The Week in Ethics: Corporate Citizenship in a Trump Administration

Posted January 26, 2017 by Gael O'Brien
Categories: Congress, Sense of Purpose, Social Responsibility, Sustainability, Trust

Tags: , , , , , , ,

trump_white-house-photo-2017-featureCircumstances have caused an increasing number of companies and CEOs to speak out in recent years on hot-button social issues that previously weren’t part of traditional corporate citizenship. For example, nearly 400 companies filed an amicus brief on marriage equity with the Supreme Court, and employers and organizations banded together using economic leverage to fight legislation discriminating on the basis of sexual-orientation in IndianaNorth Carolina and Georgia. CEOs also weighed in against policies that exacerbated racial tension, like flying the Confederate flag and excessive use of force by local police.

This experience will serve corporate leaders well in navigating the challenges ahead. Issues of gender, race, sexual-orientation, pay equity, gun control and climate change are among the many hot-button social issues not going away – and likely to become more divisive — under the administration  of U.S. President Donald J. Trump. Corporate citizenship may be entering its greatest test.

Will a Trump presidency have the effect of muting CEO voices for fear of reprisals and Twitter attacks in a government now controlled by one political party? Or will corporate citizenship, acting out of a bigger sense of purpose, gain increased public trust and support?

The new landscape offers unknowns, perils and opportunity even as the administration’s agenda isn’t finalized. As president, Trump wields enormous power and a low tolerance for criticism which makes dissent tactically sensitive. Companies have a full plate keeping up with economic policies impacting their business. However, the hot-button social and environmental issues will create defining moments for leadership and corporate citizenship.

Three of my observations from recent corporate citizenship challenges: 1) how a company defines its purpose fosters momentum; 2) using economic leverage isn’t corporate bullying; and 3) it’s critical to speak up collectively for what’s right.

How a company defines its purpose fosters momentum

When company leaders see the purpose of business as delivering value to society and the environment in tandem with delivering financial results, things change. They create stakeholders, shifting into a more authentic and aware relationship with employees, customers and all those impacted by the business. It makes “community” personal and shapes values and behaviors around what enables the community to flourish or be harmed. If everyone has a stake in its success as stakeholders then what everyone does matters more. If a law or action discriminates against anyone in the community, for example, it is a catalyst in seeking out like-minded leaders to join in addressing the problem.

Using economic leverage isn’t corporate bullying

Under pressure from many business leaders, Indiana, former Governor Michael Pence, now Vice President Pence, backed down on provisions in the Religious Freedom Restoration Act that invited sexual-orientation discrimination. If the provisions weren’t dropped, Salesforce.com CEO Marc Benioff was the first to threaten economic sanctions  (like reducing investment in the state and offering employees a relocation option). Economic leverage, used in other states to address discriminatory legislation was called “corporate bullying”  by critics. As discrimination is illegal, how is it bullying for companies not to want their employees put at risk?

It’s critical to speak up collectively for what’s right 

Corporate Citizenship is an individual and collective act. It involves working continuously to reinforce ethical behavior in one’s own company and working collectively with other CEOs and like-minded organizations to address social and environmental concerns important to you and your stakeholders. There is strength in numbers, especially in uncertain and volatile times. Commenting  on corporate social activismBank of America’s  Chairman and CEO Brian Moynihan  said, “Our jobs as CEOs now include driving what we think is right. It’s not exactly political activism, but it is action on issues beyond business.”

Climate change is just one example of the persistence needed for progress. Climate action to create a low-carbon economy and support the Paris Climate Agreement faces a challenge getting President Trump’s commitment as he has called global warming a hoax. The most recent Gallup Poll on the subject, found 64 percent of Americans surveyed expressed some to great concern over global warming.

It is unclear how, if at all, dissenting popular opinion will impact the Trump presidency and social and environmental issues. He lost the election’s popular vote by an unprecedented 2.9 million ballots. The day after the Inauguration over 600 peaceful marches  – 400 in the U.S. cities and more than 200 around the world –  put the president on notice regarding grassroots support for human rights issues. The president’s popularity (and how it impacts members of Congress) will be a bellwether of his ability to get his agenda through. Likewise, a company’s continued strong financial performance creates latitude to address controversial social issues.

