views about that.

And so that's my way of saying that boards are being forced by the outside world to think about stuff, including the issues... DEI is not just a, "Oh, we got to check that box." Okay. In my opinion, it's part and parcel of so much that's going on out there that boards are having to deal with. Then, of course, we've got to deal with cyber. I mean cyber's going to destroy us if we're not careful. Compliance and ethics is an amazingly significant issue. If you saw yesterday that the whistleblower in the LIBOR scandal is getting a $200 million payout. That's going to motivate a few people.

And then I always finally point out, and by the way, we're hopefully coming out of a pandemic and we're going to be worrying about organizational culture, given that most of us have spent two years working remotely, and we got to figure out how to get back together again. So longwinded answer to your question and hopefully a little bit helpful.

Marsha Ershaghi Hames: Yeah, no, no, very helpful. And I'm glad you've touched upon what we're witnessing in terms of this societal shift and the increased pressure from investors, regulators, employees, other stakeholders, just the demands on companies to show progress. Business resiliency, environmental climate transaction plans. And then, of course, there's no question in terms of not only human capital. And I don't really like the phrase human capital. Or natural capital sometimes is also on the climate stuff, but it's really our people, our talent and the innovations and the diversity of how they bring ideas to the table, can really transform and create a certain agility to business progressing. And as this is continuing to capture the board and corporate leaders' attention, I like the phrase when you said boards really are starting to get forced to think differently.

And I want to unpack that a little bit. So you touched on culture. I want to start with this notion of transforming board culture. And you mentioned earlier having the courage on the agenda to maybe ask more difficult questions. But how can boards, or you have had such a distinguished career, both as an executive and on serving boards. How can boards really start to begin to transform their own culture? Before boards can take the step for oversight of culture within the organization, how do they turn the mirror back and reflect on themselves and take the steps to really help cultivate a transformation within their own board culture?

Don Cornwell: Yeah. I'm probably more of a pessimist in all these things than many. And I don't know if that's helpful or unhelpful. My experience has been that crisis tends to drive focus, and we all get very comfortable doing what we do. We do it every meeting, whether it's four meetings a year or 10 meetings a year, whatever the case may be. And then it's when all of a sudden, we get something that comes in, sort of a curve ball that we're forced to try to get smarter. And so my best board experiences have been in situations where there is what I would describe as intentional diversity of voice around the table. And diversity has always thought about it from the context of gender, and ethnicity, and what have you. And I think those are very much part of it, but I also think that diversity of voice in terms of experiences and worldview is just so important.

I have found that when you have that... So you have to start with the notion that you are not going to figure it all out, okay? That bad stuff will happen. And so you want to be prepared to react, but then you should spend time, not only trying to figure out the root cause... But I guess I think it was Andrew Grove, the guy who founded Intel. He had a book called Only the Paranoid Survive. And I've always found that to be, at least that my business experience, just so true. That there's a need to constantly scan the horizon, looking for what's coming over the hill, that you could just not imagine. And so I think that best boards are trying to find ways to empower the management teams, to scan the horizon, to think about risk, think about the unimaginable, think about what you do when the unimaginable happens.

That's, I guess, my belief about it. I know a lot of people think that a lot of it has to do with the books and records and the control and so forth. And it certainly does, but I will tell you that I can go back and look at scandal after of scandal and crisis after crisis. And you discover that all that stuff that I just described, the books and records and stuff all seemed totally fine until you discovered that something else was going on that was much more difficult.

And so I'm a big believer in trying to inject a bit of imagination, creativity, energy, new ideas, new perspectives in the boards. I'm a believer in having boards that have some longevity and some experience. I enjoyed, in my long career on the Pfizer board, ultimately being the one that the new directors would turn to and say, "Don, why did we do that?" Okay. And there was great value to that, but it was also time for me to go. And that I'm pleased to say that one of the people that was recruited in the context, not to replace me, but in the context of my leaving, Scott Gottlieb. Scott and I had gotten each other in a year of overlap, and anybody who's watched television, he's a very, very bright young person.

And I just think that people who come to the party with different sorts of experiences can just bring so much to a board. And I urge boards to do that. I think some are trying hard. I think some are still, in my honest opinion, still checking boxes that satisfy the New York Stock Exchange, or some perceived notion of best practices, and not necessarily bringing enough wisdom and perspective to the boardroom table that can hopefully help management as they try to navigate their way through increasingly difficult times. So I'm talking too long. I'm going to stop there.

Marsha Ershaghi Hames: No, then you're actually spot on, Don. I mean, when you say "Crisis tends to drive focus," I mean, and clearly you're drawing from, you've served on boards of so many highly regulated industries. You mentioned Pfizer, you've got pharma, you've got finance services and so forth. Tell me, when there is crisis, when there are ethical lapses, what role can boards do, especially in these times with these shifts that we're discussing in society? How can they really take action to cultivate ethical culture in the organization? What are the steps they can take there?

Don Cornwell: So I don't want to get too specific, but I lived through one with one of my former boards, where the company ended up making a settlement with the government and writing a very, very large check to compensate for all sorts of perceived and admitted sins. I think that out of that, both management and the company clearly recognized that this had been an issue and that we needed to figure out how to do better. But the focus, which I greatly appreciated, and I had a little bit to do with leading, though lots of others were leading the charge, the focus had to do more with root cause, and how do we get there? What could we do to change? How could we make sure that the organization knew that that certain behavior was not part of what that company wanted to convey to the outside world?

So that really became a major investment of time and resources on the part of the company and with regular reporting to the right committees, audit, and regulatory and compliance, and then ultimately, to the board, about just what was being done, not only to prevent a repeat of what had happened, but also to what was being done to make sure that, within the culture, everybody sort of knew what was expected? And to be candid, it was made a lot easier because the CEO was not, in any way, either conflicted or hesitant. Very strong views on the issue. And quite frankly, personally, very embarrassed by what had happened. So that's what I call, what do you do afterwards? And so you deal with it. I mean, we did the usual stuff of figuring out who needed to be appropriately treated, fired, terminated, remediated, what have you. We went through all that.

But I think that the bigger learning, I think, for this company, and very much into it as I was leaving the board and I'm very much hoping that that will continue to be the case, was really what I would describe as, "So let's scan the horizon. Let's figure out how to identify the next issues and see if we can get ahead of it." And I mean, they literally formed a... I guess I hate to call it a committee, but I guess it's a committee, that on a regular basis, was effectively reviewing, within this particular part of their business, sales practices and new developments, et cetera, and looking at where there might be issues, my contribution, which I think they followed, was to find the person in their organization that nobody tended to like, who was not afraid to say, "But, sounds good, but..."

And to empower them to find ways to reward the person for bringing an independent and a challenging viewpoint. That's hard in organizations. I don't know how well they did with that. I think they did some of it, but the point is that you're trying to be ahead of it. You're trying to recognize that bad stuff happens. That you can talk to the cows come home, but bad stuff happens and it will happen. And people for either evil reasons or innocent reasons sometimes go over the line, go where they shouldn't go. You just have to recognize that that's going to be the case.

From a board perspective, I always took the position you have to recognize that. You have to make sure managers know that bad news can be delivered safely, that you're not going to all of a sudden have the hanging party go out because someone came in and told the audit committee that there had been an issue, but that what you really wanted was, "So how do we find this out? What are we doing about it? What do we think the causes were? What can we do better?" And then you go through the checklist.

So again, not sure if I responded to your question, but I do think that boards are having to organize themselves around these challenges. And in my opinion, there are no right answers. There's no exact answer to any of it, which is why I always argue that you got to talk about it a lot. You got to recognize that sometimes the agenda of that's laid out isn't necessarily the agenda that you really need to be focusing on, and at least have some discussion about that, so that the person who might have a different idea can feel empowered to bring that idea up. Anyway, I'm going to stop there.

Marsha Ershaghi Hames: You're hitting really excellent points. I feel like we could continue this for

a good another hour because culture in and of itself, it's so elusive. And to your point, there's the agenda. And then there's the fuzzy noise. And how do we extract that clear focus? And while, so glad you said this, bad stuff happens, it'll continue to happen and crisis continues to unfold.

However, I think it's, how do organizations take a step back and try to see, what are the lessons that we can learn? How can we be a little bit more acutely aware to try to identify these signals early? And how do we really foster a culture where management is also comfortable coming in and escalating, or bringing these to our attention sooner? Or what are the challenging questions we can ask of management to try to uncover these issues sooner?

