For decades, companies have been writing codes of conduct, but with the growing adoption of social media, companies' programs are now evolving faster than ever before. In fact, governance of social media is one of the fastest-changing areas in corporate codes of conduct, as companies are becoming more sensitive to seeing an employee go online and disparage a client, expose confidential material or make false representations about a product.
So, what are the ways companies can improve the effectiveness of their code programs with respect to social media? How can companies strike a balance between encouraging communication, while also mitigating damaging comments on social media?
Mark Rowe, member of the Advisory Services Practice at LRN, a corporate culture and ethics advisory firm, sat down with InsideCounsel for an exclusive interview to answer these tough questions. Rowe currently advises and supports partner organizations of activity involved in building and sustaining integrated Ethics & Compliance (E&C) programs. In addition, he helps partners align people and process to drive principled performance throughout the enterprise and serves as a subject matter expert for LRN’s development of partner solutions, including an innovative E&C effectiveness self-assessment tool, various Ethics & Compliance Alliance knowledge resources and tools, and educational assets.
“Much of my work at LRN has involved reinventing codes of conduct as values-based, robust foundations for effective ethics and compliance programs,” he told me. “The emergence of social media has in many ways underlined the hyper-connectedness and independencies associated with globalization. Companies can best respond to this global dynamic, balancing risks and opportunities, by acknowledging that values drive behaviors which drive outcomes—which means the values had better be sustainable, rather than situational.”
Lately, Rowe has seen an accelerated evolution of corporate codes of conduct, which has been noticeable in the aftermath of the financial crisis. He said, “Before that, most companies had moved beyond dry, dense, legalistic documents to codes that were more interesting to look at and easier to read. Yet challenges persisted in engaging employees and influencing their behavior in meaningful, sustainable ways.”
Too often, codes still came across as a defensive posture on the company’s part and missed opportunities to establish business relevance and contribution to the bottom line. In the past five years, Rowe has seen more companies reinventing the orientation, design, and content of their codes. Many lessons have been learned that are contributing to this evolution. First, companies have learned that a rules-based compliance focus cannot by itself compel desirable human behavior and foster ethical organizational cultures. “Leading codes now connect with readers at a humanistic level, focusing attention on risks, expectations, and guidance through the lens of shared values and purpose, which helps employees to understand why the right behaviors matter,” he explained.
Secondly, culture counts, as codes of conduct must acknowledge the symbolic and practical roles they play in helping to shape culture. He added, “It might be said that when it truly reflects what a company stands for, aspires to, and expects of its people, the code is ‘the company’s culture written down.’”
Thirdly, a company’s code must be relevant in day-to-day operations, enabling smart choices and positive interactions that drive success. And, finally, the evolution of codes of conduct is being driven by the emergence of new sources of legal and ethical risk, the need to counter the increasing sophistication of bad actors in established risk areas, increasingly aggressive enforcement, and the imperative of promoting internal reporting of misconduct.
According to Rowe, the key elements of an effective code of conduct are:
- Begin with a message from leadership that is authentic and compelling, which sets the expectations for how things are done at your company;
- Adopt a clear writing style appropriate to the audience and an inclusive voice which uses “we” and “us” in preference to “you” and “your;”
- Play off a unifying thematic concept that is original and uniquely connected to the organization’s culture and identity;
- Connect readers to a sense of higher organizational purpose that is focused on creating value in the company’s larger societal context;
- Give prominence to the organization’s values;
- Position itself as a business resource rather than simply a compliance document;
- Explain the responsibilities that everyone in the organization shares to behave consistently with the code while also setting out the special responsibilities of leaders to model ethical conduct and maintain an operational focus on doing business the right way;
- Detail the resources available to seek advice on ethics and compliance matters, report allegations, or raise concerns;
- Emphasize a zero-tolerance policy on retaliation against anyone who raises a concern in good faith;
- Address the full range of ethics and compliance topics that are relevant to the organization’s business;
- Organize content logically in a way that promotes usability and ease of navigation; and
- Contain multiple learning aids and decision-making tools and; Leverage thoughtful design and imagery to engage audiences.
The code itself is only the beginning, according to Rowe. ”As companies seek more ways of implementing and reinforcing their codes, they are turning to new delivery formats and blended learning strategies which mix media and communication channels and include experiential elements. Cost considerations, environmental concerns, and ease of distribution are favoring electronic channels while interactive eCodes engage today’s employees through video vignettes, wikis, blogs, pop-ups, and other dynamic content.”
So, how has the growing adoption of social media affected companies' code programs? Just five years ago, addressing social media issues in the code of conduct was not the norm, but today, without guidance, companies would be foolish. So, they have scrambled to keep up with the risk and policy implications of technological advances that have revolutionized the way organizations engage with each other, share information, and communicate.
“The profusion of social media has been a doubled-edged sword for corporations. It has enabled them to leverage their marketing and stakeholder engagement efforts exponentially, and to do so in real time. The unprecedented transparency that social media brings has served good corporate citizens well but has brought almost instant and widespread scorn on companies that have fallen below expected standards,” said Rowe.
Lately, social media governance has become very important in such a fast-changing area in corporate codes of conduct. The potential for legal liability and reputational harm created by social media usage are the most obvious reasons for companies to address social media in their governance programs.
Companies should have several priorities when addressing social media in the code of conduct, underlying policies and associated education, according to Rowe. First, they will need to have identified the applicable risks, based on their business, regulatory environment, and corporate use of social media. Secondly, social media should be addressed in a principles-based way so that the guidance given is relevant regardless of location. Thirdly, corporate policies will need to be aligned with the code, with any flexibility for local adaptation of details being balanced with the need for global consistency. Fourthly, companies should ensure that social media policies are integrated into day-to-day operations and culture. Fifthly, when companies have proprietary social media sites, it will be important to have a policy and process for monitoring the posts.