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Business Ethics

Creating an Open and Non-Retaliatory

Emily Heard and William Miller

One of the major challenges in business
ethics today is creating a safe environment
where employees can raise concerns about
possible misconduct and wrongdoing.

Despite the creation of helplines and ethics
offices, creating a safe environment where
employees can raise concerns about possible
misconduct without experiencing retaliation is
still one of the least well developed elements
of most business ethics programs.
Organizations can face an up-hill battle in creating an open and
non-retaliatory environment.

Companies also must oppose cultural and historical barriers to
speaking up.

However, companies can effectively work against this resistance.

By implementing the seven keys outlined in this article,
organizations can start to build open and non-retaliatory
workplaces, and demonstrate to employees that it is safe to raise
International Business Ethics Institute
launched a study to investigate two

How can organizations create an open
environment that encourages the reporting of

How can organizations reduce retaliation?
7 key factors
The Institute has identified seven keys that
companies can implement to create an open
and non-retaliatory workplace.
Key 1: Foster an Organizational Culture that Values Open,
Two-way Communications

Corporate culture has a tremendous impact on how
quick employees are to communicate with an

Organizations must create a corporate culture where
dialogue and feedback are regular practice and
this should extend to every level of employee
throughout the organization.

Such a culture can build the foundation of an open
problem-solving environment, demonstrate to
employees that it is safe to raise concerns, and
exhibit that the organization takes retaliation
As a first step, organizations should conduct
an internal assessment to diagnose and
rectify the cultural barriers that prevent
employees from speaking up.

The assessment should encompass a
representative cross-section of the
organization and should include a mix of
quantitative and qualitative research
The assessment should examine such issues as:

Commonness of misconduct observed by
Tendency to report misconduct
Reasons for not reporting misconduct
Usage and perceived effectiveness of the channels
available to report wrongdoing
Perceptions of retaliation

The assessment will identify areas that companies
need to address and to promote an organizational
culture that values speaking up. Companies should
then resolve company-wide challenges, as well as
regional or functional challenges.

After the survey is complete, companies
should organize focus groups and conduct
interviews with employees to gain more
insight into the general issues identified in the

It is important that the conversation be
framed in simplification so that employees will
provide more straight feedback.
Key 2: Create Effective
Communication Channels

All organizations should have multiple
resources in place through which employees
can seek guidance and raise concerns.

While it is recommended that organizations
encourage employees to go to their manager
first, having multiple channels in place
empowers employees by giving them the
opportunity to select the method with which
they are most comfortable.

While many companies will already have multiple
channels in place, it is crucial that employees know
how to use each channel.

It is also essential that organizations ensure that
these channels are operational and effective.

For example, if a company uses an external helpline
vendor, it is very important to conduct test calls to
assess the effectiveness and quality of service
provided by the helpline operators. Test calls should
be conducted in several languages in order to
monitor the consistency of the service for
international employees.
Information Richness of
Communication Channels
Formal reports,
Online discussion
groups, groupware
Live speeches Videoconferences
Memos, letters Electronic mail Voice mail
Key 3: Develop Effective Standards on Raising Concerns
and on Discouraging Retaliatory Behavior

Having effective standards on raising concerns and retaliation can help demonstrate that
an organization values open communication. Corporate standards on raising concerns and
retaliation should apply to the entire workforce.

For these resources to be effective, standards must:

Allow employees to understand that the company is open to hearing reports of

Demonstrate that the organization takes employee concerns seriously

Explain the processes and procedures for telling misconduct to the company

Provide a list of resources for employees to contact

Let employees know what to expect when raising concerns

Send the message that the company does not tolerate retaliation
Key 4: Implement Dedicated Training for All Employees
on Raising Concerns and Retaliation

Recent surveys show that just over half of employees
that observe misconduct actually report the

Often, employees believe no corrective action will be
taken, fear retaliation, or see reporting as outside
their area of responsibility.

Providing dedicated training on raising concerns and
retaliation not simply including it as part of general
ethics or code of conduct training provides an
opportunity to address employee hesitation to report
misconduct, educate employees on how to raise
concerns, and address fear of retaliation.
It is important to deliver the training to the entire workforce.
Dedicated training can be offered as classroom training or e-

Some of the elements that training should address include:

1. Discuss reasons to report concerns

2. Show that speaking up have positive impact

3. Discuss where and how to report misconduct or seek guidance.

4. Outline what to expect when raising a concern

5. In order to allow employees to understand how to incorporate
lessons from the training into daily situations and demonstrate the
relevance to their work, it is important to integrate interactive
exercises in the training (e.g., scenarios, role-plays).
Key 5: Implement Dedicated Training for Managers on
Creating an Open Environment and Addressing Concerns
In a recent survey published by KPMG, 81% of employees
indicated that they would most likely report misconduct to their
supervisor or another manager.

Yet, managers are often not prepared to listen to and follow up
on employee concerns.

Accordingly, organizations should offer dedicated training to
managers on how to create an open environment, as well as how
to listen to and follow up on employee concerns.

Due to the important role that managers play daily and in
relationship to raising concerns, this is an essential component to
developing an open and non-retaliatory environment.
Key 6: Implement and Maintain Problem-Focused
Processes for Investigating and Resolving Concerns
When handling reports of misconduct and conducting
investigations into wrongdoing, companies have a tendency to do
one or both of the following:

1. Shoot the messenger Rather than focusing on resolving
the misconduct, organizations retaliate against the individual that
identified the report.

2. Emphasize punishment of the bad apples while failing to
correct the root-cause of the problem At times, companies can
be so focused on punishing the employees responsible for the
wrongdoing that they fail to identify a systemic cause or rectify
the actual problem.
Companies should make sure that the investigation
and follow-up processes that they have in place
focus on actually solving the problem.

This will contribute to creating an open and non-
retaliatory workplace by demonstrating that the
organization takes reports seriously, showing that
action is taken to address wrongdoing, and
illustrating that employees will not suffer retaliation
for speaking up.

One way in which companies can ensure they have
problem-focused processes is to assess and
strengthen their existing investigation processes.
Key 7: Establish an Effective Ongoing Communication

Ongoing communication is an important tool in creating an open

Messages should be sent continuously and address the following:

1. Repeat that raising concerns is valued

2. Remind employees about the channels available for raising concerns

3. Illustrate that action is taken to address the problems

4. Organizations should use a variety of methods to communicate these
messages. Using Scrubbed Reports of Actual Cases is one effective
method of communication. Such reports include descriptions of actual
wrongdoing and the action taken by the company to solve the problem.
Such an approach illustrates that misconduct is taken seriously.