So it's sort of a mutual dialogue here, but clearly, Don, this is a conversation we could probably continue to have, but we're reaching the end of our time. And I have learned so much from you. I feel like I was intentionally sponsored today. So many new ideas are sparked in my head. So thank you so much for sharing your time and for joining us on this episode today. And I want to say to our listeners, this was a real special treat. We're just so thrilled to have Don share his reflections and experiences here. And I'm Marsha Ershaghi Hames. With gratitude for tuning in to the Principled podcast from LRN, and I'm going to sign off. Thank you.

Outro: We hope you enjoyed this episode. The Principled podcast is brought to you by LRN. At LRN, our mission is to who inspire principled performance in global organizations, by helping them foster winning, ethical cultures rooted in sustainable values. Please visit us at lrn.com to learn more. And if you enjoyed this episode, subscribe to our podcast on Apple Podcasts, Stitcher, Google Podcasts, or wherever you listen. And don't forget to leave us a review.

S6E11 | Is gamified learning really all fun and games?

Abstract:

Gamification involves more than just shooting lasers and collecting gold coins. When done well, it has the power to enhance learning experiences and influence the way people make decisions. In this episode of the Principled Podcast, LRN Learning Director Kai Merriott speaks with Johnny McMonagle, one of LRN’s lead Creative Designers, about how to leverage gamification effectively when developing E&C training. Listen in as Kai and Johnny discuss the process of identifying the right opportunities for gamified learning, the importance of telling the right story with training material, and their favorite gamified elements—including a 3D-printer of doughnuts.

 

What You’ll Learn on This Episode:

[1:25] What is gamification?

[3:02] What comes first - the story or gamification?

[7:40] The significance of using music in games.

[10:07] Making a game intuitive for the user.

[16:33] How long should a game really be for optimization?

[19:35] How to ensure a game reflects the specific task at hand.

[20:40] How important are the visual components of the game?

[26:19] How to keep a game engaging and relevant by tracking progress.

[29:10] What would the best and worst gamified courses look like?

 

Featured guest:

Johnny McMonagle brings over 20 years of experience in e-learning and instructional design to LRN. As Lead Designer, he leverages his graphic design and animation skills to develop interactive elements for training software that create more engaging learning experiences and encourage ethical behavior. He also works collaboratively with clients and internal stakeholders to ensure these learning products deliver effectively on key business objectives. Johnny specializes in drawing, illustration, and character and concept design.

Prior to joining LRN, Johnny was the Lead Designer at Interactive Services, where he developed interactive training elements using Flash and Photoshop. Before that, he worked as a graphic designer at the e-learning company MindLeaders. Johnny received his diploma in classical animation at Ballyfermot Senior College in Dublin, Ireland.

 

Featured Host: 

Kai has worked in learning management and instructional design since 2001 and has worked at LRN (formerly Interactive Services) since 2013. As a Learning Director, he designs creative learning programs that focus on changing behavior, with a particular focus on pushing visual design and creating compelling animations and videos. He also leads and monitors his team’s instructional design approaches.

Kai has designed training on a variety of topics within compliance—including diversity, code of conduct, information security, anti-bribery, and money laundering. He’s also created training on brand awareness, systems training, social media policies, food safety, sales, customer service, and marketing. He has created these programs for companies all over the world including Bloomberg, Amex, Finra, Facebook, Kraft-Heinz, AIB, Johnson & Johnson, Deloitte, Morgan Stanley, Intel, BlackRock, State Street, BNY Mellon, and Colgate.

Several of Kai’s training programs and videos have won awards from Brandon Hall and other training institutions. He earned his MA in creative writing and BA in English at University of Chichester in Sussex.

 

Transcript:

Intro: Welcome to the Principled Podcast, brought to you by LRN. The Principled Podcast brings together the collective wisdom on ethics, business and compliance, transformative stories of leadership, and inspiring workplace culture. Listen in to discover valuable strategies from our community of business leaders and workplace change-makers.

Kai Merriott: When you hear the word gamification, what comes to mind? Do you think of shooting lasers and collecting gold coins or about influencing the way people make decisions? Too often organizations lean on gamification for the sake of making their ethics compliance program look more tech-savvy. So how can you ensure you develop gamification in a way that enhances training? Hello, and welcome to another episode of LRN's Principled Podcast, I'm your host Kai Merriott a learning director at LRN. And today I'm joined by Johnny McMonagle one of our lead creative designers for LRN, we're going to be talking about gamification in learning. So, Johnny, is a real expert in this space with more than 20 years of experience designing interactive graphic elements for e-learning and training software. So Johnny, thanks for coming on the Principled Podcast.

Johnny McMonagle: Hey Kai, thanks for having me, looking forward to this discussion.

Kai Merriott: So Johnny we've obviously worked together on many gamified learning projects in the past but just for the purposes of this conversation, how would you describe gamification and meaning the way that we talk about it?

Johnny McMonagle: Yeah. I think our approach to gamification is to make our training a lot more engaging, it's going to stand out from your normal e-learning and normal training and that is going to look and feel very different. It's going to be engaging, it's going to be enjoyable and it'll be short to the point, but the experience will actually be a pleasurable one and that's where the element comes in, that it's not just education it's actually a fun thing to do.

Kai Merriott: And these sort of gamified elements on top of that is in there so, well, it's fun and it's engaging but also it has game mechanics as well like I suppose scoring.

Johnny McMonagle: Yeah, we do that. Apart from the visuals, you will look at a screen and you will see things that you'll see on an arcade game, you'll see a score, you'll see a play button, you might hear the music and the sound effects that you're used to from games and you'll know the second you sit down to do it you're not just clicking next, you're seeing the elements that go into making a game.

Kai Merriott: So when I think about all the projects we've done together which have those gaming mechanics and the gaming elements, I kind of think that every gamified course has really two distinct elements that make it really sort of compelling and engaging and the first is I think a really good story from beginning to end, you put that story element in there that kind of drives you from one part of the learning to the next, but also really good interactivity. Let's start from the beginning in terms of, what do we actually think about first usually? Do we actually start with the story or do we start with what gaming elements can we put into this training?

Johnny McMonagle: Yes. And I've seen that where I think we always start with the story because the story will drive everything. How do we get from A to B on your learning journey? What is it we're trying to do? So we start with a story and we'll tell the story and everything will evolve from there. For example, a recent course I did was on global trade and we said, well, what is the story here? The global trade it tells itself, you're going to go around the world, you're trading with different countries so we said, how are we going to make that work?

And I said to the learning manager, I said, well, how about this? I found an image, it was a little plain going around the globe, I said, well, that's you, you're the character, and we're going to go from A to B and we're going to learn things as you go. Every destination is going to have a consequence and at the end of it you have learned something. And it led to itself that it looked like a game board, it felt like a game and every step of the way it felt you were learning but it was very game-like, and that was the story that led all of those decisions that we put into it and it worked very well.

Kai Merriott: And I think if you were to try and do it the other way around, you kind of start, oh, we know we've got 10 gaming elements to choose from and now let's try and build a story from that, that just never works, does it?

Johnny McMonagle: No, it's kind of working backwards where you're shoehorning just for the sake of it and I've seen it never gels, there are too many different elements just they don't work. We've seen that in putting sound effects into a quiz, it doesn't make it a game, it's just window dressing. I think it has to be more cohesive and it has to have a strong narrative and all the different elements from the visuals, the style of writing, the sound effects, it all has to tie in. And with the idea of gamification in your mind you have to think, does this play, does it feel like a game? I think that's what you're striving to do.

Kai Merriott: Yeah. And I think it's funny you said earlier about, you can't just put sound effects on a quiz and call it a game, I think that's absolutely right. I think you start with that really strong story but then I think we do layer it with sound effects and I think we shouldn't forget that either.

Johnny McMonagle: Yeah. I think sound effects are very important and they can really enhance the whole experience, it's just one of the many elements and it's a very rich element to have and it can add so much to the experience. We were saying before about sound effects in games, we hark back to the beginning of games, the arcade games again and we all respond to those. We know what a good sound sounds like and we know what losing a life sounds like just from our shared memories of arcade games and home video systems. These are common things that we all understand, we all can respond to and it really does enhance it but having it on its own you need to think of the other elements too and they all have to come together to make that cohesive game experience that feels like a game.

