Crisis response informs much of my thinking, so I’ll take that approach. It will make for a bleaker assessment, but that’s where my mind and fingers took me this morning. I’m more optimistic than this newsletter suggests, but starting the week with a bit of stoic reflection on the potential problems we might face was constructive (for me, at least).
What is E&C?
That E and C have become one in many contexts is understandable if potentially problematic. Ethics is variously defined as anything from a self-determined moral operating system (”doing the right thing even if no one is looking”) to rules and obligations. I’m simplifying, necessarily. But one end is agency, the other is necessity. At the compelled end is where many people I speak to feel compliance starts. Comply, or else.
Why this preamble? Crisis management is about scenarios. As I look at E&C, we individually and as organisations face various scenarios. E&C is amorphous. In some organisations, it’s “what can we get away with?”, in others it’s more existential, “whom do we want to be?” These questions become progressively more challenging to answer in larger, globalised entities. Estimating scenarios when organisational variances have such a significant impact is pointless.
I will consider E&C as a construct and how it might travel over the coming decade.
Context
To start, as I wrote this article, I was thinking about this quote from C. S. Lewis:
“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience … To be “cured” against one’s will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will.”
Why this quote? Because…
💡 E&C judges others.
💡 Polarisation and division are a problem.
💡 Many of us don’t like top-down.
💡 E&C doesn’t always listen.
You may not like the quote or author, but before you dismiss it, consider these scenarios:
- We tell people bribery “is wrong” in countries where their children can’t get medical care without bungs. They know it’s wrong. We also set 20% growth targets in these emerging markets – asking cheap(er) labour to subsidise European and Western economic malaise. We wonder why cynicism about our anti-bribery stance persists.
- We export our worldview of “good governance” and launder loot from struggling/failing states.
- We determine what are/aren’t acceptable views on various (typically Western-centric) social issues. We then lump together large swathes of people who disagree with us – we call this equality.
In my teens and twenties, I spent considerable energy trying to dismantle the arguments of those whose views I disagreed with. The more brutal (as I saw it) the takedown, the less likely they were to agree. Castigation doesn’t seem to help us find a common path; how strange.
If you feel the three examples above are a bit harsh, bear with me. A glimpse at the headlines would suggest E&C is not optimised, yet. Yes, it’s a journey, but how far along are we?
Against this backdrop, these are my E&C crisis scenarios. But first, a few facts and assumptions underpin the options.
Crisis management – facts
The remit of E&C has grown and will continue to – when I started, fraud, corruption, money laundering, and occasionally sanctions dominated. Now that universe is expanding and may include areas as broad as human rights, data privacy, ESG, and workplace misconduct (amongst others).
Crisis management – assumptions
Assumptions are many, so let’s focus on what BIG assumptions might be wise:
💣 Resources will remain tight for most E&C teams.
💣 The scope of what’s covered will expand further.
💣 The regulatory framework will remain politicised and patchy.
💣/🎯 Activism broadly trends up.
🎯 E&C becomes a career, not a second career.
🎯 Technology helps (more than hinders).
🎯 Speak-up frameworks (and non-retaliation) continue to improve.
I haven’t made many assumptions about most of the external factors as they will remain location- and issue-dependent.
SCENARIO A: BEST CASE
E&C gets back to basics. We start to use simpler questions and frameworks as broader societal mores provide the wind behind E&C’s sails.
💡 5 whys – we start to ask better questions and listen.
💡 Behavioural (not process) approaches to ethics increase.
💡 What you do, where, with whom, and how = risk (less jargon, more accessibility).
💡 Impact analysis first considers people/planet, not regulation or reputation.
💡 Emerging market anger (e.g., Najib) spurs change.
💡 Developed markets actually punish the facilitators/beneficiaries.
💡 E&C gets a seat at the strategic table.
SCENARIO B: MOST LIKELY
A widening schism between values-driven and tick-box approaches to E&C. The latter will continue to:
🤦🏻 Think more lawyers are the answer to all problems.
🤦🏻 Avoidance is the strategy: ostrich (best case) or weasel (worst case).
🤦🏻 More death by policy and process.
🤦🏻 Enforcement remains patchy enough for most to conclude (privately) that “safety in numbers” prevails and “[fines, etc.] are a business cost.”
The more values-driven folks will (hopefully):
🌈 Save money and time by making E&C human.
🌈 Make E&C part of (meaningful/tangible) KPIs.
🌈 Use E&C ambassadors like community support officers.
🌈 Use E&C as a brand and marketing differentiator.
🌈 Include greater cognitive diversity in E&C teams.
SCENARIO C: OUTLIER
Linking back to the quote, this outlier may become more likely if we don’t listen better or as linked elements (ESG, for example) are used as political footballs. Some of the triggers for this outlier might include:
- Geopolitical and domestic chaos, conflict, and high-frequency environmental disasters lead to (more) cynicism of E&C (and broader corporate commitments to people and the planet).
- We trust less and less what we’re told (or read) and retreat into personal protectionism.
- Organisations fail to treat people as humans, policing thought and defaulting to deception and surveillance.
- Profiteering, frontier behaviours, and rackets strengthen in opposition to E&C, aided by cultish CEOs helming megacorps who demonise the liberal agenda.
- E&C goes the way of other acronyms (like CSR), drifting into irrelevance. It’s replaced and rebranded – glossy but ineffectual.
Conclusion
Division is nothing new. High stakes are also not new. But the role of the corporation in this dynamic is different. Sitting on the sidelines is harder. Ensuring E&C remains relevant is on us. If we don’t listen to people, especially those on the frontline and those who oppose our views and ground responses and guidance in reality, we lose.
If we don’t shrink an unwieldy regulatory sprawl into plain speak, we lose.
To do that, we must make risk relevant to everyone. That would involve including them in the process and trusting, not curing. E&C needs consensus and grass-roots support to thrive.
Easier written than done, but it’s eminently possible. I still believe that (near) no one wakes up and wants to be the baddy.
We need to see risk less as monochrome and more as 3D, assessing: 1) the external (changing) context and environment; 2) internal risk appetite and controls; AND 3) how our people feel (culture, psych safety, call it what you will).
80% of what I see in E&C is the middle part – assessing controls. That’s like getting dressed for a date in the dark without knowing anything about the venue or person – you may feel great, then you step out into the real world.
Let’s make E&C human and environmentally relevant, not a partisan or polarising topic.