“We’re just not that kind of company.” I hear it all the time. “That would never happen here.” “We don’t have those kinds of people.”
What is the question to which those are the all-too-frequent answers? “Are there really any significant bottom-line risks faced by a lack of attention to ethics, compliance, and accountability?” What do I mean by significant? Anywhere from several million dollars to a billion dollars plus. It seems to me that those amounts represent some pretty big money to at least most organizations…
Isn’t it interesting, though, that sometimes smaller numbers actually hit us harder – or at least more easily – than bigger ones? Maybe we can relate to them more easily. Whatever the reasons, though, it’s true.
I often ask, “Do you think it could it happen in your company that one of your employees could be accused of creating some kind of hostile work environment?”
“Well, actually that has happened to us. A couple of times, actually.”
“Uh-huh… Any chance someone could be accused of some type of discrimination on the job?”
“Well, actually, yes, I can imagine that happening.”
“Uh-huh… Were you aware that those kinds of actions are often estimated to cost an average of around $250,000 each with that figure frequently tripling or more if litigated?”
“Hmmmm, I never thought about that.”
“So, if done well, do you think that an increased focus on ethics, compliance, and accountability in your department might stop even one hostile work environment or discrimination claim over the course of the careers of everyone currently working for you?”
“Sure! Probably well more than that!”
“Do you think it would cost you $250,000 to bring someone in to help you create an improved ethics, compliance, and accountability focus in your department?”
“Geez, not even close.”
Now, I can only speak for myself, of course, but I’m pretty sure I’ve never charged a single department $250,000 to help them create a better focus on ethics, compliance, and accountability.
And here’s the thing…
That above conversation is simply based on the reasonable hypothetical that this programming would help prevent just one hostile work environment or discrimination action over the entire course of every existing employee’s career. (That’s a pretty conservative expectation it seems to me.) Not a word was said about the potentially significant reductions in fraud losses, reducing or preventing the legal fees, fines, and settlement costs from a whole world of other legally enforceable compliance problems, or the huge opportunity costs caused by reputational damage. Yet each of those potentially very significant costs will be saved by an effective focus on ethics, compliance, and accountability.
So, if you or your organization are balking at investing in having someone in to help with ethics, compliance, and accountability, maybe for now I’ll skip giving you the really big financial reasons for doing it; but how about 250,000 smaller ones instead?