Kai Merriott: Yeah, absolutely. And I'm thinking about the sound effects, I think we slightly age ourselves, don't we? When we talk about arcade games.

Johnny McMonagle: This is true. Yes. Like the coin slot in the arcade. Because it's funny in saying that though, I think to this day we still harp back to the early Nintendos and we know what that sounds like. And even for people who've never played a game of any age, we go, yeah, I am now playing a video game. It is kind of a universal and nearly a timeless thing that we can all relate to it in the same way.

Kai Merriott: Yeah. There's something almost instinctive about, you said earlier, about the noise that means you've won and the noise that means you've lost a life.

Johnny McMonagle: Yeah. I think it's some sort of shared global experience that no matter where we're from we know what it sounds like. Even if it's a mobile game or a contemporary platform or whatever, we know that means you've just won something, that means you've lost something, it's kind of just a unit universal language.

Kai Merriott: Yeah. And I think as well we're kind of lucky in the age we live in which is that mobile games are so popular because I think they also do the same thing. They're very arcade game-like, very bright and colorful and kind of a lot of sounds, lots of music to convey a particular emotion, what do you think about the use of music in games and how important is that?

Johnny McMonagle: Yeah. The use of music can really enhance it and it's a very important thing to consider and it sets the tone for the whole experience. And again, there is the universal thing of we know exciting music to suit the tone if that's what you're aiming for, we know cinematic, we know that if we want this to be dark and somber that's what we do, as you would if you were scoring a piece for a drama you speak the same sort of language. It's funny you mentioned mobile gaming and the target audience for mobile gaming wouldn't be what you would normally think of gamers. And today's gamers I think most people think of people sitting with five monitors, they have the best chairs, they've all the gear, that's what gaming is, but there's also the mobile thing.

So it's every walk of life will have this experience, you wouldn't think of them as your typical gamer but they will engage with this kind of game and they do, they wouldn't call themselves a gamer but they do play these games. And I think that's what we aim for is to say, well, what is it that engages the non-gamer to play a game? It's something that is appealing to people who don't play games, it's something that'll engage them, it's something that they want to come back to and that they'll respond to it positively.

Kai Merriott: So you mentioned gamers with their five monitors and I think you're right, I mean, there's a real important distinction I think to be drawn here between what we do when we talk about gamified learning and the people who are obsessively gamers, or even just casual gamers but more of the console type gamers. I think ours seems to be more like the mobile games.

Johnny McMonagle: I think so. It has to be much more direct, it has to be for somebody who's never played a game, who's aware what a game is. They look at it, they can tell immediately how to play the game, they go, there's the start button. Once they start playing they don't want rule books, they don't want all that, they want to get in and start playing and so from the get-go it should be intuitive, and if it isn't intuitive, if it takes too much explaining, then it's not working. It has to be an immediate thing for people who are time-poor, for people who, as I said, aren't gamers, they want to look at it and go, I like the look of this, I want to press that play button and after I press that play button I want to keep clicking things, I know what I'm doing all the way to the end of the game.

Kai Merriott: Yeah. Let's talk a little bit about that, making it intuitive. Because again, probably showing my age, I remember the old days of you take home a game and it comes with a sort of novel-like instruction manual, I mean, they still does this now, right? There's a picture of a controller and there's 1,000 things around it telling you what each button does, but, I mean, we can't really do that in gamified learning, can we?

Johnny McMonagle: No and nor do we want to. It's like, we don't have the time, we're too busy in our lives, we have too many things going on. We have this training set aside we want to get there immediately and say like, if it's too complicated you're just going to disengage with it, if you don't automatically immediately know what you're going to do then I think we're failing, that's what we come into. The mobile version is a strip down to the bare element of, what is a game? And it is, does it look good? Does it look like something I want to play? Will I understand it? Am I daunted by it? Then it's not working, does it look like something I can dive into? Then it is work.

Kai Merriott: Yeah. I was thinking of Tetris actually and how much we all never had to learn Tetris.

Johnny McMonagle: That's it. From the second you saw it on screen you knew what to do and, yeah, no rule books, no help button, no nothing. You go, I know what to do, and within seconds you learn, oh, I didn't get that right, you hear the sound, we can all hear it in our memories, that sound, and you get the little endorphins when you get it right and there's the little positive thing. And you get that within moments of picking it up for the first time and that's the beauty of a game like Tetris. As you, I don't think that anyone ever read how to play Tetris, I'd say they are few and far between, so that's what we are aiming for is that immediacy.

Kai Merriott: Also, I think the simplicity of the gamification options. So if you think about what that means, well, we named a few already so for instance, you lose a life, you have three lives and you lose three and then you're kind of kicked out of the game, you could have what we call internally power bars which is health bars that go up and down as you go, whether you answer a question right or wrong, I mean, there's lots, lots, and lots and lots of different options. We also have branching which is another kind of a popular gaming thing that we do where if you get a question right then the story changes and it's different than if you get the question wrong and you go down a different path. So, so many options but we shouldn't use them all, should we?

Johnny McMonagle: No, because then I think we're overcomplicating. Use it if there's a reason for it, if it helps the narrative of that story we talked about then absolutely. And I like the branching one and it, again, harps back to the old adventure games even in the books, here's your choice, and whatever one you make you go off in a different direction and you're controlling that. You'll always come to the whatever conclusion, we make sure they come to the conclusion they have to, but having that choice is a great thing. But as you say, we don't have to throw all the whistles and bells there all the time but whatever helps the narrative is what we're aiming for.

Kai Merriott: So it's back to story again, isn't it? You choose it as it is.

Johnny McMonagle: I think it is always about the story.

Kai Merriott: Yeah. Because I think back to the course we did together and obviously, we were not going to name any particular client names, but we did one for the cybersecurity course we did, which was seen as being a game, everyone calls it a game, but it only really I think had one gamified option in there, maybe two. And I'm thinking of the one we did, it was a cybersecurity where it was all based around a 3D printing donut machine and you had four donuts I think and then if you answer a question wrong then you lose a donut and that was number one, and then number two was, I think there was a very small amount of branching in there. But even then it was just to show you a little different animation depending on whether you got it right or wrong.

Johnny McMonagle: And that was it, it was very multimedia-rich. It was music, it was bright engaging graphics, it was animation, it was sound effects. And they were all matching, the music suited the primary colors, even the sound effects of the good and bad results that all came together very well and it all sounded like it all belonged as part of the same product and that was a very successful one. And again, the story was you're starting at the start, I think you were getting parts or ingredients, and everywhere along the way there was somebody trying to foil you and your job was to make sure you foiled that hacker. It was about cybersecurity so we invented this character who was trying to stop you on your way and it had a little sound effect, little evil cackle, and stuff like that. And it was a very engaging little game, it was very short but it got the point across, it was all about cybersecurity and all that entails, and it feels very well received.

Kai Merriott: Yeah. I think it had one of the biggest take-ups of any training, not just gamified training but any training for that particular organization.

Johnny McMonagle: That's right. And a lot of that was just the fun of it and was immediately easy to play, you got immediately from the start you go, I like these graphics, I like that music, there's the play button. And I think we made a short intro animation to tell you this is what's going to happen, watch out for whatever we call the baddie and now go, learn this here, he'll try to trip you up on the way but go and answer these questions. And behind all that, it is just an e-learning quiz, but with all these things around it, it's so much more engaging. And it just showed there with the take-up as people were coming back to do it again and talking about it, comparing high scores would be the old way of doing it, but it worked just very well.

Kai Merriott: And I remember even though it was our training every time I went back to test the course during the production process I found myself getting drawn into it every time, I just kept playing it.

Johnny McMonagle: I think I've done that too. In the current one I'm working on we've come up with a new way if you win, a different little game piece for every successful thing. And as we're developing it I found myself playing the game because there's the little reward of the endorphins, the little positive sound, and something glows or sparkles every time you get it right. And then they're going, yeah, bear with me I'm just playing this game, and that shows that it's doing its job.

Kai Merriott: We touched upon earlier about, I think, particularly the cybersecurity one being a short game, because if you think again of gamers back to the five monitor guy, the games they play last for, I say not in one go but sometimes it is, 10, 20, 30 hours of gaming just in one game. We obviously can't get away with that, can we?

