If there is one lesson that compliance officers know well, it is to learn from others’ mistakes.

The mess that the NFL finds itself in following an act of domestic violence by Ray Rice of the Baltimore Ravens seems to grow worse by the day. The botched investigation of the incident by the National Football League and fumbled policy statements and penalties for cases of domestic violence are providing case studies for compliance departments on how not to handle such sensitive issues.

The release of casino surveillance tapes showing the star running back punching his future wife has triggered a Watergate-like wave of conspiracy accusations. What did Commissioner Roger Goodell know, and when did he know it? Why was Rice initially suspended for a paltry two games? 

The reputational hit the league suffered continues to mount amid new accusations of domestic violence by other players, paired with what appear to be the slightest of personal repercussions.

The NFL’s bad start to the season is not just a sports story. Beyond the national discussion of domestic violence it has inspired, there are also lessons that any business and its leadership can learn from.

The corporate world, like the NFL, has no shortage of men behaving badly. In many of these cases, transgressions go beyond the human resources office to land on the desk of compliance officers, top managers, and even the board of directors. In 2012, for example, Best Buy’s former chief executive Brian Dunn was fired after it was discovered he had a romantic relationship with a female subordinate. American Apparel CEO Dov Charney was shown the door after more than a decade of sexual harassment charges (what did him in had as much to do with sagging profits, however). Pinkberry severed ties with co-founder Yung Lee after he was accused of severely beating a homeless man. Bad things will always happen in corporate America. How an organization handles such misdeeds is a debate the Ray Rice fiasco should inspire.

Crack Into the Code

The NFL does indeed have a code of conduct that, in theory, makes it quite clear that personal problems and incidents off the field can lead to appropriate punishment. Critics, pointing to Rice’s initial two-game suspension, see that document as ineffective.

The mere existence of company policy is not enough to deter bad behavior or ward off the brand and reputational damage it can inflict, Shannon Walker, ?president, WhistleBlower Security, a compliance and ethics consultancy, says.  “You can have a code of conduct, but unless it is actually imprinted on the organization, unless it is acted on decisively and consistently, then it doesn’t really mean anything,” she explains.

Walker’s advice for the NFL: Revisit its code of conduct, embrace it, and make sure that every organization and person under its umbrella is committed to it. “Make sure everybody signs off on the Code of Conduct, from the commissioner to the team owners and presidents, down through management and the players,” she says.

“While the NFL has a code, do they really believe in it?” asks Jimmy Lin, vice president of product management and corporate development at The Network. “Are they talking the talk, but not walking the walk? It is a very good reminder for corporate organizations—just having a code is not enough without training and enforcement.”

“A code of conduct that goes in a book, onto a shelf, and is never spoken about again doesn’t do anybody any good,” Christopher Griffin, a member of the law firm Foley & Lardner’s Sports Industry Team. “The cultural changes that must occur within an organization to send the right messages about personal conduct and the impact it may have on the organization is something that has to be thought about and lived on a daily basis. It is not going to work if it is just top-down.”

No Star Players

Rice was among the most important players on the Ravens’ roster. The corporate world has its own star players, ranging from the residents of the C-Suite to frontline sales people. For a code of conduct to work, everyone must be treated the same. This lesson can be of particular importance to companies whose international reach places them at risk of a violation of the Foreign Corrupt Practices Act should it look the other way as bribes grease the wheels for a deal.

“While the NFL has a code, do they really believe in it? Are they talking the talk, but not walking the walk? It is a very good reminder for corporate organizations—just having a code is not enough without training and enforcement.”
Jimmy Lin, VP of Product Management & Corp. Development, The Network

Companies have to learn that moves to ensure short-term gains—whether on the gridiron or balance sheet—can backfire. “The longtime legacy of the business is not taken into consideration when you are making bribes and rewarding salespeople for getting the job done,” Walker says. “You are not thinking about the ramifications on the long-term culture and sustainability of the organization.”

“If you are in it for the long term, you have to have sustainable practices that are ethical and build a culture of integrity,” she adds. “Ultimately, it is about your reputation and mitigating risk. If you are allowing negative behaviors, you are going to have perpetually damaging incidents.”

That can be easier said than done when a company has to discipline a proven money maker. “Wow, this person sold a million dollars for us last year, if I don’t have that person, it is really going to hurt my revenues and bottom line,” Lin says of what is common corporate thinking. “They think about short-term dollars as a way of rationalizing things. How much of a penalty do I really want to enforce on this person?”

Leniency in these situations can be costly, even beyond the regulatory scrutiny illicit actions can attract. “If you don’t handle it properly, and don’t get rid of the person, you are sending the wrong message to those around the organization—that as long as you are a star player, we will give you a slap on the hand and you won’t really need to be held responsible,” Lin says. Just as happened with the NFL, “the issue keeps building and additional things happen.”

