Organizational Trust: What It Is, Why It Matters, and How ... • At the organizational level, trust...

Organizational Trust: What It Is, Why It Matters, and How Compliance Programs Can Foster It

Barbara Brooks Kimmel, CEO| Trust Across America, Trust Around the WorldCarrie Penman, Chief Risk & Compliance Office | NAVEX GlobalMatt Kelly, CEO | Radical Compliance

Copyright NAVEX Global, Inc. All Rights Reserved. |

Speakers

Barbara Brooks Kimmel

Carrie Penman Matt Kelly

CEOTrust Across America, Trust Around the

World

Chief Risk & Compliance OfficeNAVEX Global

CEORadical Compliance


Agenda

• Why Is Organizational Trust Important?

• How Does Trust Manifest in the Individual Enterprise?

• The Building Blocks of Trust Within the Organization


Why Are We Talking About Trust?

Because trust in organizations is in scarce supply

these days.



From the 2020 Edelman Trust Barometer

• Globally, public’s trust in organizations is at 56 (1 to 100 scale)

• Trust in business, worldwide: 58

• Trust in business, United States: 50 (down 4 from 2019)

From Public Affairs Council, 2018

• Only 7 percent believe CEOs have high ethical standards

• Only 48 percent of millennials believe business behaves ethically


Why Are We Talking About Trust?How people see business: competent, but not ethical

*2020 Edelman Trust Barometer

Why Are We Talking About Trust?The exception: Your own employer

• 76 percent trust their own employer (Edelman)

Distrust breeds disengagement;

Disengagement breeds…

• Misconduct

• Inefficiency

• High turnover



A double-edged sword for business

• High-trust businesses can operatein more efficient fashion

• More agile, responsive, to changing risk conditions

• Must work hard to hold trust, because employees are more cynical about everything else

• Employees expect you to support their concerns, too


How Does Trust Manifest in the Enterprise?

Benefits of High Trust: Summary & Studies

• Elevate employee engagement and retention

• Reduce workplace stress

• Encourage innovation

• Improved stakeholder relationships

• Reduce costs and increase profitability


Defining Trust & a Few “Work Arounds”

It’s time for us to get on the same page about what trust is and what it is not.

• Trust cannot be built internally through external public opinion polls like Edelman. In fact, that’s not trust at all. It’s perception of trust.

• Trust is not built through rules, regulations or check the box practices.

• Trust is not built by loading up corporate communications with trust words du jour (this year it is “Purpose” while last year it was “CEO activism.”

• Trust is a relationship. It takes two. It doesn’t happen unilaterally; it’s not real until a trusting party meets a trustworthy party.

• At the organizational level, trust must be built one stakeholder at a time.

• Organizations don’t build trust — they can only facilitate, or hinder, inter-personal trust. It’s up to the people who work for them, and that begins with leadership.

Trust Across America defines trust as “The outcome of principled behavior.”(Trust is an outcome, not an input)


What’s Holding Trust Back

At the organizational level:1. Only the CEO can “own” trust to communicate it effectively. It can’t be delegated.

2. The CEO has not considered trust as a proactive strategic imperative

3. Due to lack of concise definition and attention, trust is viewed as a soft skill or taken for granted, and the impact of low trust has not made the “risk” list

4. No ownership, no budget

5. The crisis of the day takes priority

At the team level:1. The greatest hurdle is acknowledgement that trust needs improving.

2. Having the right tools and allocating time to fix it.


Survey OverviewWhich principles do you believe are the weakest in your workplace?

Trust Principles Truth We are honest and humble – we put the truth ahead of personal or professional gain.

Accountability We hold one another accountable – we each take responsibility without regard to level or role.

Purpose We engage our stakeholders to build shared purpose — we avoid short term “wins” that undermine future success.

Integrity We do what we say — our everyday actions and talk are consistent.

Notice We seek out and listen to diverse perspectives — every voice can matter.

Talent We reward moral character — we hire and promote in alignment with our purpose and values.

Openness We are open and ready to learn — we can be vulnerable and not have all the answers.

Transparency We reject hidden agendas — we are transparent wherever and whenever possible.

Respect We respect each other — we encourage questioning and create a “zero fear “ environment where innovation can thrive.

Understanding We celebrate our successes — we acknowledge and examine our failures with empathy and learn from both.

Safety We call out unethical behavior or corrupt practices — we make it safe to be honest with no fear of reprisal.

Tracking We define and scorecard our performance against our value and values — we measure both.


Survey ResultsWhich principles do you believe are the weakest in your workplace?

Today’s Attendees Compliance Team


Survey Results

0% 10% 20% 30% 40% 50% 60%

Trust

Accountability

Purpose

Integrity

Notice

Talent

Openness

Transparency

Respect

Understanding

Safety

Tracking

Today's Attendees Compliance team

Which principles do you believe are the weakest in your workplace?


Addressing the Factors of Trust

Address potential weaknesses by talking about them and modeling good behavior.

For Example:

1. Do we hold people accountable in a principle-centered rather than punitive way? If not, how do we change this?

2. Do our accountability discussions demonstrate that we are on the same team? If not, how can we get them to show collective responsibility?

What would the trust profile of your team look like? It may not be what you think.


