[00:00:00] Speaker A: Hi, everyone. In this episode, we'll learn about how you can improve your manager communications on topics involving ethics and compliance. I'm your host, Bill Coffin, and this is the Ethicast.
People. Managers are in many ways the heart and soul of your ethics and compliance program.
They are the first people employees typically turn to when raising concerns over misconduct or when there are warning signs about the organizational culture. Conversely, managers are also often seen as the frontline for delivering to employees the expectations and aspirations of not just the ethics and compliance team, but that of senior management and even the board. And yet, managers often struggle with these burdens because they just don't receive the right kind of support, which creates otherwise preventable friction and risk within the organization.
With us today to discuss how organizations can communicate E and C issues more effectively with people managers are Ethisphere's Erik Jorgensen, Director, Data and Services, and Katie Kruger, Senior Culture Analyst. Katie? Eric, it's wonderful to have you on the Ethicast. Thanks so much for joining us.
[00:01:12] Speaker B: Thanks for having us, Bill.
[00:01:13] Speaker C: It's fun to hear the music from the other side.
[00:01:18] Speaker A: No doubt. Well, hey, my first question for you is Ethisphere has a unique vantage point through its data. So I was wondering if you could walk us through the two key data sets that we use to understand ethical culture and why it's important to look at both. Eric, could you get us started?
[00:01:33] Speaker B: Sure. I'm actually going to expand that. I'm going to say that there's three different places that we get our data from. From my perspective, we've got two. We have our eq, which is what we call our ethics quotient. It's a series of over 200 different questions on all types of different ethics and related type topics. Our EQ is completed by companies who apply for the Ethisphere's World's Most Ethical Companies.
We use it for benchmarking with our BELLA members. We use it as part of our program assessments. It's a chance for us to have benchmarkable data from a wide variety of companies.
The other piece of the data that we have is much more qualitative, if you will. And it's the experiences that we have doing these benchmarking calls or working with these individual companies. It's the experiences and the impressions that we have based on this data.
[00:02:20] Speaker C: From my side, I work on our culture team here at Ethisphere and we have a data set internally we would call the CQ the Culture Quotient. So really it's a complement in a lot of ways to the eq.
We get our culture quotient data from clients that run surveys with us. They send surveys to either their entire population or a sample of their population. And we collect all of those responses, aggregate them, and have a lot of data to look at, really from the employee experience.
So, you know, if the EQ tells us if a system exists and whether or not something has happened within an ethics and compliance function, CQ kind of tells us if that system is working in practice and how the employees really feel about it.
[00:03:11] Speaker A: Katie, when we look specifically at managers, what do these data sets reveal about the role that they play in shaping an ethical culture?
[00:03:19] Speaker C: On the culture quotient side, on the CQ side, we have eight pillars that we would measure in these surveys where we collect this data here at Ethisphere, the first two pillars deal a lot with the foundational pieces of an ethics program, A lot about employees, awareness of the code and where to find it, policies, training.
The other, the other five pillars, pillars three through eight, really deal more with the hearts and minds of employees.
So more things like comfortability, speaking up, their perceptions of senior leaders, their perceptions of peers, and importantly for today, perceptions of managers. And within that manager pillar, we ask a few different questions.
One question I want to dive a little bit deeper with today, I think, Bill, we have a graphic to check out. This graphic pivots a few different questions from the culture data set.
That first column on the left goes into employee responses to a question from pillar 6 surrounding perceptions of managers that asks about the frequency with which their manager discusses ethics or compliance related issues and topics. So that first column goes through the data that I pulled for this slide today. Just a little footnote on it all, there are a little over 860,000 responses on this slide with surveys conducted between January of 2024 and January of 2025.
And when we ask employees how frequently their managers are having these conversations, we have a four point scale, essentially, so frequently we would define as once a month on average, occasionally would be once a quarter on average, rarely once a year, and never.
So if I'm looking at that first column, we've got 21% saying rarely or never. So 21% of the respondents in that 860,000 are saying that they quarterly or less get this kind of communication from their manager.
That's one in five respondents that we're really talking about here. And when that plays out across our data set, we can see really the impact that managers have on employee perceptions, even just through this one modality. Even through this frequency of conversation. So there are three other questions across those three other columns on the graphic.
If I jumped all the way to the right one, we're looking at the percent of employees that are comfortable approaching their manager with ethics and compliance issues.
That's another question from pillar six about manager perception. So if my manager is frequently having these conversations with me, 98% of the time, I'm comfortable approaching them with an ethics and compliance issue question.
If I jump all the way down to that bottom right statistic, that 50%, that's saying that for those who are never having these conversations with their manager or vice, having their managers having their conversations with them, only about 50% of them are comfortable approaching their managers. And this is a through line throughout our data set. Really.
It's certainly not causation, but when we look at all of these, they're all correlated. You know, that first column has to do with the percent of employees that would even just hypothetically report a misconduct that they observed. So 97% of those having those frequent conversations and even 93% of those having that conversation occasionally would hypothetically report. That jumps 76% if they're saying their manager never speaks with them about these kinds of things. And again, that middle column there is the percent of respondents that believe the rules are the same for everyone.