Johnny McMonagle: No. And I think no matter how good it is and how engaging it is, I think brevity is the key, I think less is more because the novelty will wear off. I think there's no set limit about how long it should be but I think if you have too much of a good thing too, yeah, kind of enthusiasm wins. And I think for us as contemporary workers we don't have that hour, so if we can do it in half an hour or 45 minutes and they've enjoyed that very much, that's better than dragging it out and turning it into a chore.

Kai Merriott: I think the key time is actually 20 minutes, but whether we actually achieve that, I don't know, that's the kind of the dream, the 20-minute game.

Johnny McMonagle: Yeah. I think 20 minutes is a perfect round number, I think any longer than that then you are pushing it. I know it depends on the content, it depends on the partner, but ideally we'd be trying to say, no, trust us on this, keep it around to 20 minutes and everyone will enjoy that bit a whole lot more.

Kai Merriott: And it's back to this - people being time poor, isn't it? Because games are seen as a bit of frivolity. And if we're saying to people, right, you're going to spend three hours on this game, well, I think you're right that they would get bored but also they just won't have the time.

Johnny McMonagle: Yeah. And touching on that, the gaming frivolity, is we have to sell this idea that gaming isn't a waste of time, it isn't a distraction, and maybe it goes back to teaching children that learn through play. And I think we never grow out of that, we do enjoy playing, we enjoy games, but it's not frivolous because actually, we are learning through this. And for employees, for staff and all that, it isn't a waste of time at all, it's like, you must do this training and you're going to enjoy it and that's a nice thing for everybody. If you're going to enjoy the training then everybody wins.

Kai Merriott: Yeah, absolutely. I think it seems to be not just in gamified learning but just in every kind of training that idea of people really not having much time trying to cut things down to the chase because this is not a university, they're not on three-year courses, they have 20 minutes to do a job and they need to learn how to do it quickly.

Johnny McMonagle: Yes, absolutely. I think we can all find in our daily working lives we can put aside 20 minutes and we can justify that 20 minutes and we will learn something. I think it's looking at the modern workplace as well, we have to take in consideration that we just don't have the time. So I think we can all agree we can make time for 20 minutes and that would be our optimum amount of time. And if we're not achieving that in 20 minutes then maybe we're not doing it right.

Kai Merriott: I think that's right. What I often do is when we look at the information that needs to be covered as part of this game, I try and sort of throw away everything that isn't related to the task in hand. I think that's true of e-learning in general, I think it's especially true of games that really should reflect the role that you're doing. So everything in that game should be practical knowledge that you can go away and do something with rather than something that's it's kind of just knowledge and awareness.

Johnny McMonagle: Yeah, that's right. I think it's always focused on what it is, is the goal of this game, what is the endpoint of the story we're telling, and don't try to be all things to all men, don't try and overload it and just keep it to a thing. If they need more information they can always go to different resources but for our games, we have to just focus on it, keep it very direct to the point, here's what you're taking away from this game, from this training. There are other ways of delivering information but with a game, we keep focused on what we need to tell, what we need to impart.

Kai Merriott: Yeah. So I think you did touch upon earlier about the kind of visual side of the game. So we talked about the music, the sound effects, and what about the visuals, the way it looks, how important is that to the game?

Johnny McMonagle: Well, I think that's extremely important obviously as a graphic designer. One thing it is again, it's the universal language off game, it is, what does game mean to you? What does it mean to me, to the seasoned gamer, to someone who never plays a game? I say, if you're walking through the office you look over your colleague's shoulder and there's something on that screen that looks engaging and fun and doesn't look like your stack e-learning, it doesn't look like there are two people in business suits shaking hands and a bit of text, next screen, here's two different people in business suits doing something.

And that's the kind of thing, it has to look better than that, it has to look, I say fun without saying frivolous, it has to be a lot more engaging. There has to be something that separates it from your usually learning and I think that could be elements on the screen where you've done something with the graphics, there's something different about it and it can be anything but it has to stand apart or other elements on the screen too like scoring or a meter or something like that where you're immediately going, what is that? So you know from a glance that's a game.

Kai Merriott: Yeah. I think having its own unique identity. I always think of games like Candy Crush which it's not a game I particularly play, I don't think it's really marketed to people like me, but it's got such an identity and the color scheme and the noises, going back to sound effects again, it all says, this is a game that even the sound effects and the colors are going to get you as high as the sugar from the candy.

Johnny McMonagle: Those endorphins again, it's that thing of going, yeah, I'm going to have fun playing this, it's going to put a smile on their face, I'm going to enjoy doing it. And that's again if you saw a picture of it, it doesn't even have to be a live version just a picture of it, you know that's a fun looking game, I'm going to enjoy spending time with this. And I think that's, yeah, we try to do that with our games, we try immediately to go, is this training? Because this looks like something fun.

Kai Merriott: Yeah. And again, I think the visuals go back to the story again and say, what is the story? The story is X or Y, and then from there, you can kind of come up with a brand identity. Because I was thinking about back to our cybersecurity game with the 3D printing donut which is a mad idea, and I think I seem to remember back in the early days, the brand that was suggested that was floated around was actually quite almost movie-like and a little bit subdued and probably wouldn't quite have fitted the idea. Do you remember it?

Johnny McMonagle: Yeah. I remember the brand in particular. Many partners they're very aware of their own brand and they want to see their own brand back at them with that, we kind of threw that through book out. We said, well, for this game you're going to get your loco and that's about it, we kind of rewrote it and they agreed that this was the way to go. Is that what you're referencing?

Kai Merriott: That's right. And I think it was what we decided because I think we both said that the original brand was quite subdued given that the idea was so mad. So we kind of went for a much more pastly almost and I think it was basically Simpsons inspired brand because of the donuts, I suppose.

Johnny McMonagle: Yeah, I think so. I think everyone now you see a donut with pink frosting on you think Homer Simpson, I think we all do. But that was a point, as we said, well, here's your color palette, blah, blah, blah, here and so on, but look at these visuals. And I think they came around very quickly and they said, no, this looks really nice, we get it, we're responding well to it so we don't need to stick with that. And they went for that mad idea, as you say, their brand palette didn't suit so it didn't take much convincing, it was a strong idea that worked.

Kai Merriott: Yeah. And it really did and that's a project I'm very proud of as well. So I was thinking again of, going back to the gaming options, we touched upon those before, we talked about lives, we talk about scoring, but of course, when you're kind of coming up with this brand identity in this game, you don't really use terms like lives and percentages in scoring you again, presume do you want to tie that back to the story.

Johnny McMonagle: Yeah, that's right. Because yeah, the use of lives and all it is going back to our arcade games but that was literally you had your three little characters and you lose a life. And then it depends on your story, that doesn't make sense for the stuff we've done, well, you're not actually losing a life. When we think, what are you gaining? What are you losing? And in that way then I say in global trade, we had a thing we said, well, if you go to a certain jurisdiction and you get this question right then your project goes ahead and you've done well.

If you get the question wrong in this particular jurisdiction, there's going to be consequences maybe that's your project is delayed or you've actually broken some global trade thing, you're going to face legal sanctions and we tie that into the real-life, that training, they need to know this but we've made it a game and we go, there is a big legal sign coming up going, you're in trouble, or we go, you've got this right, here's a little trophy, with a sound effect, a little glow, it all ties back to what you were saying.

Kai Merriott: Yeah. And like the lives turned into donuts, and another one we did quite recently was on agile at the agile process. So the original gaming option, if you like, was a meter that goes down, if it goes down to zero then you get kicked out of the game. Now, we didn't want to just call it a meter so we actually made it a race between two companies who were developing a very similar product. And so if you answer the questions correctly then the meter goes towards you and then if you answer incorrectly the meter goes towards the other company, the rival company.

Johnny McMonagle: Yeah. And that was a clever use of a very standard functionality of your progress bar basically telling you, yeah, you've answered these right and every time you do it goes up and increments up to the right or vertically and that's standard. But we say, well, how does it tie into our story? And then we had one for alcoholic spur company and we got the same idea, on the left you have a glass with nothing in it, on the right you have a glass that gets full every time you get something right. It's the same principle of the progress meter but dressed up for gaming and for gamification and that's a simple little thing you can do to tie in the game and make it relevant, make it suit the context. And people will react to it a lot better than you boring zero to 100 that they're so used to seeing and it just doesn't feel like a game, it just feels like standard learning.

Kai Merriott: It's that simplicity again.