Difference Between Acting Something & Being Something


Translating Trust to Compliance – What Role

Do We Play?


Translating Trust to Compliance – What Role Do We Play?

• Compliance is in the people business and people run on relationships

• Organizational relationships are not one size fits all:

• Employee to employee

• Employee to leadership

• Leadership to employee

• Business to customers and suppliers

• Business to community

• We can translate trust to our role in organizational culture


Translating Trust to Compliance: This Should Resonate

Trust Principles Truth We are honest and humble – we put the truth ahead of personal or professional gain.

Accountability We hold one another accountable – we each take responsibility without regard to level or role.

Purpose We engage our stakeholders to build shared purpose — we avoid short term “wins” that undermine future success.

Integrity We do what we say — our everyday actions and talk are consistent.

Notice We seek out and listen to diverse perspectives — every voice can matter.

Talent We reward moral character — we hire and promote in alignment with our purpose and values.

Openness We are open and ready to learn — we can be vulnerable and not have all the answers.

Transparency We reject hidden agendas — we are transparent wherever and whenever possible.

Respect We respect each other — we encourage questioning and create a “zero fear “ environment where innovation can thrive.

Understanding We celebrate our successes — we acknowledge and examine our failures with empathy and learn from both.

Safety We call out unethical behavior or corrupt practices — we make it safe to be honest with no fear of reprisal.

Tracking We define and scorecard our performance against our value and values — we measure both.


Accountability/Talent: Hold People Accountable Regardless of Role or Performance Level• Eliminate the “Say / Do Gap”

• “Talking the talk” without “walking the walk” in any aspect of your program, undermines your program

• Policies without practice are null – or worse

• Actions need to have fair and equitable consequences

• “Special rules for special people” undermines trust

• Consequences must include impact on promotions – especially for high level personnel

• Employees and customers need proof that trust is real


Integrity: Tone from the Top Is Relative

• Tone from the top is key for creating workplace cultures of trust and integrity

• The “top” is often an employee’s immediate supervisor. This might be a VP, or it might be a first-line manager new to their role

• All managers at all levels need training

• A manager who does not know how to hear and respond to an employee’s issue jeopardizes enterprise-wide trust

• Managers should be educated on how to:

• Have hard conversations

• Hear and manage incidents reported by employees

• Identify and resolve peer-to-peer retaliation, (not to mention manager retaliation!)


Safety/Transparency: Speak-Up Cultures Only Exist Within Listen-Up Cultures

Speaking-Up Pays• 50% of uncovered corruption schemes are

detected by tip (whistleblower report) *

• Increased hotline usage is associated with:

• Fewer material lawsuits

• Fewer external whistleblower reports

• Fewer negative news stories

• Greater return on ROA **

However• It’s estimated 75% of individuals who get

harassed at work don’t file a complaint *

• 40% of employees indicated they’ve experienced retaliation after reporting misconduct **

• Organizations are missing 92% of internal reports when only offer a hotline option ***

* Select Task Force on the Study of Harassment in the Workplace, U.S. Equal Employment Opportunity Commission

** Global Business Survey, Ethics & Compliance Institute

*** Upcoming 2020 Ethics & Compliance Hotline Benchmark Report

* 2018 Global Study on Occupational Fraud and Abuse, Association of Certified Fraud Examiners

** Hotlines & Headlines: Examining the Relationship Between Hotline Reporting and Corporate Reputation

https://www.eeoc.gov/eeoc/task_force/harassment/upload/report.pdf

https://www.ethics.org/wp-content/uploads/2019/01/Global_Business_Ethics_Survey_2018_Q4_Final.pdf

https://www.acfe.com/report-to-the-nations/2018/default.aspx

https://www.navexglobal.com/en-us/resources/white-papers/hotlines-headlines-relationship-between-hotline-reporting-corporate-reputation?RCAssetNumber=5845


Safety/Transparency: Speak-Up Cultures Only Exist Within Listen-Up Cultures• Employees will feel invested when they feel

invested in

• Employees will believe something will be done when they report when the org shows a track record of responding to, investigating and resolving reports

• Employees will report more when they have reporting avenues that they trust and feel comfortable with

• Employees will report more when they do not fear retaliation at any level of the organization

“Speak-up culture” puts the onus for incident and issue

reporting exclusively on employees. “Listen-up culture” brings in the responsibilities of management and senior staff.

- Bob Conlin, President & CEO, NAVEX Global


Tracking: Trust but Verify…and Document

• The trustworthiness of your third parties color the trustworthiness of your organization

• You might trust your third party partner, but will a regulator?

• Due diligence and ongoing monitoring is key to ensuring business relationship trust is consistently verified; documentation is key to defending that trust

Testing Your Organizational Trust• Great, you have a hotline, but do people speak-

up? • Your organization lives up to its ethical standards,

but does your third party supply chain? • You have an anti-harassment policy, but do you

have a culture of tolerance?• Do you have a rules-based program or a

risk/culture-based program?• Trusting cultures are more efficient

• How does your organization respond to crises –global, environmental, or personal? • These are the accent points at which employees

and customers evaluate their level of trust


Final Thoughts

Stay tuned! We have a panel coming up!

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