[00:07:30] Speaker B: I see Katie smiling because she knows this is absolutely my favorite slide. I love talking about this slide. And quite honestly, when I work with companies, we make sure that we run this same numbers for individual companies because it is so impactful.
We've recognized and embraced the incredible influence that managers and people leaders have on the organization and, and the measurements that help prove it.
We encourage companies to do it and we've started measuring to see what they're doing. In our eq, we ask, you know, how often or how many companies have specific manager training training that goes specifically to people leaders on how they do their job and how they, how they need to react as managers. 93% of the world's most ethical companies have manager specific training.
Even more importantly, and we're seeing this percentage go up and up, almost 50% of companies actually require it. It's not just something that they hope that managers have. They're realizing the importance and the impact that managers have and they're now requiring managers to take this training specifically about being a people leader within the organization. So I think the numbers show that it's effective and I think the numbers also show that companies are getting it and, and they're starting to invest the time and the effort to provide some training for their leaders.
[00:08:48] Speaker A: So based on what the data is telling us, how should leaders rethink the role of managers in strengthening ethical culture?
[00:08:55] Speaker B: You can have the best written standards, you can have lots of resources, you can have verbal buy in. But unless the company's got a strong culture that lives its values and embraces its process, too often it's just words on paper. Too often it's just an excellent policy that nobody reads or nobody pays attention to.
The second thing I want to make sure I mention is again that huge influence on culture that people leaders have on their employees, on the culture of the organization. So that's what companies are starting to embrace, that influence that managers and people leaders have.
Look in survey after survey, whether it's an ethisphere survey or whether it's another organization, we always find out that managers and people leaders are always in the top two or three places of places that employees want to report misconduct or seek advice. I also saw an interview or a study a couple of years ago that putting aside one spouse, the amount of time that an employee spends with is their manager. That's, that's the most that employee spends with their with another person.
So that along with the previous slide that Katie showed, when managers are talking about ethics compliance related type of topics, employees listen. Good things happen, policies are followed, cultures embraced, values are embraced, good things happen and the numbers prove it.
[00:10:17] Speaker A: So Eric, what does it look like in practice to equip managers to lead meaningful ethics conversations with their teams?
[00:10:24] Speaker B: So it's a couple of things. It's managers again recognizing that the influence that they have and then ultimately utilizing it again. I keep going back to my favorite slide but notice that it says discussing ethics and compliance topics. It doesn't say present, it doesn't say lecture. It says discussing ethics compliance topics.
What we've found is that having conversations, it's facing a difficult question within your organization or within your business unit and discussing the options with the team.
Bringing something up that's in the news, something that's industry specific and talking about how your organization may handle it or what decision they might have.
Bringing up a scenario, all of these decision making ideas is within having those conversations with your staff is the way that employees embrace it in way that managers help exert that influence of living the values. We shouldn't mistake this and say talking about ethics or talking about the values of the company is some philosophical discussion on ethics or morals. Something that's more suited for a university lecture hall.
It's Really a conversation within your business, within your employees, within your staff about the decisions that are being made and how those decisions are occurring.
And the importance of the influence of managers has become more prevalent. We're also seeing companies that are customizing their training. They're not just talking about the risk topics, they're not just talking about those individual scenarios. They're also supplementing in training and communications on the other aspects of being a leader. The importance of being able to listen, the importance of being able to influence and tying those aspects together with this topical conversations so that managers are effective, they're able to use that influence in a positive way.
[00:12:16] Speaker C: Nearly everyone has a manager. You know, it's very few people at an organization that don't have a manager. You know, maybe your CEO and even arguably they're reporting to someone, the board, the stakeholders.
But wholesale, everyone has someone that can be having these conversations. And it's a cascade effect really when it comes down to it, you know, ethics and compliance can send messages and senior leaders can certainly amplify those messages.
When it comes down to it, it's really those managers that are putting it into practice. And one email blast from ENC certainly can go to tens of thousands of people. But when managers are having these conversations, it's hundreds of small, trusted to Eric's earlier point, reinforcements happening. You know, the ethisphere data really does show us that when employees are facing those ethical dilemmas, they don't usually start with a hot they, they're more likely to go to their manager or to another people leader, another trusted person.
And so whether they're trained that way or not, that kind of makes every manager a frontline ethics officer in their own way.
And equipping them to hold that role is certainly important.
And a benefit of this is that that cascade kind of can work in both directions. Managers model integrity, they invite discussions that increases psychological safety. Employees become more comfortable speaking up. And that's really the synergy that we want as an ethics and compliance function. We want everyone to be more comfortable speaking up. We want people to be following these policies and our procedures. We want ethics in practice. And this is one way to really operationalize all of that.
[00:14:25] Speaker A: Is this just having more conversations about ethics or is about having better conversations about ethics? Or is it a mixture of both?