Those companies whose business purpose is more than just profit are likely to avoid ethical problems longer if federal regulations and enforcement are relaxed. According to the 2017 Edelman Trust Barometer, 75 percent of respondents agree that “a company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.” While 53 percent believe the current overall system has failed them, many continue to have faith in business as an institution. “Among those who are uncertain about whether the system is working for them,” the survey found, “it is business (58 percent) that they trust the most.”

Whether or not progress can be made on hot-button social issues in a Trump administration, acting out of a bigger sense of purpose and drawing strength from collective voices will likely gain increased public trust and support of corporate citizenship.

Photo via Whitehouse.gov.

Gael O’Brien, a Business Ethics Magazine columnist, is an executive coach and presenter focused on building leadership, trust, and reputation. She publishes The Week in Ethics.

Reprinted with permission: This column was originally published January 23, 2017 entitled “Corporate Citizenship in an Age of Uncertainty” in Business Ethics Magazine.

Gael O’Brien, January 26, 2017, The Week in Ethics

The Week in Ethics: How Owning Purpose Tames the Unexpected

Posted December 30, 2016 by Gael O'Brien
Categories: Community, Leadership, Sense of Purpose

Tags: , , , ,

Benjamin Franklin was brilliant, but in 1789 he forgot to include an essential element in his famous remark, “…in this world nothing can be said to be certain except death and taxes.” He should have said “nothing can be certain except death, taxes AND dealing with the unexpected.”  leadership definition photo from istock

We use religion and spirituality to deal with death. CPAs with taxes. However, what helps us deal with the unexpected – the obstacles, setbacks and disappointments that throw our professional (or personal) world into chaos? The unexpected can paralyze. It can ruin our best intentions and shut us down faster than a Nor’easter blizzard.

We should never allow the unexpected to get in the way of making real our best intentions. After some soul searching, here are three questions I use to guide me through the unexpected:

What do I stand for? What can I count on about myself? What can inspire me to move forward in spite of problems the unexpected is causing?

I first remember using these questions when the unexpected challenged my new business.

When I started my business, a timely introduction enabled me to get work from a new VP at a global company in Boston. I was a very small fish, living in Columbus Ohio. The new VP was facing his first management committee meeting where he would pitch the project I was helping him create. I developed the materials he needed and emailed them. However, on the morning he replied asking for some additional elements — that would require a lot more research — it was only two days before his meeting and I’d just returned from the doctor. My nagging cold had raged overnight into a severe case of bronchitis. If I went back to bed (so tempting) I wouldn’t make his deadline. I knew there wouldn’t be more work from him once he got acclimated into his new company’s resources. And the money, while needed, was not as vital then as going to sleep. So I rationalized, surely someone at his company could take over. But then, I turned to my three questions.

What do I stand for? (My response was helping leaders succeed.)

What strengths could I count on here? (When I was healthy, I cared about my work and I had the skills to do what he needed.)

I struggled with what could inspire me to do the work feeling so sick. I visualized him walking into his meeting unprepared but that didn’t move me. Then I visualized his having convincing materials, winning approval and using what I’d done to make a difference at his company. That inspired me. I cared about creating that outcome enough that I was willing to spend the next 8 hours at the PC. I sent back the plan. His project was approved. I felt a sense of exhilaration that my purpose was real. Knowing that distracted me from how sick I felt.

How do we deal with the unexpected? By being recharged by our purpose. So as 2017 is ready to launch, if you haven’t discovered your purpose yet, take time to think about what you stand for/believe in that creates meaning in your work and gives you great satisfaction. A sense of purpose creates its own inspiration, producing a lot of positive energy.

Leadership expert Simon Sinek, in his TED talk “How Great Leaders Inspire Action,”  says purpose is the WHY behind what we do. It is what inspires others to follow us.

Most companies have mission or purpose statements. However when leaders’ actions don’t inspire employees in how they demonstrate it, we can’t let that stop us from taking our own and the organization’s purpose seriously. Research indicates that having a deeper sense of purpose creates engagement and satisfaction with one’s job. Everyone deserves that and we control the ability to have it.

Starbucks’ mission, for example, is “to inspire & nurture the human spirit – one person, one cup, and one neighborhood at a time.”  A Starbucks I visit often has amazed me with how its employees show up. A barista called “hello Gael” after only my 3rd visit. Another barista, I didn’t remember waiting on me more than once, recited my drink order specifications when I reached the counter before I could order to see if she had it right. These simple acts created a sense of being part of a community there, something I’ve never experienced in any other Starbucks. No matter what unexpected problems might be going on in their personal or work lives, these baristas consistently make me (and others) feel valued, which is the essence of nurturing the human spirit.

