What the Oscars 2017 teach us about Ethics and Whistleblowing
“Remember that reputation and integrity are your most valuable assets – and can be lost in a heartbeat” Charlie Munger
Would you do the “right thing” with the worlds eyes on you? Is speaking up a viable option?
The Oscars 2017 proved that some people struggle with speaking up even when the issue is not their fault. A night celebrating excellence ended in chaos, disbelief and with the reputation of the world’s largest accounting firm PriceWaterhouseCoopers (PwC) in the balance.
Warren Beatty opens the envelope and clearly sees that there is an issue. So why didn’t he say something? We see the confusion but obviously, he doesn’t want to be the one blamed for disrupting the ceremony by raising the issue.
As soon as Faye Dunaway announced “La La Land” instead of “Moonlight”, as the winner of the Best Picture Oscar, the two senior PwC employees KNEW that a mistake had been made. In fact, in that split second, they were the only people that knew. What did they do? Nothing. The issue could have been resolved quickly if those individuals had spoken up but for two minutes, the awards show continued as if nothing had happened, the speeches start, yet you sensed something was off.
So why was it finally left to the producer of “La La Land”, Jordan Horowitz, who had to speak up and right the “wrong”? The man on the stage that had the most to lose by speaking up, was the one who did the right thing. 24 hours later, Horowitz is being hailed as a hero and praised for his graciousness in correcting the mistake.
The Academy who hosts the annual awards hired PwC, for 83 years, to be sure that there are robust processes and controls in place to ensure that:
1) The counting of the Oscar votes is accurate and secure;
2) The winner’s names are kept secret until the big night. Only the two appointed PwC employees know the winners until they are announced.
3) The envelopes get safely to the stage in time for the ceremony
These processes include amongst other things, segregated collation of the results, two senior PwC representatives, Cullinan and Ruiz, who memorise all the winners, they have security details until the cards arrive at the theatre, and two differing routes to the theatre so that even L.A. traffic can’t affect the ceremony. The processes are not new, in fact this is the fourth year that Cullinan and Ruiz have overseen the envelopes. But where was the procedure for what happens when the wrong envelope is given to the presenter, or as occurred on Sunday, the wrong name is announced?
And yet we can draw direct comparisons from the events of the Oscars 2017 to Whistleblowing & Compliance Programs in business today. How do you know that your processes and controls are working as intended? An issue that many compliance programs and whistleblowing hotlines experience but which can easily be dealt with.
1) Test the whole process
Even if a risk assessment shows that nothing has changed in the process, an annual review of the control elements should be conducted. Whether this is an internal controls review, an audit, or a full-blown run-through of worst case scenarios, checking that everything works as intended, means that issues can be dealt with before they escalate to reputation destroying levels.
After all, you test the business continuity plans relating to data back-up or fire/flood/pandemic illness, so why wouldn’t you test whether the processes which protect your reputation works?
2) Train Employees in Ethical Decision Making
“Ethics must begin at the top of an organization. It is a leadership issue and the Chief Executive must set the example” Edward Hennessy
- Giving employees an annual computer course on the content of your code of conduct and how the whistle-blower hotline works is never going to change how people will react when put in difficult situations. We will probably never know what Warren Beatty was thinking when he read that card, and how many different options went through his head. From the obvious confusion that we could see, we know he was struggling with the decision as to what he was supposed to do.
- Make it easy for your employees to do the right thing. Train your employees in ethical decision making, giving them trainings where they have opportunities to discuss issues and different possible decisions. Allow them to see what factors can affect their decisions e.g. pressure from a boss, negative situations at home, feeling ill.
3) Encourage a speak-up culture
- Encourage employees to speak up and provide them with the tools to be able to do that, anonymously if needed. Make sure you can protect them from any retaliation of them speaking up.
- Use the information received to act quickly to resolve issues. You will have longer than the two minutes that PwC had to speak up, but you can be sure that, should they retain the contract for the Oscars 2018, the processes will be tightened up and trained to perfection.
- Once an issue is resolved, use the lessons learned to strengthen your policies and procedures.
After all, the Oscars 2017 will be remembered for all the wrong reasons. Don’t let your business be next! Commit to helping your employees act with Integrity, train them in ways that will help change their behaviours and mindsets, and praise those who speak up, especially when it’s difficult to do so.