[00:14:33] Speaker C: Arguably, it would be a mixture of both. We're all humans, we, we don't love when we're just expected to do something and don't necessarily have an understanding as to why. I've seen companies have great success with showing managers this slide, with incorporating this slide or this information into manager training, because it's really impactful. It's not only impactful for senior leaders and people receiving this data on some more formal readout, but to show managers the impact that they can have with numbers like this means something.
Of course, the slide relates to frequency of communications. Yes. But I would also remind listeners that in order to respond to how often my manager is having these conversations with me, I have to remember having had them.
So a manager can talk to me about something, certainly. But unless I'm engaging with it and internalizing it, I won't remember it.
And that's that internalization that does it matter if the conversations are better? If it helps me remember it and helps me apply it, then both pieces matter.
[00:16:04] Speaker B: I think I take a little bit of a different take than my colleague.
I agree with her, and I believe it's a combination of both. But I'm reminded of one of the first bosses and mentors that I ever had who talked about, employees will take action because I tell them to do it. They're going to embrace the action if I understand the reason why.
And when it comes to having conversations with your staff and being able to explain the reasons behind the decision, and especially if you're able to throw it back into the company's values and integrity, caring, honesty, whatever your company's values are, that's why we made this decision. That's why we were doing it. I think it sticks better. I think employees believe it and they end up living it. Doesn't mean that every decision, you can have that deep conversation, but when you can, you should. I also think it's kind of an organic, organic conversation.
And if, if as a leader, if you're having conversations about the why, then employees may not even realize they're talking about compliance or ethics or values. It's just, oh, why did we have that conversation? I think it sticks better. I think I've seen that it sticks better because again, employees are understanding the why without even really realizing it.
[00:17:14] Speaker A: Yeah. So what immediately comes to mind for me are, you know, kind of intimate, small group or one on one conversations. But, you know, so many of the ethics compliance leaders I talk to are running programs that are across really large organizations that are either geographically diverse or they just have, you know, hundreds of thousands of employees.
So my last question for you is, how do organizations scale ethics conversations consistently across thousands of managers?
[00:17:40] Speaker B: The secret of success for a lot of companies is, you know, how they can have a central goal and yet an international organization with all kinds of locations. There's that central premise that's applied, applied universally. And I think the same thing holds true when it comes to ethics of compliance and the values of the organization. The values are universal, regardless of where you're at or what you do for that company.
How it's applied, how it's interpreted, how it's put into practice is a specific and a very specific. And it could be a regional or departmental level.
You may have senior executives in finance and you may have, you know, a manufacturing team. Vastly different jobs, but they all work for the same company. And their values are integrity and honesty or whatever they happen to be, and they live by that. So the examples are different, but the values are the same.
Same thing with different levels. You may have a. Have a group of call center operators and senior senior people in accounting, again, different conversations. Probably the most relevant example, though, is you may have employees doing even similar jobs in Iowa and in Buenos Aires and in Munich and in Tokyo, all over the world, just for four corners of the world.
And the values are the same, but how they're applied or how they. How they come into play are slightly different. The message is different. So the challenge is ethics and compliance being able to help facilitate some of those discussions, help give those examples of what the values are, what they mean in a daily life, so that employees, whether they are in accounting or they're in finance, whether they're in Tokyo or Buenos Aires, they all get the same underlying message of these are the values of the company.
These are how we apply them. This is how we've chosen to do business.
[00:19:28] Speaker C: This really relates to that question, or the question of having more conversations versus having better conversations. In the end, it can't be prescriptive because employees will be perceptive of that. The conversation really does need to be authentic. And while we certainly should help managers and equip them with topics, equip them with resources, equip them with knowing how to handle these types of discussions, it still needs to come from their voice, because that's the person that an employee trusts in this situation, that that's the person that they're going to with their ethical dilemmas. That's the person that has this leverage in a way to model these behaviors, to live these values so that employees can really embrace and embody and contextualize all of them.
So it sure is a balance of, yes, we want these conversations to be happening consistently across our organizations, and we want to equip managers in these ways, but it also has to come from the manager's voice.
[00:20:49] Speaker A: Well Eric and Katie, thank you so much for such a detailed conversation. This is a complex and data rich issue and we sure appreciate the clarity that you have brought to it.
[00:20:59] Speaker B: Happy to do it Bill. Thanks for having us.
[00:21:01] Speaker C: Absolutely.
[00:21:03] Speaker A: For plenty of free in depth reports, guidance, documents, articles, videos and more to help you reach ever higher levels of excellence in ethics and compliance, visit the Ethisphere resource
[email protected] resources. Thanks for joining us. We hope you've enjoyed the program. For new episodes each week be sure to subscribe to us on YouTube, Apple Podcasts and Spotify. And if you haven't already please follow at the sphere on LinkedIn as well to learn more about how we help organizations measure and improve their ethics and compliance programs. Together we can make the world a better place by advancing business integrity.
That's all for now, but until next time, remember strong ethics is good business.