Johnny McMonagle: Yeah. It's something that you can respond to immediately, you don't overthink it. You could see it a glance I know what's happening here and you want to get up to the right and you want to get up to the top of the screen, you know every time you're getting something right it's going up in increments and you're enjoying getting it there and it's your mission to get it there. And if you get it wrong, if it says retry, you're going, of course, I'll retry, I've enjoyed that, I really want to get that glassful or win that contract or whatever it is, that donut machine. It's an easy win but give it some thought, tie it into the design of the whole thing, and again, back to your story, how does this help sell the story?

Kai Merriott: Yeah, absolutely. Because we're not dealing with, going back to the five monitor guy, I like the five monitor guy that you came up with, going back to him, I mean, thousands and thousands of hours, millions of dollars spent on those sorts of games, it does not need to be complicated to be a game and I think we've proven that time and time again.

Johnny McMonagle: Yeah, I think it is. It just uses the fundamentals of what a game is that we can all respond to, that we can all relate to, we know immediately what it is, we recognize it when we see it, we know what it is when we are playing it, we respond to it, we know what we're doing and we enjoy it and we want to play it. We enjoy doing it so much that we'll play it again, we'll come back to it if we don't do well, we play until we win it.

Kai Merriott: And I was thinking of, if we were to create a game that absolutely breaks all the rules, so we were talking about things like we have a great story, we have really interactivity that kind of tells the story, it's nice and short, it has a really nice visual identity and it uses sound effects and music and, I want to say, in an appropriate way because we've talked a lot about the fun side of it, but actually it doesn't need to be fun, it can also be dramatic as well. But what would the worst gamified course you can think of look like do you think?

Johnny McMonagle: Well, yeah, getting all those things wrong or even that they don't match, that the visuals don't match the sound effects, that the sound effects sound like they're from a completely different product, that the music it sets completely the wrong tone, things like going, well, why I press something, something odd happens, why did that happen? What do I do next? If you get lost anywhere in the middle of it, if you have any doubt what you're doing, if you have to be reaching for the help button you're not doing it well, we haven't done our job well, if someone has to go, how do I play this again? Or I can't remember what I'm doing, what's the point of this? Then we haven't done our job, that's where the simplicity comes into. And all the elements have to work together or else it's jarring and it feels off and all those things would make it to me just a bad game experience, would be bad training but as a game it just wouldn't work.

Kai Merriott: Yeah. It seems that games are particularly unsympathetic when you get one element wrong. It's almost not too grand a point and it's almost like poetry where every word is absolutely key versus a novel where it doesn't matter if there's a few dodgy sentences in this, it's absolutely you find, but with games, everything has just to be perfectly in place.

Johnny McMonagle: Yeah, no, absolutely. It all has to work together cohesively and the wheat from the chaff is just saying it just should work. And all these, we talked about all the different building blocks, say, that go into it, they all have to just keep it simple, does this element work with that element and all put together, is it doing what we plan to do? Well, somebody just comes and sits down beside you, will they be able to play this and will they enjoy it? Will they respond to it the way we want them to? And if we get all those things right anyone should be able to do that.

Kai Merriott: Fabulous. I think we've basically covered everything that we need to cover today and I think we're running out of time anyway. So, Johnny, it's been great having you on the Principled Podcast, I hope you come back and speak with us again soon.

Johnny McMonagle: Thanks Kai.

Kai Merriott: Thank you all and thank you all for listening. My name is Kai Merriott, we'll see you on another episode of the Principled Podcast by LRN.

Outro: We hope you enjoyed this episode. The Principled Podcast is brought to you by LRN, at LRN our mission is to inspire principled performance in global organizations by helping them foster winning ethical cultures rooted in sustainable values. Please visit us at lrn.com to learn more and if you enjoyed this episode subscribe to our podcast on Apple Podcasts, Stitcher, Google Podcasts, or wherever you listen and don't forget to leave us a review.

S6E10 | Rules are good. Values are better.

Abstract:

Values have the power to guide behavior, shape culture, and strengthen businesses—empowering them to outperform. But what exactly does it mean to take a “values-based approach” to ethics and compliance? In this episode of the Principled Podcast, Emily Miner, Senior Ethics & Compliance Advisor, speaks with fellow LRN colleague Susan Divers, Director of Thought Leadership and Best Practices, about the difference between rules and values in the context of E&C. Listen in as the two discuss how companies can leverage core values to build effective ethics and compliance practices that drive better business outcomes.

 

Featured guest:

Susan Divers is a senior advisor with LRN Corporation. In that capacity, Ms. Divers brings her 30+ years’ accomplishments and experience in the ethics and compliance area to LRN partners and colleagues. This expertise includes building state-of-the-art compliance programs infused with values, designing user-friendly means of engaging and informing employees, fostering an embedded culture of compliance and substantial subject matter expertise in anti-corruption, export controls, sanctions, and other key areas of compliance.

Prior to joining LRN, Mrs. Divers served as AECOM’s Assistant General for Global Ethics & Compliance and Chief Ethics & Compliance Officer. Under her leadership, AECOM’s ethics and compliance program garnered six external awards in recognition of its effectiveness and Mrs. Divers’ thought leadership in the ethics field. In 2011, Mrs. Divers received the AECOM CEO Award of Excellence, which recognized her work in advancing the company’s ethics and compliance program.

Mrs. Divers’ background includes more than thirty years’ experience practicing law in these areas. Before joining AECOM, she worked at SAIC and Lockheed Martin in the international compliance area. Prior to that, she was a partner with the DC office of Sonnenschein, Nath & Rosenthal. She also spent four years in London and is qualified as a Solicitor to the High Court of England and Wales, practicing in the international arena with the law firms of Theodore Goddard & Co. and Herbert Smith & Co. She also served as an attorney in the Office of the Legal Advisor at the Department of State and was a member of the U.S. delegation to the UN working on the first anti-corruption multilateral treaty initiative. 

Mrs. Divers is a member of the DC Bar and a graduate of Trinity College, Washington D.C. and of the National Law Center of George Washington University. In 2011, 2012, 2013 and 2014 Ethisphere Magazine listed her as one the “Attorneys Who Matter” in the ethics & compliance area. She is a member of the Advisory Boards of the Rutgers University Center for Ethical Behavior and served as a member of the Board of Directors for the Institute for Practical Training from 2005-2008. 

She resides in Northern Virginia and is a frequent speaker, writer and commentator on ethics and compliance topics. Mrs. Divers’ most recent publication is “Balancing Best Practices and Reality in Compliance,” published by Compliance Week in February 2015. In her spare time, she mentors veteran and university students and enjoys outdoor activities.

 

Featured Host: 

Emily Miner is a Senior Advisor in LRN’s Ethics & Compliance Advisory practice. She counsels executive leadership teams on how to actively shape and manage their ethical culture through deep quantitative and qualitative understanding and engagement. A skilled facilitator, Emily emphasizes co-creative, bottom-up, and data-driven approaches to foster ethical behavior and inform program strategy. Emily has led engagements with organizations in the healthcare, technology, manufacturing, energy, professional services, and education industries. Emily co-leads LRN’s ongoing flagship research on E&C program effectiveness and is a thought leader in the areas of organizational culture, leadership, and E&C program impact. Prior to joining LRN, Emily applied her behavioral science expertise in the environmental sustainability sector, working with non-profits and several New England municipalities; facilitated earth science research in academia; and contributed to drafting and advancing international climate policy goals. Emily has a Master of Public Administration in Environmental Science and Policy from Columbia University and graduated summa cum laude from the University of Florida with a degree in Anthropology.

 

Transcript: 

Intro:   Welcome to the Principled Podcast, brought to you by LRN. The Principled Podcast brings together the collective wisdom on ethics, business and compliance, transformative stories of leadership and inspiring workplace culture. Listen in to discover valuable strategies from our community of business leaders and workplace changemakers.

Emily Miner:   Rules are good, but values are better. Values have the power to guide behavior, shape culture and strengthen businesses, empowering them to outperform. But, what exactly does it mean to take a values-based approach to ethics and compliance?

Hello, and welcome to another episode of LRN's Principled Podcast. I'm your host, Emily Miner, senior ethics and compliance advisor. Today, I'm joined by my colleague Susan Divers, director of thought leadership and best practices. We're going to be talking about how companies can leverage core values to build effective ethics and compliance practices that drive better business outcomes.

Susan brings more than 30 years experience in both the legal and ENC spaces to this topic area. With subject matter expertise in anti-corruption, export controls, sanctions and other key areas of compliance.

