Raising the bar for integrity, lowering the hurdle to misconduct reporting
Muel Kaptein is professor of business ethics and integrity management at RSM Erasmus University in Rotterdam, the Dutch port and city famous for its can-do attitude and no-nonsense approach. During his twenty-five years of teaching here, he has seen the field of business ethics evolve from a subfield of moderate importance into the highly integrated major field it is today.
This shift is also reflected in the present programme, which now brings together the themes Leadership, Sustainability and Governance. It is mandatory for all second-year business administration students at the RSM. Have these students evolved too, just like the programme?
“Yes, today’s students really are a new breed,” Muel Kaptein confirms. “The transformation of their mindset is unmistakable. Today, once they enter the classroom, they have already done a good deal of thinking about their own values, and they are pretty candid about them too. They look for authenticity in everything. In themselves, but also in the companies they would like to work for after graduation. Scoring the highest-paying job is no longer their sole objective. Nowadays, a potential employer is also scrutinised according to its societal position, its reputation, its values and its ethics.“
What if bribery is the done thing?
Today’s business students are indeed a demanding bunch and Kaptein enjoys challenging them accordingly in return. “Right and wrong corporate conduct isn’t always a black and white thing. In special group sessions about dilemmas, I put their ideas to the test. Suppose that you have a thriving business in some far-away country, where bribes are deeply engrained in the local economy and social fabric. What options to deal with that situation do you have in the first place? Which one would you choose? Why? What consequences are you prepared to accept?”
Am I my brother’s keeper?
Muel Kaptein loves a good debate and in his lectures he pulls the students further and further out of their comfort zones. “First, I check with them whether they, in the safety of this classroom, agree that corporate misconduct is off-limits. Normally, they are quickly on the same page; no surprises there. But then I ask them: why do the statistics still show that a few years from now, a sizeable percentage of youk from now, a sizeable percentage of you will actually be involved in misconduct yourselves and be doing really bad things in the outside world?” In the lively discussion which typically follows, Kaptein proposes to his students that, with due respect for all their good intentions, they tend to underestimate the bigger picture. Corporate life is less simple than they think. As he illustrates: “What kinds of power exist in and around an organisation? How can you understand these forces? How can you arm yourself with knowledge and ability in order to deal with them? And: to what extent are you responsible for what other people do? There’s a wealth of theories and insights available when you get to that fundamental question.”
Managing misconduct is managing complexity
Kaptein identifies several academic disciplines which are all relevant when it comes to the broad issue of corporate misconduct and the way a company and its employees can and should assume responsibility for dealing with it when it is discovered. Firstly, he explains, there’s the ethical side: how major is the offence? Are you the only one who knows about it? Could you act to prevent further damage? Secondly, there is the socio-psychological aspect: how to deal, for instance, with the ‘bystander effect’ of people witnessing corporate misconduct not stepping forward because they assume others will do so? Thirdly, there is the managerial aspect: what exactly is a virtuous company and what does that mean for its board? How can management create an environment in which employees accept responsibility, while doing their part too? Finally, there is the cultural issue. Kaptein illustrates: “In Asia, there is a lot of respect for the boss. If you witness any type of misconduct, you are not likely to bypass your superiors. In Latin America, the cultural climate is different again: here, if you observe any misconduct, people tend to question whether anything will be done with their report at all. And they are also concerned about possible personal repercussions. Management must take all of these considerations into account.”
Anonymous reporting: the new norm?
In this far-from-perfect world, Kaptein is certain that misconduct reporting will stay on the agenda. He actually expects it to come increasingly naturally to younger generations: “They have less respect of hierarchies or fear for the boss. They like to identify themselves with the greater good, have strong opinions about what is right and what is wrong, and are quick to voice their concerns on Facebook or Twitter. Having grown up with social media, they think nothing of using them anytime, anywhere, also to engage and disengage with others.” All are tendencies which, in Muel Kaptein’s view, are conducive to reporting misconduct whenever it is perceived.
He agrees that the option to report in a fully anonymous way can be an additional facilitating factor: “In spite of all these liberating trends, employees may of course still be worried to come forward when serious issues materialise. The possibility to report anonymously can certainly reduce such concerns.” Moreover, he predicts that the younger generations, in particular, will feel increasingly comfortable about anonymous reporting: “World War II, with all its practices of anonymous denunciation, is fading into the distance. Certainly for young people, that era is less and less of a reference.”
In combination with other future trends as identified by Muel Kaptein (see table), this no doubt makes for interesting times, not to mention a breeding ground for full integrity management. Does he have any tips for the organisations which will ultimately employ his students? “I do. Be sure that you make ethics, integrity – and yes, misconduct reporting also – a key topic on the introduction programme for every new employee. The first 100 days set the stage: communicate your programme and your facilities as clearly as possible, especially in that first crucial period. But don’t limit yourself to a flyer or intranet site. Make it a personal affair right from the start. Have the manager put the topic on the agenda on day one, at the first meeting with his new recruit. You never get a second chance to make a good first impression.” Sounds like the Rotterdam way of going about it.
Six future trends in misconduct reporting as predicted by Muel Kaptein:
- Higher overall acceptance of misconduct reporting lines and of anonymous reporting.
- More lines opened for external parties (suppliers and other stakeholders).
- More direct channels (direct employee-to-supervisor communication options).
- Higher demand for systems which allow both messenger and recipient to obtain advice before entering a new response.
- More responsibility for the messenger (e.g. via involvement in the event of follow-up).
- More integrity lines by and for specific self-regulating communities (trade organisations, small business networks).