When in our jobs or personal lives, the unexpected throws up roadblocks consider the power of your answers to these three questions.

What do you stand for? And what does your organization stand for?

What can you count on about yourself?

What can inspire you to move forward in spite of problems the unexpected is causing?

Then visualize the best that can happen when you own your purpose. Visualize the positive impact you can have on your team, company, customers or community.

And then feel the magnificent energy when you commit to making your purpose real.

The Week in Ethics

Gael O’Brien, December 3o, 2016

Gael O’Brien is an executive coach, presenter and leadership columnist. She publishes The Week in Ethics and is a columnist for Business Ethics Magazine where her December column  is Where Wells Fargo Goes from Here

Please follow The Week in Ethics FB page which provides ongoing updates of news items with ethical implications.

The Week in Ethics: What We Can Learn About Optimism & Leadership from Simon Sinek

Posted December 13, 2016 by Gael O'Brien
Categories: Culture, Ethical Behavior, Leadership

Tags: , ,

“A good leader doesn’t only inspire us to have confidence in what they can do. A great leader inspires us to have confidence in what we can do.”  Together is Better: A Little Book of Inspiration (Simon Sinek, 2016)

The adage “what we focus on, we get more of” is as true in leadership as anything. And, conversely,  when we don’t focus on the right things, crises inevitably occur.

Leadership expert Simon Sinek refers to himself as an optimist. He studies and writes about what makes great leaders. He talks about vision, purpose, service and the “why” behind leadership: perhaps best known for his 2009

TED Talk “How Great Leaders Inspire Action” (which has had over 29 million views so far).

The cautionary tales of leadership gone wrong, like Wells Fargo’s current ethics crisis, are very troubling but don’t necessarily inspire us to be better leaders. Perhaps because we don’t see ourselves making the same choices. (And yet, too often those choices are made.) Sinek, in his new book, Together is Better, offers a fable of how optimism is possible — for leaders who want to make their leadership count as well as anyone seeking more meaning in their professional and personal lives.

The story line is simple and mirrors workplace challenges. The one or two sentence observations on life and leadership often fit the number of characters in a Twitter tweet. For example, “A team is not a group of people who work together. A team is a group of people who trust each other.” This wisdom may be dismissed as obvious. However, not so obvious to the number of leaders who talk about their people as a team (as former Wells Fargo Chairman and CEO John Strumpf did in his testimony before The U.S. Senate Banking Committee) when their team doesn’t trust each other or the company. Also consider how often leaders don’t realize trust is absent because they aren’t focused on ensuring trust is earned and present.

The leadership fable has nearly 50 Sinek observations that invite deeper consideration. He’s integrated and distilled themes from his work — including finding a vision, innovation, passion versus stress, success and what inspires — and put them into a tale that demonstrates how to take a leadership journey together rather than alone.

The vision, he explains in the preface, that drives him (and the fable) is that people working together “… build a world in which the vast majority of us wake up every single morning inspired to go to work, feel safe when we’re there and return home fulfilled at the end of the day.”

“What good is having a belly if there is no fire in it?” Sinek asks. “Wake up, drink your passion, light a match and get to work!”

The end of the year, and the beginning of the next, offer another window for self-reflection. An opportunity to turn the focus to our own leadership and consider what we stand for and what we are doing about it. Sinek’s fable and observations invite a focus on what enables our leadership to be more open to inspiration from those around us, as well as being more inspiring to others. It’s a catalyst for optimism.

The Week in Ethics

Gael O’Brien, December 13, 2016

Gael O’Brien is an executive coach, presenter and leadership columnist. She publishes The Week in Ethics and is a  columnist for Business Ethics Magazine where her December column  is Where Wells Fargo Goes from Here

Please follow The Week in Ethics FB page which provides ongoing updates of news items with ethical implications.

The Week in Ethics: Wells Fargo’s Next Move? 10 Suggestions

Posted September 22, 2016 by Gael O'Brien
Categories: Code of Conduct, Conflict of Interest, Culture, Ethical Behavior, Ethical Leadership, Governance, Integrity, Leadership, Reputation, Tone at the Top, Transparency, Trust, Uncategorized

Tags:

Update: See my 12/10/16 Business Ethics column on Where Wells Fargo Goes From Here .