Susan, thanks for joining me on the Principled Podcast.

Susan Divers:  It's my pleasure, Emily. It's always so nice to talk to you.

Emily Miner:   Yeah. So Susan, your background has given you a unique perspective on this topic of rules versus values. You're a former chief ethics and compliance officer, a member of the DC bar and you're a qualified solicitor to the High Court of England and Wales.

Having sat on both the legal and ethics and compliance sides of the table, can you break down the idea of rules are good, values are better for our listeners? What does that really mean? What are values and why are they "better?"

Susan Divers:  Well, that's a great place to start, Emily. There are a couple of really key points to make in this area.

The first is that it's not an either or choice. It's not like you have values but you don't have rules, and you should never have rules without values. One way to think about it is that rules provide the structure for an organization in its compliance area, but values provide the motivation and are what actually lead people to do the right thing, even if it's not required.

Values are positive and aspirational. If, in our dealings with each other, we think about treating each other with respect, then there's not a rule for every occasion where we interact but there is a value, which is respect. Even if I disagree with you or you disagree with me, we're going to accord each other that basic respect.

It's a really fundamental difference. Another way to think about it that I like as an analogy is that rules are the skeleton, if you will, but values are the blood and the heart in our own natural systems. So, why are values better? Values ask people to live their values, in a sense, and make them real. They ask people to consider much more than whether they're breaking a rule or going to break a law, because that's a pretty minimal standard. When you do that, you're encouraging people to do the minimum, but we can talk about that a little bit later.

Does that make sense?

Emily Miner:   Yeah, it does. Maybe to put it another way too, what I'm hearing from you, rules are what you can and can't do, whereas values might be what you should and shouldn't do, so to your point about there not being a rule for every occasion. Although, I do appreciate your skeleton analogy, as we're coming into the Halloween season, so apropos.

Susan Divers:  Great.

Emily Miner:  Following up on that, can you share some real world examples where you've seen this, as you put it, it's not an either or, it's a both and, but where you've seen the rules are good, values are better premise play out?

Susan Divers:  Sure. Well, I'm going to start with actually a family example and then give one or two corporation, organization examples.

When I talk about this in front of compliance conferences and all, I usually ask people in the audience to raise their hand if they've ever raised teenagers and a large number of people do. To just take that example, if you say to teenagers, "You can't do this. You can't have people over if we're not home. You can't have an unauthorized party. You can't do this, you can't do that," it tends to sound like blah, blah, blah. And then, they think about ways to get around that, in my experience.

But if you say to them, "This is our family and we're all in this together. We all depend on each other's behavior to make it work. If you do things behind our back that could trigger bad consequences for all of us, that affects the family as a whole. And, it also means we can't trust you. We're asking you not to do these risky things." That's a much more motivating and respectful way to approach it.

In companies and organizations, approaching people with respect and saying, "The rules are there as guidance, but we don't want you to meet the minimum. We want you to think of the organization as a whole, and to think of our brand and what we're trying to do, our mission and our purpose, and tailor your behavior to that. Not to arguing about whether it's not okay to spend $1000 a person on an elaborate dinner but it is okay to spend $1000 on an elaborate golf outing." It's really a very profound difference in focus.

Emily Miner:   Yeah. That idea of leading with your values and that being a demonstration of respect and an extension of trust to employees, I think is really powerful.

As you know, a lot of my work at LRN centers around understanding organizational culture and what motivates employee behavior. When I have conversations, focus groups and interviews with people in our client-partner walls, that's such a big theme, always. This idea of feeling respected and feeling trusted, "Treat me like an adult," so going back to your example of the teenagers. Just being real and talking about it openly, there's no smoke and mirrors behind it.

Yeah. Thanks for sharing that. Good tips as well, for when my children become teenagers.

Susan Divers:  Yeah, fasten your seatbelt.

Emily Miner:   Yeah. We're talking about ethics and compliance. The global regulators are obviously key stakeholders in the design and implementation of an ethics and compliance program. Regulators being the ones that set out the policy requirements, IE the rules for organizations. But, we're seeing now that regulators around the world are also talking about the "culture of compliance," to quote the Department of Justice, and they're talking about the role of values. Which is really a shift from the language that was used, even just a few years ago.

When did you notice that shift? And, what do you think catalyzed it?

Susan Divers:  It definitely started happening as early as 2012. I think it was Mary Jo White, when she was the Chairwoman of the SEC, gave a speech and she said, "You have to focus on your culture." That was shocking at the time, because up to that point ... There's some very interesting things written in this area. There's a BSR white paper from 2017, for example, that talks about how, up until around then, compliance and ethics had been criminalized in the sense that there was a criminal justice approach. "This is the rule, you can't break it. If you do, you can go to jail and get fired."

Okay, but that doesn't encourage me to do the right thing, if there's no rule. Or, to err on the side of doing the right thing, even if it's legitimately gray. And as I mentioned before, it encourages gaming the system, arguing, "Well, I didn't actually breach that rule. My behavior may have been bad, it may have been terrible even, but it didn't actually breach a rule so you can't do anything to me."

So regulators finally caught up with that idea, because even though Sarbanes-Oxley, which was put in place after the Enron scandal largely, and other very detailed laws ... I think Sarbanes-Oxley, I saw somewhere, weighs 30 pounds if you put it all in one place, in terms of printed pages.

Emily Miner:  Wow.

Susan Divers:  Yeah, it's kind of scary. Sarbanes-Oxley didn't really change behavior. We then had the financial crisis and regulators started realizing that the answer to better behavior, preventing misconduct and generally being more effective might not be just layering on more rules and more rules. Ethics and compliance officers realized that the more effective approach might not be always getting up and screaming about penalties and all the bad things that could happen.

But again, taking a much more positive approach and saying, again, "We're all in this together. We're going to trust you to do the right thing, even if it costs you and the company an opportunity. We're not going to rely strictly on your having to look up pages and pages of complex policies to try to figure out what you're actually supposed to do. We're going to encourage you to seek guidance, and we're going to have a welcoming attitude towards questions. We're not going to say, 'What did you do, why are you asking that?'"

As a former senior executive at AECOM once put it, it's a shift from being a cop to a coach.

Emily Miner:   I love that, a cop to a coach. One of the other trends or shifts in the regulator space has been around accessibility. I'm coming back to that, in listening to what you were just saying, because values, when shared and understood across an organization, allow for a more simplified, accessible approach to how we govern our behavior. To your point, not having to look up pages and pages, and parse out whether this crosses that line versus this other line. But really, just more fundamentally, is this aligned with who we are, what we believe in, what we stand for, so it's a powerful tool from an accessibility and simplification standpoint, too.

Susan Divers:  Yeah. It's your North Star. It's a lot easier to look up and see the North Star than it is to read a policy on Foreign Corrupt Practices Act.

Emily Miner:  You mentioned AECOM. You were in-house for a long time, as a chief ethics and compliance officer, starting up two ethics and compliance programs including at AECOM. Were you always oriented towards this idea of rules and values? Or, were there certain experiences in your professional career, or your personal life with your teenage sons, that impressed upon you the value, the benefit of a values-based approach?

Susan Divers:  Well, I was really lucky when I started at AECOM because I had amazing colleagues. It was a perfect storm of goodness. The head of corporate communications, who later went on to win every imaginable award including having his picture up in Times Square because he won the Arthur Page Award. And then, the head of internal audit who came on, the three of us really worked together. We quickly got it, that making good ethics part of our brand and our mission was very feasible at AECOM. Our mission was to enhance the world's natural built and social environments in which we operate, and that was back in the early 2000s before people were even thinking about ESG.

The company really lived up to that. They did a lot of very creative and very far-seeing work on a pro bono basis of what does a sustainable look like. We said, rather than, again, make this the cop shop, let's make it part and parcel of what we do. We did, in terms of communication and in terms of the way we ran the program. And then as a result, we won, unexpectedly, World's Most Ethical Company on our first year of trying. I think we got it five years thereafter. That became part of our brand. We had a little toolkit that you could put into a bid, an RFP response, that said, "This is what we've won and this is what our program looks like," and we really walked the walk as well as talked the talk.

That really resonated at AECOM, people liked that. And we had a great ethics and compliance web page, if I do say so myself. It was interactive, it was engaging, it was kind of fun. We'd have quizzes, we'd do profiles of people who did the right thing, even if was difficult. That kind of momentum tends to breed more momentum in that direction. Occasionally, I found myself talking people out of abandoning a bid or something. I'd say, "Well, there's a way to mitigate that risk effectively."

