Much is made of the ‘tone from the top’ – the strength and consistency with which senior executives guide the ethical culture in their firm. What is often overlooked is the ‘tone from the middle’, and the Institute of Business Ethics’ recent survey into attitudes to ethics at work shows how important it can be.
Their survey findings should be studied by insurance firms, for while such firms may be busy dotting the ‘i’s and crossing the ‘t’s of their compliance with the Senior Insurance Managers’ Regime (SIMR), the need to understand and address the sources of ‘here and now’ ethical risk identified in the IBE survey should be given at least equal attention.
The IBE survey produced five interesting statistics relating to managers and ethics at work, and I’ll reproduce them for you here:
|Question||Agree||Neither Agree or Disagree||Disagree|
|1||My manager sets a good example||71%||20%||7%|
|2||My manager rewards good results, even if ethically questionable practices are used||36%||28%||36%|
|3||My manager supports me in following standards of ethical behaviour||69%||22%||8%|
|4||My manager explains the importance of honesty and ethics||69%||21%||9%|
|5||Issues of right and wrong are discussed in staff meetings||65%||22%||11%|
Of these five questions, the rate of agreement to the second and fourth questions rose significantly between the 2012 and 2015 surveys. This indicates that managers may be getting better at explaining the importance of honesty and ethics, but they’re also finding it difficult to then put those explanations into practice. In other words, they need to be better (or get better support from the top) at ‘walking the talk’.
And it appears to have created an interesting feedback loop – the more you explain ethics to employees, the better they’re able to spot when you’re failing to apply your own standards. And to add to this, when those ‘failing to apply own standards’ situations appear serious, many of those who blow the whistle feel their concerns are not being dealt with properly, as per last week’s blog post. Does this represent the beginnings of a downwards spiral in ethical confidence? Perhaps – there’s certainly a tension there. It could well be one that the FCA picks up through the type of calls going to their whistleblowing helpline.
There is also a clear conundrum in the above figures. A lot of people think their manager does set a good example (question 1), but a lot think they don’t (question 2). Interestingly, over the last seven years, the ‘agree’ response to question 1 has remained stable, while the ‘agree’ response to question 2 has increased by 50% – from 24% to 36%. Might firms be approaching a tipping point in employees’ attitude to executives ‘walking the talk’?
So how might insurance firms respond to such findings? Firstly, they should consider conducting their own ethics survey, to gather valuable management information about key touch points of ethical risk. With the approach of the SIMR and the new whistleblowing responsibilities, doing otherwise risks steering with your eyes, at best, half closed.
Secondly, they should give managers more support and better training. They’ve clearly learnt the language of ethics – big tick. However they need to understand that there’s more to demonstrating leadership on ethics than words.
Thirdly, they should be more rigorous in how their performance management operates. If employees are seeing rewards being given for ‘good, but unethical’ results, then it does two things: it signals to some that ‘anything goes’ in terms of achieving results, and it demotivates others in achieving results that now seem less palatable.