2023 World’s Most Ethical Companies

Ethisphere is back with their annual pulse check for ethical companies – help spread the word.

According to Ethisphere’s Ethics Index, the listed 2022 World’s Most Ethical
Companies honorees outperformed a comparable index of large cap companies
by 24.6 percentage points from January 2017 to January 2022.

Last chance to respond to the Governance & Innovation – Call for Evidence

The IoD Centre for Corporate Governance is running a Public Inquiry: Governance & Innovation – Call for evidence – the deadline is the 31st of August 2022 and I encourage you to have your say. To get you thinking, here are a couple of my answers to their timely questions around regulation.

Apart from rules and codes. are there any actions regulators and policy makers could take to encourage innovation?

Policy makers and regulators alike should recognise that the answer to every ethical failure isn’t more regulation but better regulation – well drafted, evidence based, proportionate and outcome based.  And, the focus of regulation should pivot to encouraging both the regulators themselves and the businesses they regulate to focus on developing a culture that supports innovation, which is the same thing as saying a healthy (ethical) culture.

The UK Corporate Governance Code and the Wates Principles highlight the role of the Board in terms of purpose, culture and strategy and the alignment of these.  This is an important step in the right direction when it comes to encouraging purpose-driven innovation. But it means that Boards must understand the culture of their organisations and the actual values that motivate people to act as they do. Key elements to support innovation are a focus on values  and purpose, a psychologically safe environment supported by the use of cultural measuring tools such as Barrett Analytics to assess culture (which they are required to do in one way or another).  In this way the Board will know whether the culture is evolving the attributes it needs to  support innovation and when behaviours are creeping in that may stifle it.

Ethical Business Regulation[RS1]  calls for regulators to have a variety of possible interventions to encourage and support business rather than simply enforcing against them when they fail. Traditional compliance and enforcement will stifle innovation by discouraging risk taking and incentivising people to be less than candid about the elements of failures. Based our experience and research, the approach outlined in Ethical Business Regulation would create a more trusting relationship – and support businesses to take the risks necessary to innovate.  In the event of a mistake or failure,  their ability to provide evidence that they were striving to nurture a healthy ethical culture should influence the choice of regulatory intervention. A culture where people are more likely to be open about mistakes and failures and learn from them is crucial. A psychologically safe environment in other words, is one where innovation can thrive.

It is a mistake to think that an innovative culture is somehow different than an ethical culture or a healthy culture or a safety culture for that matter. These characteristics are all created by the same things: conscious culture management, ethical decision-making and behaviour based on authentic values, linked to purpose and nurtured by skilled leadership who embody these values. It is not only about the board having oversight on “what innovative activity” is going on in a vacuum. The board itself and the management must be creating and supporting the type of culture mentioned above – one where employees can make mistakes and even fail, so long as they can openly admit their mistakes and do proper root cause analyses to understand what went wrong and learn.

It is often the board and management that behave in such a way – blaming and criticising rather than encouraging learning and being curious – that stifles innovation. Of course, intentional unethical or illegal activity should be dealt with accordingly – hence the description, “just” culture. 

Those are my thoughts on just one of the many great questions in the Public Inquiry: Governance & Innovation – Call for evidence. What are yours? Be sure to submit your response to the before the 31st of August 2022.

P.S. For reference, below some further thoughts that help illustrate elements needed to align purpose and values to a both innovative and ethical culture. Download: Ethical Business Practice & Regulation – A new paradigm for business and regulation – and for those who want to dive even deeper, specifically Chapter 9 of the book which is titled The Status of Corporate Governance, and within that there is a section entitled The Mirage of Maximising Shareholder Value and also a section called Can Corporate structures Impede Ethical Behaviour, which discusses Colin Mayer’s views in this context and in turn there is a section that is somewhat self-explanatory / auto-intuitive: Ethical Structures Tend to Be Open and Flat.

Last but not least – the subtitle of Amy Edmondson’s useful book The Fearless Organisation is: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth.