That was a nice place to be. It really was a good illustration of how values can be the life, and the blood and the heart of an organization's program.

Emily Miner:   Yeah. Thank you for sharing that. I think, just when you were talking about the ethics and compliance web page and the interactivity, and quizzes and stories, those are all such powerful engagement techniques. You're right, it's catalytic, where there's a spark and then it leads more rippled effect, if you will. People want to be highlighted for doing the right thing. How great to say, "My company is globally recognized as one of the most ethical companies. I've got to make sure that I help us live up to that standard." Thank you for those specific examples.

Getting into specific examples, we encourage our client partners to take a values-based approach to ethics and compliance. What are some of the other ways that that looks like in practice?

Susan Divers:  As you know, every year we publish a Program Effectiveness Report, which is really our flagship piece of research every year. Last year, we highlighted stories of companies really using values to keep it together during the pandemic crisis that unfolded last year. The stories are very inspiring. I'd urge everyone listening to go download our most recent Program Effectiveness Report 2021 off our website.

But, one in particular really struck me and that was Braskem. Wherein they needed to keep plants operating in order to keep the electrical grid in the United States healthy and fully operating. There's no law or rule in the world that would allow you to compel employees in those circumstances to self-isolate at a plant for 30 days at a time. But, what they did is ask employees if they would do that and people volunteered. They went and slept, ate at the plants, for 30 days at a time. Of course, the company paid them extra and ensured that they had facilities, and lodging and food.

But, they're very proud of that experience and it was something that brought the company together. And again, just as we were talking about AECOM, people were proud of the fact that they had an ethical company. At Braskem, the same thing happened. There wasn't a rule that says, "You must do this," because then people would have resisted it, most likely. But, it was a value that this is what we do, this is consistent with our mission and this is consistent with doing the right thing by the social environments in which we operate in our communities. It's really a great example.

I could go on and on, there are many other examples, too. But generally, during the pandemic people really rose to the occasion. Used values such as making programs much more people centered. In the past, it's part of the legacy of a very legalistic approach, programs have been way too legalistic. There's not been that much regard for the impact on people, or as you were talking about, simplicity.

So for example, Dell moved big chunk of its program onto our Catalyst app and is even moving more onto Catalyst app because employees had limited bandwidth. They needed to be able to take training, if they were standing in a grocery line with a mask on, rather than be chained to a desktop.

Again, it's the most powerful way to really motivate people and to change behavior for the better.

Emily Miner:   Yeah. The Braskem example, it's so inspiring. I know that there are so many other examples out there, of organizations and people that really rose to the occasion and demonstrated the best of humanity as the COVID crisis was first unfolding, and still today.

You also talked about our flagship research. I think we can probably put a link to the report in this podcast page so that people can access it. But, as director of thought leadership for advisory, you lead this research and have for many years. What does the data tell us about the prevalence of values, or values orientation, or values-based approach in ethics and compliance, or the impact of such an orientation?

Susan Divers:  Good question and that's something we look at every year as you know, Emily. What it shows is that the most effective programs, there's a very strong correlation between having an effective ethics and compliance program and being values-based, it just works better. If you look at our report, and we ask questions about organizational justice, which is just a key plank of having an effective ethics and compliance program, having a values-based approach is just much more effective than relying simply on rules.

It's also, as we've talked about, much more consistent with the epiphany that regulators had, I guess almost 10 years ago, where they realized that the regulation heavy approach had its limitations. We see this all the time in our research, that a values-based approach simply works better.

Emily Miner:   Yeah. I think one of the data points that was really compelling for me in our research that we did this year was how the percentage of organizations who said that they relied on their values to help them navigate the COVID crisis. I don't know that I was necessarily expecting it to be such an overwhelming percentage. It was incredibly gratifying to see that.

I think it's one of those situations where we could have all gone in one direction or another, and it's really encouraging that so many organizations, COVID has been a catalyst for them to really connect more deeply with their values. I know that you've already talked about how it seems as if this is shaping how ethics and compliance programs are evolving, beyond just the crisis response. But really, what is a new normal moving forward, such as the example of Dell bringing so much of their program onto a mobile app. That way, it's accessible to employees any time, anywhere.

Susan Divers:  Yeah. And interestingly, I just looked at our report last year, and 79% of all of our respondents, who were about 600 respondents worldwide, said that their ethical culture got stronger as a result of their response to the pandemic. I don't think we're respecting that really, but it's very encouraging and very heartening because people came together and helped each other through the crisis. Our data shows that boards rose to the occasion, senior leaders rose to the occasion and largely, managers rose to the occasion.

And again, it was an effort to pull together and help each other. It's really an inspiring story.

Emily Miner:   Yeah, absolutely. So Susan, for our listeners who might be just starting to build out an ethics and compliance function in their organizations, what key steps would you recommend they take to ensure their program leads with core values? What's square one?

Susan Divers:  Well, square one is to realize that you can do it, that it's not an either or choice.

I think the first thing is to avoid what I would call blind benchmarking, where a lot of times, I think people when they start out, they want a compliance program in a box, so that means a checklist. The regulators are pretty adamant that that's the wrong approach because every company has different needs and different risks. You can be small and high risk, you can be large and be relatively low risk. You can have data privacy risks but other companies don't. You can have corruption risks but other companies don't.

So what you need to do first start with your risks. And then say, "Okay, what are the values-based approaches we can take to mitigate those risks?" And then, you still have your infrastructure but you gear your training towards encouraging people to act with integrity in every circumstance that they encounter. We recommend, in our policy simplification work, that you make that very explicit, very simple. You can say, "We act with integrity everywhere, every time, in every circumstance."

Instead of parsing through to see if you can offer a grease payment to jump the queue at customs, you rely on that principle. And that actually is easier for new programs, in some ways. Because if you get that right, you've got a really good basis to build on. And then, you incorporate those values in the infrastructure that you build out, whether it's communications, whether it's training, and even audit and assurance can be infused with values as well as policies.

So you're starting from the right place, you're not building up some elaborate scaffolding. I saw one of the airlines bragging about a five page rule book, but they're also the airline that's had major scandals with people following procedures blindly and dragging people off of airplanes. So get it right from the very beginning and first, you'll be more effective. And then secondly, you'll save yourself a lot of grief down the line.

Emily Miner:   Yeah, absolutely. It's a gift, in some sense. Maybe this is a tougher question. For those organizations that have more mature ethics and compliance programs, that might already have that scaffolding in place, what steps should they think? Or, what would you recommend they take to keep their program on the right track and centering their values?

Susan Divers:  Well, to go back to the old maxim, "What gets measured, gets done," and really looking at your ethical culture. You just can't leave it on autopilot. You can't leave your risk analysis on autopilot, either. Your ethical culture and your risks are very inter-related.

So spend time, of course, you work in that area and I do too, to some degree, of looking at ethical culture and saying, "What are the levels of trust and respect in the various business units or areas of the world? Are there hot spots? Are there places where there are lagging indicators that we can delve deeper into and really understand what some of the dynamics are?" Places where organizational justice isn't strong or retaliation is high. You have to spend time on it. It's like watering the roots of the plant.

And then, you have to be willing to really talk about values. Again, a lot of companies, they get it right in the code of conduct. And, they put the code of conduct out there but they don't really talk about values. I know you did some work a couple of years ago in this area, with a values jam for the UN Global Compact, which was able to be done online. People appreciate that. People across the company like it when they're asked meaningful questions about values and whether the company's living up to that. I think that's absolutely fundamental to keeping it going, and keeping it real and keeping it alive.

Emily Miner:   Yeah. It creates more ownership too, when people are involved in the process and their perspective is invited, or their invited to share their perspective. So that it's not this top down talking point mandate, but really is something that is discussed and explored at all levels of the organization.

Susan Divers:  I couldn't agree more.

Emily Miner:   Well, Susan, it is always such a pleasure to talk to you about these topics. Thank you for joining me on this episode.

Susan Divers:  It was my pleasure, Emily. I feel the same way, it's always nice for us to get a chance to talk about important issues.

Emily Miner:   To all of you listening, thank you. My name is Emily Miner and we will see you next time on the Principled Podcast by LRN.

