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Cave-ins

A couple of weeks ago, a senior technology executive called me and asked for compliance & ethics (C&E) advice.  This happens more frequently than you might think – friends have questions that they’re too embarrassed or afraid to ask the C&E folks at their own companies, and so they end up calling me.  For purposes of this post, we’ll call this friend “George.”

George’s question revolved around a conflict of interest disclosure that the internal audit folks at the company (which we’ll call “Acme”) where he works asked him to sign.  The disclosure asked the signer of the document to certify that Acme had never had a business relationship with a services firm that we’ll refer to as “Nadir.”  His choices were to check the box labeled “Yes, Acme has previously had a business relationship with Nadir,” or the box labeled “No, Acme has never had a business relationship with Nadir.”

George didn’t have the knowledge to affirmatively state that the company had never had a business relationship with the vendor in question.  His instinct was to check the box for “Yes,” and then explain why he checked yes in a descriptive paragraph.  Internal Audit was pressuring him to check “No,” saying that the disclosure form was a formality and that there would be no negative consequences to George if he just checked “Yes.”

Here’s the thing about my friends who have questions about C&E – when they pick up the phone and call me, they already know what the right thing to do is.  All I do is confirm that for them.  It got me to thinking, though, about the millions of employees out there with whom I am not friends.  Whom do they call for advice?  (I’m definitely not suggesting that they should all call me.)

George’s title at Acme is Executive Vice President.  As an EVP, he felt what he considered to be undue pressure from internal audit to do the wrong thing.  This is an assurance function that C&E normally thinks of as an ally.  George felt empowered enough to pick up the phone to reassure himself to resist internal audit’s nudging.  I wonder if our employees whose titles are something less senior than EVP feel empowered at all to fight back when someone tells them to do the wrong thing.  On my pessimistic days, I think the answer is a resounding, “No.”

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