#EthicalBusinessPractice - Cultural and Leadership Framework 1200px GIF - Read more in Ethical Business Practice and Regulation: A Behavioural and Values-Based Approach to Compliance and Enforcement, by Hodges and Steinholtz, Bloomsbury Professional Publishing.
#EthicalBusinessPractice – Cultural and Leadership Framework 1200px GIF – Read more in Ethical Business Practice and Regulation: A Behavioural and Values-Based Approach to Compliance and Enforcement, by Hodges and Steinholtz, Bloomsbury Professional Publishing.

Pre-order now: Outcome-Based Cooperation: In Communities, Business, Regulation, and Dispute Resolution

Out this September – a new timely book from my co-author Chris Hodges:

How do we cooperate – in social, local, business, and state communities? This book proposes an Outcome-Based Cooperative Model, in which all stakeholders work together on the basis of trust and respect to achieve shared aims and outcomes.

The Outcome-Based Cooperative Model is built up from an extensive analysis of behavioural and social psychology, genetic anthropology, research into behaviour and culture in societies, organisations, regulation, and enforcement. The starting point is acceptance that humanity is facing ever larger risks, which are now systemic and even existential. To overcome the challenges, humans need to cooperate more, rather than compete, alienate, or draw apart. Answering how we do that requires basing ourselves, our institutions, and systems on relationships that are built on trust. Trust is based on evidence that we can be trusted to behave well (ethically), built up over time. We should aim to agree common goals and outcomes, moderating those that conflict, produce evidence that we can be trusted, and examine our performance in achieving the right outcomes, rather than harmful ones. The implications are that we need to do more in rebasing our relationships in local groupings, business organisations, regulation, and dispute resolution.

The book examines recent systems and developments in all these areas, and makes proposals of profound importance for reform. This is a new blueprint for liberty, solidarity, performance, and achievement.

Table of Contents

Part 1
1. Evolution in the Means of Cooperation
2. Human Motivation
3. Trust
4. Morality and Values
5. Purposes and Outcomes
6. Cooperative Culture

Part 2
7. Cooperation in Society
8. Cooperation in Business Organisations
9. Motivation in Capitalism & Business
10. Motivation, Reward, Remuneration
11. Cooperation in Regulation
12. Cooperative Regulatory Models
13. Traditional Approaches to Enforcement and Compliance
14. Intervention and Accountability
15. Cooperative Dispute Resolution

Pre-order from the publisher or reserve on Amazon.

Putting the “Why” above the “What”; reasserting fighting financial crime as the core purpose of financial crime compliance activity

Join me at the the key event for financial institutions and fintechs to manage their financial crime risks – the 2022 Anti-Financial Crime Summit – this December.

I’ll be in conversation with Shelley Schachter-Cahm, Chief Compliance Officer, CEX.io

EXPERT INTERVIEW: Putting the “Why” above the “What”; reasserting fighting financial crime as the core purpose of financial crime compliance activity

• Why tone from the top still matters, and how to assert ethics and ethical behaviour as central to your business mission. Who is doing this well, and what can be learned from them?

• Going beyond pure regulatory compliance; the value of radically rethinking the value of ethics across the board. Is this compatible with the required focus on regulatory compliance?

• How can a new regulatory approach help with this change – and what would this entail?

• Will ethics always be a problem in a profit driven banking environment?

Register Here

New Chair of the UK Regulatory Horizons Council

This just in from the UK RHC – and with that congrats to my longtime #EthicalBusinessRegulation co-author Chris Hodges:

The Business Secretary, Kwasi Kwarteng, has appointed Christopher Hodges OBE for a term of three years from August 2022 as the new Chair of the Regulatory Horizons Council, an independent expert committee established to ensure that UK regulation keeps pace with innovation and enables it to thrive while safeguarding the public.

Christopher Hodges OBE is Emeritus Professor of Justice Systems at the University of Oxford and a Supernumerary Fellow of Wolfson College, Oxford. He has extensive experience of regulatory systems, initially as a City of London lawyer and for the past 20 years as a leading academic researching many different sectors and advising numerous governments, regulators and businesses on regulatory issues. He is also the co-founder of the International Network for Delivery of Regulation.