Outro:  We hope you enjoyed this episode. The Principled Podcast is brought to you by LRN. At LRN, our mission is to inspire principled performance in global organizations by helping them foster winning ethical cultures rooted in sustainable values. Please visit us at lrn.com to learn more. And, if you enjoyed this episode, subscribe to our podcast on Apple Podcasts, Stitcher, Google Podcasts or wherever you listen. And, don't forget to leave us a review.

 

S6E9 | How can we heal community-police relationships?

Abstract:

What work is being done to heal the community-police relationship? What role can E&C training play to help foster that collaboration? In this episode of the Principled Podcast, host Katy Brennan, ‪Advisory Thought Leadership & Strategy Lead at LRN, explores what building a healthy, scalable, community policing model looks like with Nadine Jones, Co-Founder of The Initiative: Advancing the Blue & Black Partnership and Vice President, Corporate Counsel at Kuehne+Nagel Group. Listen in as the two discuss how The Initiative works to end systemic police violence and heal the relationship between law enforcement and the public—and ultimately build healthier communities.

 

Featured guest:

Nadine Jones is a graduate of Howard University School of Law and a seasoned Vice President of a multibillion global logistics company. She is a collaborative leader, solutions-oriented, and has expertise in developing and maintaining a corporate ethics & compliance program for a multi-billion logistics company. As a graduate of Howard University School of Law, Nadine also has a strong sense of social justice and equity. In June 2020, she co-founded along with two other Howard Law alumni an organization called The Initiative: Advancing the Blue & Black Partnership (“The Initiative”). The Initiative was established to end systemic police violence and implement a collaborative approach to building healthy, scalable, community policing models.

 

Featured Host: 

Katy leads thought leadership for LRN, having spent more than 15 years at the intersection of business’ responsibility to society. Katy is responsible for the development of a thought leadership agenda and roadmap and manages alliances with key stakeholders for LRN.  She also co-leads LRN’s Living HOW Council, a cross-functional group of diverse voices across the company who ensure LRN’s philosophy, values and Leadership Framework help inform and guide all aspects of our business. 

 

 

S6E8 | Why the evolution of global companies depends on corporate and nonprofit boards

Abstract:

How are expectations of global companies changing? How do leaders from the non-profit world contribute to corporate boards—and what can companies learn from directors who come from that sector? In this episode of the Principled Podcast, host and LRN Special Advisor is joined by Helene Gayle, the President and CEO of the Chicago Community Trust. The two discuss how board directors can continue to evolve and improve their oversight of and engagement in corporate culture. Listen in as David and Helene explore the similarities and differences between corporate and non-profit boards, and how global companies are faring throughout the pandemic.

 

Featured guest:

Dr. Gayle has been president and CEO of The Chicago Community Trust, one of the nation’s oldest and largest community foundations, since October 2017. Under her leadership, the Trust has adopted a new strategic focus on closing the racial and ethnic wealth gap in the Chicago region.

For almost a decade, Dr. Gayle was president and CEO of CARE, a leading international humanitarian organization. An expert on global development, humanitarian and health issues, she spent 20 years with the Centers for Disease Control, working primarily on HIV/AIDS. She worked at the Bill & Melinda Gates Foundation, directing programs on HIV/AIDS and other global health issues.

Dr. Gayle was born and raised in Buffalo, NY. She earned a B.A. in psychology at Barnard College, an M.D. at the University of Pennsylvania and an M.P.H. at Johns Hopkins University. She has received 18 honorary degrees and holds faculty appointments at the University of Washington and Emory University. She serves on public company and nonprofit boards, including The Coca-Cola Company, Organon, Palo Alto Networks, Brookings Institution, Center for Strategic and International Studies, New America, ONE Campaign, Federal Reserve Bank of Chicago, and Economic Club of Chicago. She is a member of the American Academy of Arts and Sciences, Council on Foreign Relations, American Public Health Association, National Academy of Medicine, National Medical Association, and American Academy of Pediatrics. She has authored numerous articles on global and domestic public health issues, poverty alleviation, gender equality, and social justice.

Featured Host: 

David Greenberg serves as Chair of the Governance and Risk Assessment Committee and a member of the Audit Committee of International Seaways (NYSE: INSW), one of the largest global crude oil and petroleum tanker companies.  Mr. Greenberg’s previous board experience (2006 to 2016) was as the independent director – and member of both the Audit and Compensation Committees --of APCO Worldwide, a private communications and government affairs consultancy and as a director (2013 to 2016) of Clean Tech Group, which creates opportunities for industrial companies to invest in innovative, clean technology.  He also served for 5 years as Chairman of the Board of Trustees of The Keystone Center, a Colorado non-profit that brings together oil, chemical and pharmaceutical companies with leading NGOs to find solutions to complex public policy challenges at the federal and state levels.

Greenberg is currently Managing Director of Cortina Partners LLC, a private equity firm that owns companies in the air medical, addiction treatment, bedding, textile and outdoor recreation industries and is CEO of Acqua Recovery, a residential drug and alcohol addiction center.  He also advises boards and executive teams on strategy, compliance, leadership and culture as a Special Advisor for LRN Corporation, and from 2008 through the end of 2016 was a member of LRN’s Executive Committee. For 20 years prior to 2008, Mr. Greenberg served in various senior positions overseeing government affairs, corporate affairs, communications and strategy at Altria Group, Inc. – then the parent company of Philip Morris USA, Philip Morris International, Kraft Foods and Miller Brewing – culminating in his role as Senior Vice President, Chief Compliance Officer and a member of the Executive Committee.  As one of five senior vice presidents of the corporation, he served on the Management Committee, which oversaw all strategy and company operations.  He was also a principal architect of the company’s very successful efforts to end the ‘tobacco wars’ which threatened the company’s very existence.  Earlier in his career, Mr. Greenberg was a partner in the Washington D.C. law firm of Arnold & Porter and also served as Legislative Director and General Counsel of the Consumer Federation of America.  He attended Williams College and has JD/MBA degrees from the University of Chicago. 

Greenberg has testified before the U.S. Congress, the European Union, the Israeli Knesset and other governmental bodies over two dozen times and has appeared on ABC Nightline, the CBS Morning News, BBC Morning, and the PBS News Hour, and has spoken at leading events for CEOs and boards.

S6E7 | Yes, you can measure ethical culture

Abstract:

How do you measure ethical culture? And how do those measurements influence business outcomes? In this episode of the Principled Podcast, Ethics & Compliance Advisor Arieana Thompson talks with her colleague Emily Miner, Senior Ethics & Compliance Advisor, about the 2021 LRN Benchmark of Ethical Culture—a new study from LRN that will be released in the coming weeks. In this global benchmark survey of 8,000+ employees at corporations around the world, LRN examines the underpinnings of corporate culture and its influence on employee perceptions and performance. Listen in as Arieana and Emily explore how ethical culture doesn’t just protect business assets and reputation; but also propels the bottom line.

 

Featured guest:

Emily Miner is a Senior Advisor in LRN’s Ethics & Compliance Advisory practice. She counsels executive leadership teams on how to actively shape and manage their ethical culture through deep quantitative and qualitative understanding and engagement. A skilled facilitator, Emily emphasizes co-creative, bottom-up, and data-driven approaches to foster ethical behavior and inform program strategy. Emily has led engagements with organizations in the healthcare, technology, manufacturing, energy, professional services, and education industries. Emily co-leads LRN’s ongoing flagship research on E&C program effectiveness and is a thought leader in the areas of organizational culture, leadership, and E&C program impact. Prior to joining LRN, Emily applied her behavioral science expertise in the environmental sustainability sector, working with non-profits and several New England municipalities; facilitated earth science research in academia; and contributed to drafting and advancing international climate policy goals. Emily has a Master of Public Administration in Environmental Science and Policy from Columbia University and graduated summa cum laude from the University of Florida with a degree in Anthropology.

 

Featured Host: 

Dr. Arieana Thompson believes in transforming the modern-day workplace through thought-provoking, evidence-based insights.

Arieana is a subject matter expert in executive leadership, succession management, ethics and compliance (E&C), wellness cultures, and employee development. Arieana has experience advising in external and internal capacities and professional speaking. Arieana offers professional and wellness coaching, helping leaders and individuals to harness natural strengths and reduce stress.

As a scientist-practitioner, Arieana actively researches and publishes employee well-being, organizational culture, and leadership thought-pieces in both industry and peer-reviewed academic journals (see links in the "Featured" section below). These publications enable executives to create and sustain values-led, profitable, and creative companies.