Regulation will always remain an ineffective method of encouraging ethical behavior. After all, detailed behavioral rules don’t ensure happy, resourceful internalized teenagers any more than they produce happy, motivated adults. In the same way as for humans, it is emotionally stable and involved, engaged organizations that encourage ethics and appropriate governance.
Governance is not just an exercise by the Board of Directors. It encompasses the whole organism in a challenge to remain whole and aligned. That implies organizations that not only rely on the capacity of their employees to be ethical, but involves them in the process. We learn in social settings, and we learn and discern based on the culture around us. Involving employees in the governance process encourages emotional engagement and does not rely on rules and formal documents.
What would that look like? One best practice for Governance holds that a cross-sectional group of Associates take on the task of promoting and applying company values. Southwest Airlines, long heralded as one of the best companies to work for, and with the longest profitable record in its industry, attributes its success to its approach to governance. Southwest has a Company Values cross-sectional team that helps make decisions on everything from management conduct to strategic endeavors. Southwest makes no apologies for putting their employees first, customers second, and shareholders last. If one thinks about it, it makes all the sense in the world. The organism must first take care of itself, or be of no use to anyone. After all, people who feel good about their lives, have healthy minds and bodies, with good friends and family, tend to take a positive approach to life in general. So the organization must take care of itself as well, or remain only half engaged in its outreach to others, and the many measures of its performance.
Nexen has an Integrity Resource Center made up of Associates along with Integrity Leaders in every office. Anyone, including associates and the public, are encouraged to contact those persons if they have questions or concerns regarding particular behavior. Those places provide a safe haven to voice thoughts, immune from retaliation. They also audit and monitor the climate of the company. Nexen is rated in the top best governed companies in Canada every year.
As some of these organizations perform so well in their fields, other companies have become interested. Some people have labeled the idea ‘employee branding,’ and look on it as a form of competitive advantage. This view seems a particularly cold prism to view what is surely a paradigm shift in looking at the way organizations view themselves. Internalizing corporate governance across the organization is not a marketing ploy. It is a reinvention from the ground up and the inside out. The organization is not something to be controlled. It is something to nurture. Like any growing individual. That is the essence of governance, after all.
