We all have heard the problem: Employees want to report their concerns directly to their immediate supervisors (unless the problem relates to the immediate supervisor); Mid-level managers complain that they do not know how to handle employee concerns. Thus, we have reached the fundamental disconnect in the corporate gestalt.

Chief Compliance Officers need to focus on this disconnect. How do they do so?

First, they have to acknowledge the problem, explain it to others and get buy-in from compliance constituents. Assuming everyone is willing to acknowledge the existence of the disconnect, the problem can be addressed. In fact, it can be done so and with immediate and positive results.

Second, CCOs have to recognize that employees follow the lead of their direct supervisors or managers. A company’s ethical tone is really set by these supervisors or managers.

The key to addressing the disconnect is targeted training. A training program has to be developed that gives mid-level managers the tools they need to act in response to employee concerns while underscoring the importance of their individual commitment to ethics and compliance.

This program has to be practical and useful to address employee concerns as they may arise. The message has to be delivered using real-life scenarios that are likely to develop in the company.

The focus of the training program is not on why the manager has to comply with ethics and compliance issues but on the manager’s important role in responding to employee concerns in helping the company to promote its ethical culture. That is an important distinction.

The issues that have to be address in such a training program include:

• How to communicate an ethical tone to employees and promote an ethical culture;
• How to incorporate ethics in business decisions
• How to encourage employees to speak up and report matters directly to the supervisor
• How to handle employee concerns or reports of misconduct
• How to ensure that employees who report concerns are not retaliated against and feel comfortable to raise concerns

Training for mid-level and lower-level managers on this important set of issues is vital for a company committed to an ethical culture.

New supervisors should be required to complete such training when assuming their new management position. The training should be renewed every two years. A manager should be tested on the content of the training program. Completion of the training should be required as part of any evaluation.

To reinforce the message, managers have to be given an ethics toolkit – a collection of examples and guidance for dealing with typical employee concerns. The toolkit should include speaking guidelines, sample messages and outlines on how to address specific issues.

CCOs should offer additional materials through intranet portals for responding to employee concerns and ensuring that employees are comfortable in reporting misconduct by other employees.

A CCO has to monitor this important training program and provide other training programs to support managers who face these issues. It is training for the frontline – where the issues are real and the consequences can be significant. If properly designed and maintained, a CCO should see dramatic improvements in employee concerns and reporting of misconduct.