By Guy Higgins
I just recently read a Harvard Business Review article, In the Wake of #MeToo, Should Corporate Boards Hire Compliance Officers? The article was written in response to the recent spate of sexual harassment allegations and lawsuits.
I responded to that post at the time, but I thought that I would share my thoughts with my Noble Readers – since I think that this is an extremely important area of discussion.
The author of the article, Jim Heskett, gives his definition of the scope of this Compliance Officer: someone who reports directly to the corporate board, independent of the CEO, and who is responsible for “facilitating knowledge of what is actually going on in the organization.” While I think of a compliance officer as someone responsible for ensuring regulatory compliance, it seems to me that Dr. Heskett is discussing someone who understands and monitors the environment or culture or atmosphere of the organization. For simplicity, I’ll refer to that as the atmosphere.
- First, and most simply, I think that hiring a Compliance Officer (with Heskett’s job description) is a dangerous action for boards to take. Creating a new job is simply organization by sedimentation – the board would merely be adding a new job (and associated supporting bureaucracy) to the existing structure. I know of no evidence that this kind of action would change existing behavior within an organization (which behavior Dr. Heskett does a good job of outlining in his article). When you put someone in charge of something, say compliance or quality assurance, there is a distinct tendency for everyone else in the organization to relax and let the Compliance or QA Dude take care of it. While the CEO is ultimately responsible (even if she doesn’t know what’s going on), eliminating toxic environments within an organization is part of everyone’s responsibilities – not just the job description of some mythically empowered CXX.
- Next, this is a straightforward issue of leadership. In my recent blog, Snap Out of It and Fly, I provided a list of the responsibilities of a leader (which should include all CEOs). Number two on that list of five things was, “To create an atmosphere within which all organizational employees can succeed and achieve their professional and personal goals.” Just in case I wasn’t clear, that atmosphere includes being safe or free from harassment, bullying, threats, intimidation and similar sundried poisonous behaviors. Every leader in the organization, from the Board down to the most junior team leader, must understand that they own that responsibility for ensuring a non-toxic atmosphere, but that must start with the Board and the CEO – visibly and constantly. There are implications here:
- Leaders cannot tolerate abusive behavior for any Many of the men who have been accused of abusive behavior toward women “got away with it” for years because they were high performers, rainmakers, or wielders of power. While it took a long time, President Truman fired General of the Army Douglas MacArthur because, in Truman’s words, “I didn’t fire him because he was an ignorant son-of-a-bitch, which he was, but because he disrespected the office of the President…” MacArthur became toxic in his disrespect, and Truman fired him – a tremendously courageous and controversial thing to do. But Harry, bless him, was right.
- Leaders throughout the organization need to know what’s going on. There was a concept, years ago, called Management By Walking Around (MBWA). The idea was that a leader could get and maintain a better understanding of what was actually happening in the organization if they were routinely out talking to people. Note my use of the word, “routinely.” If the CEO leaves his office once a year and goes one floor down to talk to the first person he runs into, he’s not going to establish the needed understanding. If, however, he shows up in my office door a couple of times a year and invites me to walk around and introduce him to my folks, he’s going to have the chance to see how my people react when I’m visiting them and how I interact with my people. Such unscheduled visits also tend to keep people (or at least me) wonderfully alert. I can hear it now, “Surely that will take too much of the CEO’s time.” No – it will take a lot of the CEO’s time, but the CEO’s job is not to do the work of the small army of Chief Whatevertheheckisinvoguethisyear’s that she has working directly for her. It’s to do those things I listed: strategy, working environment, resources, and solving the wicked hard problems.
- If the Board of Directors is going to truly be a Board of Directors and not a Board of Gofers, the individual Directors will need to exercise some serious leadership and do so independently of the CEO. That means that the Directors need to get out of the boardroom and walk around talking to people – without the CEO in tow. As a personal opinion, I think that CEO membership on the Board is a conflict of interest and having the CEO as Chairman is a fundamental emasculation of the board. The Board is supposed to act as the stockholders’ surrogate for keeping the CEO on her toes. If she’s running the board, that’s not likely to happen.
A final thought – could a CEO spend too much time with MBWA? Certainly. I’m not implying that the CEO should abandon those other five responsibilities (which all take time and effort too) – but rather that the CEO needs to be routinely visible as a leader setting the course of the organization, maintaining a healthy work environment, obtaining and allocating resources and solving those wicked hard problems.