Catriona Paisey reports on the key findings from her Speak Up? Listen Up? Whistleblow? research funded by ICAS.
ICAS’s business ethics initiative, The Power of One, emphasises that the importance of trust in business must not be understated. Trust is the key to the long-term sustainability of organisations. To ensure trust, there is a need for organisations to engender an ethical culture where the integrity of the organisation’s employees is seen to transcend all other business objectives and strategies.
‘Speak up’ mechanisms within organisations are vitally important – encouraging and empowering individuals to have the confidence to promote good behaviour, influence others, and ‘speak up’ if they encounter ethical issues.
The Power of One publication ‘Personal Responsibility and Ethical Leadership’ states:
“Individuals, and particularly Chartered Accountants (CAs), should have the confidence to speak out and influence the culture of organisations in which they work.”
“Robust challenge must be seen as healthy and positive in relation to organisational culture. People need to take the lead and be able to speak their mind, within reason, for the good of the organisation. ‘Challenge’ should not be resented”.
Individuals need to ‘speak up’ if they have concerns – but speaking up is not always easy or appreciated, and will be ineffective if nobody listens.
This article sets out some of the key findings from the research which investigated, through a survey supplemented by interviews, the experiences of ICAS Members when encountering ethical dilemmas. It also offers some suggestions to individuals and organisations for tackling ethical issues based on these experiences.
Ethical dilemmas faced by CAs
- CAs are likely to encounter ethical dilemmas throughout their careers. Two-thirds of CAs said they had encountered an ethical dilemma, either of a technical and/or behavioural nature, at least once during their career.
- Technical dilemmas reported by CAs relate mainly to accounting irregularities, fraud, theft and bribery, taxation, auditing, bonuses, incentives and executive pay.
- Behavioural issues relate mainly to bullying, pressures from managers and clients, and work pressures relating to workload or work-life balance issues.
- CAs report that, in the main, there are a variety of support mechanisms in place in professional practice, and there are other people to consult, but they often feel more isolated once they leave professional firms to work in other sectors.
- These pressures are heightened if the CA is the only professionally qualified person in the organisation. As one CA said, “It can be a lonely job sometimes”.
When encountering an ethical dilemma, most CAs speak up internally within their organisations, but with varying degrees of success.
What CAs said:
- Speak up policies exist in approximately two-thirds of organisations where CAs work but details of policies are not always well communicated.
- Smaller organisations and smaller accounting practices are less likely to have speak up policies.
- Although speak up or whistleblowing hotlines may exist, most CAs speak directly with people in their organisations to try to address issues.
- Whistleblowing externally is therefore generally rare and a matter of last resort.
- Outcomes vary. Sometimes CAs can effect change but some CAs have been victimised, lost their job or have suffered severe stress. The challenges of speaking up therefore need to be recognised and managed.
If someone speaks up but nobody listens, then the speaking up will not be effective. Likewise, if someone listens but then does not act on what they have heard, then the person speaking up will feel dissatisfied. Effective listening therefore involves listening and then acting on what has been heard by investigating the issue.
What CAs said:
- Few organisations where CAs work have specific Listen up! policies but around three-quarters of CAs believe that they work in organisations where people listen, at least at a basic level.
- Training in listening is not widespread and needs to be improved.
- CAs often find that they have colleagues who listen on an individual level but sometimes they do not regard the wider organisation as being one where listening is embedded as part of the culture.
CAs’ thoughts on speaking up and listening as key parts of effective organisational culture
- Being able to speak up is an important part of an effective organisational culture, allowing issues to be dealt with at the earliest opportunity before they escalate.
- Speaking up needs to be normalised and viewed as beneficial for the organisation rather than being regarded as troublesome.
- Listening is important but needs to lead to action. As one interviewee said, if people think that it is a waste of time to speak up because no action will follow, “that’s almost worse than detriment because then the apathy seeps through”.
What advice do CAs give to individuals to help them deal with ethical dilemmas?
- Be aware that speaking up can be challenging and that tenacity and resilience are required.
- Consider carefully how to raise an issue for maximum effect. Thinking carefully in advance rather than speaking in the heat of the moment is advised.
- It is better to deal with issues at the earliest possible stage.
- Do not tackle an issue alone. As one CA said, “The biggest mistake you make is the one you make on your own”. CAs advise speaking to a trusted colleague or friend.
- Develop a network and use that network to discuss issues with a trusted individual.
- Always keep an evidence trail of conversations, emails and documents. Keeping a diary of meetings and noting down a summary immediately afterwards can be helpful.
- Before taking a new job, research the organisation carefully. With hindsight, some CAs said that the signs were there if only they had looked for them.
What can individuals do to promote more effective Speak up! and Listen up! cultures?
Organisations need to engender a supportive and collaborative environment where people are encouraged to speak up and are willing to do so without fear of retaliation or detriment.
- If your organisation has a policy, ensure that colleagues know the details of the policy.
- If there is no policy, introduce one. Size of organisation is no barrier to setting out expectations and protections around speaking up.
- The importance of listening needs to be emphasised, with consideration also being given to any training requirements.
- Reinforce the policy by stressing to colleagues that speaking up is valued, that they will be listened to, and that issues are best tackled at an early stage.
- Listen when others speak up – give people attention and listen not only to what is said but to what is not said and how issues are raised.
- Act on what has been heard. Sometimes an investigation will show that there are no issues, sometimes people will be mistaken, but they need to know that matters will be investigated so that issues of concern do come to light.
- Where possible, be transparent about outcomes of investigations, provide evidence of change, so that people will have confidence that concerns are taken seriously and valued.
- Use real examples, on a no names basis, to allow people to see the culture in action.
- If possible, keep ethics separate from human resources so that there is more independent oversight.
- Consider leadership style. Most employees take their behavioural cues from their immediate line managers. Think of a leader whose style you respect and reflect on whether there are lessons to be learned for your own style.