Even if a company doesn’t intend to treat employees differently when it comes to a code of conduct violation, that can be the consequence of an investigation that isn’t thorough or discipline that isn’t consistent. The NFL failed on both fronts in recent weeks and it appears that those in charge of the internal review of Rice’s off-field behavior either didn’t try to obtain the inside-the-elevator video  that showed the attack or, worse yet, it was intentionally kept from executives’ eyes to provide plausible deniability. A thorough investigation, in any compliance context, should never overlook such a crucial piece of evidence. The rule of thumb: leave no stone unturned, because eventually someone else is going to flip it over.

As for consistency in punishment, the NFL also dropped the ball. Rice was suspended for two games, then re-suspended “indefinitely.” Carolina Panthers defensive end Greg Hardy, convicted of domestic violence this summer, wasn’t suspended until public outcry grew too loud to ignore After being indicted by a Texas grand jury in Texas on a child abuse charge, Adrian Peterson of the Minnesota Vikings was suspended, un-suspended, and then suspended again in the span of roughly a week.

It took the Rice video and the ensuing brouhaha for the NFL to suggest more serious discipline for domestic violence. While that crime lacked a zero tolerance policy, illicit substance use was covered and Cleveland Browns wide receiver Josh Gordon was hit with a season-long suspension after testing positive for marijuana.

On the Field, Off the Field

The following is an excerpt from the National Football League’s Personal Conduct Policy.
Engaging in violent and/or criminal activity is unacceptable and constitutes conduct detrimental to the integrity of and public confidence in the National Football League. Such conduct alienates the fans on whom the success of the League depends and has negative and sometimes tragic consequences for both the victim and the perpetrator.
The League is committed to promoting and encouraging lawful conduct and to providing a safe and professional workplace for its employees.
Prohibited conduct
It will be considered conduct detrimental for Covered Persons to engage in (or to aid, abet or conspire to engage in or to incite) violent and/or criminal activity. Examples of such Prohibited Conduct include, without limitation: any crime involving the use or threat of physical violence to a person or persons; the use of a deadly weapon in the commission of a crime; possession or distribution of a weapon in violation of state or federal law; involvement in "hate crimes" or crimes of domestic violence; theft, larceny or other property crimes; sex offenses; racketeering; money laundering; obstruction of justice; resisting arrest; fraud; and violent or threatening conduct. Additionally, Covered Persons shall not by their words or conduct suggest that criminal activity is acceptable or condoned within the NFL.
Persons charged with criminal activity
Any Covered Person arrested for or charged with conduct prohibited by this policy will be required to undergo a consultation and additional counseling as directed. Failure to comply with the consultation and counseling (including being arrested for or charged with additional criminal activity during the evaluation and counseling period) shall itself be conduct detrimental to the National Football League and shall be punishable by fine or suspension at the discretion of the Commissioner.
Persons engaged in violent activity in the workplace
Every employee is entitled to a safe and professional workplace free of criminal behavior, violence and threats against personal safety. Criminal conduct in the workplace or against other employees is prohibited. Any Covered Person who commits or threatens violent acts against co-workers, regardless of whether an arrest is made or criminal charges are brought, shall be subject to evaluation, counseling and discipline, including termination of employment.
Source: NFL Players Association.

Take It From the Top

“Star players” at all levels of an organization, rather than benefitting from lenience, should take a leading role in establishing company culture. “You have to not only avoid and not engage in the wrong behavior, you need to take it to the next level and encourage, teach, and mentor the correct behaviors,” says. “Whatever traction you have gained is almost immediately destroyed if there is any suggestion that rules are selectively applied. If you have rules, there really has to be zero tolerance regardless of your other positive attributes.”

As the NFL controversy illustrates, companies can no longer take a stand that what happens outside the office is a personal matter and beyond their reach, Griffin, who previously chaired the American Bar Association’s commission on domestic violence and worked with the NCAA for 12 years on its enforcement activities, says. “A corporate entity that says whatever you do outside the office is of no interest to us, whether positive or negative, is going to be a much different place to work than one that says otherwise.”

The flipside, he adds, is that companies can strengthen their compliance message by also rewarding good behaviors. “No punitive policies will be nearly as valuable unless the corporate entity also has a culture of recognizing achievement and initiative,” he says.

Live and Learn

Walker is hopeful that as the NFL and other sports leagues look to improve their culture, more will turn to what is a staple of the corporate world—whistleblower hotlines. She has reached out to numerous sports teams about putting these programs in place. Some, like the NHL’s Dallas Northstars, were receptive; most were not. “They think they are fine, but these situations that keep happening show that they are not.”

The NFL, like many other businesses, will find it has to be even more receptive to public pressure and outcry, Griffin says.  “If you get it wrong, you have to respond to not only people within the organization, but those outside it who have opinions on what is proper in a corporate culture than what should not have occurred,” he says.

“It happens every day that something happens in a corporation and there is community uproar. Companies don’t have to be completely reactive,” says Walker, “but they need to be sufficiently open-minded to listen to those voices and follow what they say when it is appropriate.”