Guido Palazzo, why is it so hard to do the right thing?

Guido Palazzo, the esteemed business ethics professor will join the Nordic Business Ethics Day on April 29th. Guido is a well known advocate for integrating business ethics with leadership, and for challenging leaders. Doing what is right is not always easy, and more often than not we fail. In relation to misconduct Guido commonly asks leaders to ask themselves: I am the one misbehaving or am I the reason for why an employee is misbehaving? We are sure Guido will challenge and inspire us in April.

To warm up for the Business Ethics Day we asked Guido a few questions:

The main objective of the ethics and compliance work is to make sure that employees do things right. Guido, what are the most common pitfalls companies make when implementing their compliance programs?

“I would say that there are two main things that companies and ethics & compliance officers should watch out for. Firstly, it is about doing only the legal minimum or misunderstanding compliance as a legal topic and not as a leadership topic. Secondly, it is about not finding the good combination of cultural and structural measures. If you train employees to speak up, but you do not have credible anti-retaliation measures in place, the training will change nothing.

Exactly, treating compliance as a mere formality, or a legal requirement will not change behaviors. Perhaps employees will do what is right when someone is watching and out of fear, but it will not build an ethical culture and leadership. I (Anna) argue that the compliance work sometimes is part of the problem and why we see recurring misconduct and little cultural impact. We will surely discuss this more closely at the event. But in short do you Guido agree or disagree, what could be indications of that compliance is part of the problem? 

 “One warning sign is if compliance managers perceive themselves as “business partners”. They need to find the right and difficult balance between being the police and being a partner. Both extremes do not work. Effective compliance requires an active listening of compliance managers to what employees have to say. Compliance has to be a collector of stories, otherwise they will not understand what the real problems are. Another issue is a too abstract and boring compliance program, too many incomprehensible rules can be counterproductive as well.”

So Guido, what are good ways of measuring that what we do actually makes sense, that we are part of the solution for building more responsible companies?  

For me a good measure is all the moments of speaking-up that happen. Do employees on all levels feel that it is normal to go to a superior with a critical question or bad news. If they do, many compliance risks can be kept under control.

Ethical dilemmas and difficult conversations should be normalized for our programs to have a true effect. In theory doing the right thing should be easy, but why is it so hard in practice? Make sure to join us on the  Nordic Business Ethics Day on April 29! Thank you Guido Palazzo!

Guido Palazzo is a professor of Business Ethics at the University of Lausanne. In his session Guido will talk about why doing what’s right is easier said than done. Guido will also reflect upon human rights violations in global value chains in the talk with Mikko, Niina and Anna.