Update: In October 2016 Timothy Sloan replaced Chairman/CEO John Stumpf, becoming CEO and President. The chairman role was split and given to independent lead director Stephen Sanger.

Update: September 27, 2016: Wells Fargo Independent directors issued a statement  they will lead an investigation into “the bank’s retail sales practices and related matters” with the Board’s HR Committee and independent counsel. Chairman/CEO John Stumpf to forfeit $41 million unvested equity awards and “will forgo salary during the investigation.” The U.S. House Financial Services Committee will hold a hearing on bank’s “unauthorized customer accounts” on 12/29/16.

How will Wells Fargo resolve the ethical and culture issues it faces? And, how will it move beyond a poor showing at the Senate Banking Committee hearing and start to rebuild trust? First some background. Then 10 suggestions.

The best thing a CEO with strong convictions about the “rightness” of his/her own position can do when embroiled in a crisis is to spend time with trusted sources (inside or outside their company) who see things very differently. Being open to these viewpoints and questions iphone-pictures2-222and multiple perspectives raised make it harder for  CEOs to stay wedded to their position. However, once a CEO is under fire the temptation to stick with like-minded people can increase. What’s lost then is stimulation to think deeply about different aspects of an issue to gain new insights and awareness that enable developing alternatives legitimately aligned with values. Being stuck in “rightness” can lead to error blindness, a term popularized by Kathryn Schulz  who points out, “Trusting too much in feeling you are on the right side of anything is dangerous.”

It can lead to decisions that put a CEO on the defensive in front of a U.S. Senate hearing, as John Stumpf Chairman and CEO of Wells Fargo experienced September 20, 2016 testifying before the U.S. Senate Committee on Banking, Housing & Urban Affairs.

Stumpf was questioned about the bank’s unauthorized accounts and allegations of a pressure-cooker sales culture which became public in 2013 (Los Angeles Times story) and continued. Wells Fargo has fired 5,300 employees, paid a fine, faces an investigation into its sales practices by New York and California federal prosecutors and can anticipate an upcoming hearing by the U.S. House Financial Services Committee in addition to follow up from the Senate Banking Committee. Earlier this month The U.S. Consumer Financial Protection Bureau filed a consent order outlining findings of the bank’s “improper sales practices”from 2011 to 2016.

A few days before the Senate hearing Stumpf, in an interview, disputed Wells Fargo has a culture problem. He maintained that stance with Senate committee members, while indicating changes the Bank planned to make. However, the bipartisan committee was united in criticism that Stumpf, the Board and senior leadership hadn’t gone far enough, fast enough and weren’t showing accountability. From the Republican Committee chair to Democratic challengers, Senators didn’t buy that the bank’s culture isn’t an issue.

Where does this leave Wells Fargo? Anyone who has been through corporate crises — as I and many others have — knows that criticism from outsiders is hard to take. However, there are huge pitfalls if Mr. Stumpf stays locked in the “rightness”of his position (in spite of his 30 plus years service at Wells Fargo, presiding over several of its acquisitions and knowing his industry and company better than outsiders).

His performance at the Senate hearing this week indicates his time has been spent with legal and public relations teams and like-minded insiders. Getting out of a crisis, turning around a culture and re-earning political and public trust, doesn’t happen by working harder with the same mindset. (The much touted definition of insanity is doing the same thing over and over and expecting different results.)

I’ve limited myself to 10 suggestions for Wells Fargo to support the start of a turnaround:

  1. The board should appoint a new chairman — an independent director — separating the role from the CEO for many reasons including signaling stronger board governance.
  2. The board should immediately decide about claw backs related to compensation of former head of community banking Carrie Tolstedt, Stumpf and any others. As part of re-earning trust, all their actions should be transparent and well communicated.
  3. The board should direct Stumpf and his team to meet with Wells Fargo’s ethics and compliance teams and risk officers to discuss/evaluate ethics, compliance and risk operations for strengths, weaknesses and safeguards to better integrate sales and all business strategies with corporate values and prepare a report for the board.
  4. The compliance and ethics leaders (and C-suite leader to whom they ultimately report) should initiate meetings with leaders of the Ethics & Compliance Initiative and the Society of Corporate Compliance and Ethics to address best practices, implementation challenges and examples where ethics and compliance leaders weigh in on business strategy discussions in sales and all areas.
  5. The board and senior management should identify outside experts to discuss how to  realign authentically culture around values. A place to start is the nearby Markkula Center for Applied Ethics.
  6. Stumpf and his management team should become acquainted with Margaret Wheatley’s concept of self seal (the rightness of one’s position), Kathryn Schulz’ TED Talk (error blindness) and Margaret Heffernan’s  Willful Blindness for starters. These are lenses that encourage conscious and unconscious unethical behavior.
  7.  A cross-functional team of senior leaders with ethics and compliance leaders should review the company’s five primary values; for each, identify five or six specific expected behaviors to be incorporated into company policy and discussed in ethics training and performance reviews. Currently, the values are too abstract.
  8. Under the value “Ethics” the company says “We strive to be recognized by our stakeholders as setting the standard among the world’s great companies for integrity and principled performance. “This should become a business objective with Board and CEO focus to keep this commitment at the center of the turnaround’s activities.
  9. At the upcoming House Financial Services Committee hearing, Stumpf and those testifying can start rebuilding trust by being fully prepared to answer questions directly and completely, having with them information relevant to committee questions. Stumpf should also make himself available to Senate Banking Committee leadership to make sure information provided since that hearing addressed open questions.
  10. Trust is a relationship where “integrity” and “principled performance” are realities, not marketing slogans. In relationships with employees, customers, customers affected by unethical actions, employees pressured by aggressive sales tactics, Wells Fargo leaders have to admit what went wrong and make systemic changes. A start is to amend the vision statement that says “We want to satisfy our customers’ financial needs and help them succeed financially” and add “in ways that build lasting relationships of trust and integrity.”The Week in EthicsGael O’Brien, September 22, 2016Gael O’Brien is The Ethics Coach columnist  for Entrepreneur Magazine. She is also a columnist for Business Ethics Magazine where her September column is “One man’s Leadership Toward a Goal: ‘The Great Mission of Business Ethics.'”

Please follow The Week in Ethics FB page with ongoing updates of short items in the news with ethical implications.

 

 

 

 

The Week in Ethics: Women Leaders Galvanize Detroit Around Justice

Posted November 8, 2015 by Gael O'Brien
Categories: Community, Ethical Behavior, Ethical Leadership, Leadership

Tags: , , , , ,

photo gold key in puzzle doorWhen things fall apart for lack of human and financial resources, becoming overwhelming, the key that enables leaders to transform the impossible to solvable is a compelling sense of greater purpose that is shared.

An illustration is the story of how Kym Worthy, Prosecutor of Wayne County, Michigan raised, and is a catalyst in efforts to continue to raise, the millions of dollars needed to process over 11,000 rape kits that were unopened and untested, found in Police storage; some there as long as 30 years. The move to solvable is often slow, demanding resilience. For Worthy, who began this effort in 2009, it evolved from personal and professional commitment and actions to enlisting others in the goal that justice be available to each rape victim.

As with any leadership act once it taps into others’ shared beliefs, momentum builds that can overcome obstacles. Worthy’s efforts got on the radar of Detroit businesswoman Joanna Cline who involved other Detroit businesses in raising funds, awareness and donating services. A public-private partnership called Enough SAID (Sexual Assault in Detroit) has been created.

Meanwhile, Detroit had its own problems filing for, and then emerging from, bankruptcy. This could have derailed the business leaders’ efforts. However the fundraising continued. As an outcome of ethical leadership, the stakeholders had grown to include the city of Detroit as well as the rape victims.

“The business community has rallied around us,” said Peg Tallet, chief community engagement officer at Michigan Women’s Foundation in an interview, “particularly businesswomen who are saying this can’t happen here if we are going to make this the city we’re all working to make it.”

Worthy’s office “has been able to identify 625 people suspected of being serial sexual assault offenders.” According to one of the businessmen involved in Enough SAID, “…you can’t have economic development if you can’t feel safe walking to your car after work.”

Those involved in Enough SAID provide a crucial teachable moment for other cities, governments, chambers of commerce, businesses and communities in general.

The Week in Ethics

Gael O’Brien, November 8, 2015

Gael O’Brien is The Ethics Coach columnist  for Entrepreneur Magazine. She is also a columnist for Business Ethics Magazine where her September column  is “Volkswagen’s Next Challenge: Keep Scandal from Happening Again.”