Corporate Compliance and Hierarchy: Managing Misconduct

Prime examples of the unfortunate truth and devastating facts and consequences of scandals can be found in the media all too frequently nowadays, such as the recent events at the Syracuse and Penn State universities. However, as upsetting as these events may be, ethics and compliance individuals can find valuable lessons to take away from these stories and apply them within their own organizations.

The fact is that individuals who are highly accomplished and have a long history of good, professional relationships tend to develop a sense of invulnerability when it comes to committing such unlawful and heinous acts as those illustrated by the Penn State and Syracuse scandals. The truth of the matter is quite contrary. No one is invincible. This is becoming even truer with the increased popularity and availability of video and camera phones, where documenting someone's infractions is as easy as reaching into your pocket, making exposure of any dishonest activity a guarantee. This fact should be taken as a warning to all white collar criminals. However, it is high time for compliance and ethics departments to begin taking steps to prepare for the potential eventuality of such breaches.

At the outset of the previously mentioned university scandals, the initial responses from those being accused was one of total denial, and these claims were backed by the individuals' coworkers, who vouched for their integrity and good standing. These situations also frequently occur when such events take place within a corporate environment. The important thing to keep in mind here is that sometimes people are not entirely what they seem. Good people can do bad things. The reverse can be true as well, being that bad people can do good things.

The fact is that, wherever loyalties may lie, or whatever preconceptions there may be attached to an individual, it is imperative for compliance and ethics professionals to maintain a sense of neutrality and objectivity when it comes to investigating any accusations. While they should not be entirely relied upon, an individual's character and loyalties within the organization should be taken into account, but should also not become a hindrance. A careful balance must be struck when such potentially volatile situations arise, to ensure that the facts are viewed impartially. In order for this to be done systematically and efficiently, procedures should be in place before such issues occur. Also, if and when necessary, these processes should have preplanned punishments in place.

Administrators and managers are often all to ready to take credit for the high performance of those under their supervision. Conversely, these same leaders have a tendency to shirk any responsibility and deny knowledge when one of their employees is found to be involved in any illicit or fraudulent activity. To help regulate such issues over the long term, a scorecard system can be implemented using a few crucial compliance and ethics parameters as a means of allowing administrators scrutinize the conduct of those beneath them. Taking note of such well publicized scandals as the Penn State and Syracuse affairs can be an insightful means of planning for the future in order to avoid similar issues within corporate organizations.