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Corporate activism from the CECO perspective

Katie Smith | July 25, 2018

In just the past few months, the business world has undergone serious, and necessary, change. Movements like #MeToo, #TimesUp, and #NeverAgain have elevated previously unheard voices and forced corporate America to reckon with issues long swept under the rug.

Companies responded with everything from official statements to policy changes to altered business models. These decisions were met with their share of controversy, but the choice to risk revenue for ethics was largely applauded. Beyond doing the right thing, it’s clear this new standard for ethical decision-making has concrete business ramifications.

What is less clear to the public is how these decisions are made, and by whom. CEOs and boards of directors have been hailed for their responsiveness, but I’d argue there’s another critical voice behind these decisions: the chief ethics and compliance officer. 

As a CECO watching this ethical transformation take root across industries, I can’t help but consider how it must be playing out behind the scenes. I’ve been in compliance and ethics for almost two decades, and I’ve seen the compliance role evolve in significant ways, but the old stereotype persists at many companies: that compliance professionals always lobby executives to make safer, restrained choices.

Often, they’re perceived as the bad cop, the lawyer who steps in to shoot down any idea with a hint of risk. But the scales of risk and reward are different today, and CECOs, general counsel, and compliance leaders are helping lead conversations around how and when to take bold stands in the face of controversial issues. As the CEO at my own company argues, in an age of transparency and consumer accountability, “there’s risk in standing up, but it’s far riskier to stay seated.”

Over the past few months, we’ve watched major brands take controversial stands. This gives me hope for the ripple effect of ethical transformation, especially when the charge is employee-led. Google is an excellent example, in which more than 3,000 employees wrote a letter to the CEO voicing their objection to a Department of Defense contract. As a result, Google announced it would draft a set of ethical principles to guide all future work. Just a few weeks later, employees at Microsoft took a similar stance against the company’s work with ICE, bringing the topic to the national stage. These conversations, questions, and action are proof that employees and companies are paying closer attention. 

The CECO is tasked with not only guiding the response to public outcry and societal expectations, but also the internal ethical tide driven by employees. In fact, it could be seen as a positive that Google’s employees felt empowered and ethically driven enough to speak up about their own vision for living out company values.

We have the potential to make an impact that extends far beyond our own offices. Whether an issue is brought to our attention by employees, a competitor, or external events, the role of the CECO is to look at it with a critical, ethical mindset, asking, “What is the greater good?” while also remaining cognizant of business and stakeholder concerns. It’s our job to ensure our companies and CEOs not only keep up with the ethical transformation happening in our world today, but respond to it in a way that serves both the larger good and the long-term health of the company.

To accomplish this, it’s incumbent upon CECOs to actively elevate their roles in these decision-making moments to the executive table. CECOs who remain on the sidelines or settle for being siloed will not have the leverage to make big decisions when it counts. Thankfully, this shift is already happening: A survey conducted by Convercent and Ethisphere found that in 2017, 47 percent of CECOs indicated they spoke with their CEOs more than once a month, and 49 percent reported they are almost always or regularly involved in strategic decisions.

This kind of through-line is critical in demonstrating the value of ethics as a business item and its impact across every department. If you comport yourself as an executive advisor, leadership will begin to see you as a trusted partner with critical insights rather than a legal box to check. The CEO may still get the press credit for taking a bold public stance, but if they come to you for advice and collaboration, you’ve done your job well.

These new expectations are tricky to navigate. We aren’t all experts in every issue that may arise, so it can feel daunting to enter the conversation (and frankly easier to take a quiet back seat). Ultimately, though, these moral issues are what the “ethics” in CECO is all about. We are the navigators for our company in these situations, so don’t be afraid to take the helm and speak up.

Katie Smith is chief compliance officer at Convercent, which produces corporate compliance management software that helps companies integrate and report on compliance risks, cases, disclosures, training and policies.