Carnegie Conversation Starter: What ethical questions are you grappling with in your career?

Great conversation starter for this year’s #GlobalEthicsDay – discuss – and help spread the word …

Compliance, Ethics, and Organizational Culture

Learning opportunity from the SCCE – shows that even people who are focused on compliance have come to realise that culture, values, behavioural science, cultural assessment are all important aspects of their role – in fact, they are indispensable!

  • Mitigating the Effects of Unconscious Bias
  • Diagnosing Your Culture
  • Measuring ethical culture in a remote environment

There’s still time to register – more below…

Does your organization embrace compliance as a necessary foundational value? No matter how good your compliance program is, the organization could still be at risk without a culture that supports compliance and ethics. Join us on August 4 and take the first step towards fostering a foundational culture of ethics and compliance that lives within your employee base.

This one-day, virtual conference will provide practical guidance and insights from industry leaders on how to build and sustain a positive, compliance-forward culture throughout your organization.


Leading an Effective Ethics & Compliance Ambassadors Program

Extend the reach of your compliance and ethics program

Whether you call yours an “Ambassadors Program”, “Champions Program”, or “Liaison Program”, they all do the same thing—spread awareness and broaden the reach of your compliance and ethics program by using businesspeople as extra arms, legs, and ears.

Join us on August 18, 2022 for this one-day virtual conference, Leading an Effective Ethics & Compliance Ambassadors Program. Through sessions led by industry leaders with deep experience leading Ambassador Programs, you’ll examine different state-of-the-art efforts and ways to improve (or even launch) your own program.


Hot topics

  • Successfully navigating the changing landscape for ambassador programs
  • Optimizing the structure of your program to maximize effectiveness
  • Recruiting and training your ambassadors:  It’s all about the people
  • Inspiring, sustaining, and expanding the network in the medium and long term and building in continuous improvement
  • Communicating with the wider workforce
  • Metrics and assessing your program’s effectiveness

Who should attend?

  • Compliance and ethics professionals

Who’s speaking?

  • Julia Bailey – Chief Compliance Counsel, SVP, Global Ethics & Compliance – Maximus Inc
  • Roz Bliss – Manager, Global Integrity – Northrop Grumman Corporation
  • Kay Chapman – Ethics Analyst – SAIC
  • Beth Colling – Senior Vice President and Chief Compliance Officer – CDM Smith, Inc.
  • Lisa Fine – Senior Counsel and Director, Compliance – Pearson
  • Renu Jha – Ex-Regional Compliance Head- APAC CBRE
  • Toni-Lynne Langeveld – Senior Advisor, Ethics & Compliance – Southern California Edison
  • Duncan Milne – Risk & Compliance Director – BUPA Global Latin America
  • Jennifer Selliers – Director, Senior Consultant – Renaissance Regulatory Services
  • Matthew Silverman – Global Trade Director & Senior Counsel VIAVI Solutions

…and yours truly. You can find me on LinkedIn here.

P.S. Earlier posts about Ethics Ambassadors.

P.P.S. Help spread the word…

You can handle the truth

The psychologist Adam Grant recently highlighted research supporting the case for #EthicalBusinessPractice – and #EthicalBusinessRegulation. Here’s a link to the original paper by Emma Levine, University of Chicago and Taya R. Cohen, Carnegie Mellon.

Anti-Corruption as a critical condition for Sustainable Recovery

Sensible advice just in from the Basel Institute on Governance and Transparency International – just in time for the  Ukraine Recovery Conference  running 4–5 July in Lugano, Switzerland. The conference will see leaders from around the world pledge hopefully billions to finance Ukraine’s post-war recovery and reconstruction.

The recommendations include the need to:

  • prioritise the leadership selection process and reforms of Ukraine’s formidable anti-corruption institutions, including courts;
  • use transparent procurement systems for reconstruction efforts;
  • strengthen asset recovery systems so that money stolen through corruption in the past can be used to help fuel reconstruction efforts.

See the full recommendations heredownload the infographic or view the recommendations in Ukrainian.

And be sure to follow @BaselInstitute: