When Your CEO Just Does Not Get It
There are a lot of talented CEOs. Some remarkable leaders, innovators and eloquent spokespeople for their companies. In several recent experiences, I have been befuddled by some CEOs.
When a CEO addresses a global ethics and compliance staff or has the opportunity to address a large staff or division meeting, the CEO should take the opportunity to reinforce the company’s culture and compliance program message. CEOs spend a lot of time speaking to groups, meeting with stakeholders and representing the company.
What happens, however, when a CEO misses the mark in explaining a company’s ethics and compliance program. Too often I hear about CEOs who will make statements about the importance of ethics and compliance by narrowly defining the purpose of an ethics and compliance program.
What do I mean by this? As an example, a CEO who explains to a company group that the purpose of an ethics and compliance staff is “to keep the company compliant.”
I am not being nitpicky here – the CEO has missed the point – the purpose of a company’s ethics and compliance program is to promote the company’s culture and ensure compliance with the laws and the company’s code of conduct. There is a big difference between the two statements. A CEO who defines an ethics and compliance program as narrowly focused on compliance with the laws is selling the company short, including its compliance staff.
The questions are: who is responsible for these misstatements? And what are the implications of such a viewpoint?
It is very easy to blame the CEO. Of course, every CEO in knows about the importance of corporate culture and should be aware of the role of ethics and compliance programs in promoting such culture. CEO’s also should be aware of the importance of a company’s culture to a company’s financial sustainability and overall performance. Given this state of the business world, how could a CEO ignore the connection between compliance and a company’s culture?
A chief compliance officer has an important task (of many) and that is to educate the company’s board and senior leadership. A key part of this education and training is the importance of a company’s culture and its overall compliance with the law.
If a CCO fails to correct the CEO (which can be done delicately), the CCO has to bear some responsibility, unless the CEO somehow ignores the message and the CCO’s education efforts. A CCO has to take stock of what a CEO knows and what a CEO does not know. The CCO has a job which is to fill in the educational gaps.
A CCO cannot ignore this responsibility. The importance of educating the CEO so that the CEO understands the role of ethics and compliance is critical. A CCO depends on the CEO for support and resources – if the CEO does not understand the linkage of all of these issues, then the CCO has to redouble his or her efforts.
A CEO who speaks to stakeholders, leads a company and its employees and fails to accurately articulate the message behind compliance, is a leader who is suffering from a serious blinding of vision. A CEO who is riddled with missed opportunities, in the end, will be a leader who does not achieve his or her full potential. CEOs have to understand and commit themselves to a company’s culture – a company’s performance (and possibly its future) may depend on it.