Nothing says “America!” these days like righteous indignation at a fellow American doing something we don’t like. So as we return from our Fourth of July holiday, let’s all give thanks to one American who cultivates that spirit and gives chief compliance officers a great example to cite next time you’re talking with the CEO about tone at the top.
Chris Christie, governor of New Jersey and beachgoer extraordinaire, thank you. Compliance officers owe you a debt of gratitude for your shameless, ridiculous, preposterous tone at the top.
As you may already know, especially if you live in New Jersey, Christie spent last weekend relaxing with his family at Island Beach State Park on the Jersey Shore. That’s more than anyone else in New Jersey could do, because Christie had closed all state parks and beaches over the long weekend as part of an impasse with legislators over a new state budget.
So Christie closed all state beaches and parks to the public, on a gorgeous long summer weekend; and then took his family to one of those closed parks to enjoy the day in splendid isolation at taxpayer expense. That’s the conduct in question.
Enter the media: an enterprising New Jersey newspaper chartered a private aircraft to fly over the beach, and took photos of Christie enjoying himself. You can see a complete photo gallery on NJ.com if you want to raise your blood pressure. My personal favorite is this. Christie is on the far right.
After sunning himself, Christie went back to the capitol in Trenton. He told reporters he had not gotten any sun. They produced the photos. His spokesman then gave an updated statement: “He did not get any sun. He had a baseball hat on.”
I can’t tell if that last part was intended to be serious. Then again, this whole situation is a joke.
What Drives Misconduct in Organizations
Anyone can see that Christie’s behavior was offensive. But was it illegal? No: the home that he visited is owned by the state, for the pleasure of the sitting governor. And closing state properties is standard procedure during a budget standoff.
So was it just a bad idea? That depends on whom you ask. I suspect if we asked Christie—who is leaving office in a few months, with dismal approval ratings unlikely to move one iota upward by January—he couldn’t care less. Governing the state of New Jersey is difficult under the best of times, which these times are not. Even jerks are allowed to take a break, especially from other jerks in the state legislature. So I can see why Christie might no longer care what his conduct looks like.
Yet it looks so offensive to the rest of us. We can see it, instinctively. Why?
It’s all about the perception of undeserved privilege.
Christie gained access to something that the rest of us didn’t, without earning it. Correct or not, fair or not—that’s what a large swath of the public believes, and the public gets to decide these things for itself. That’s why Christie will be even more despised now than he was last week.
This may sound like an esoteric point; it isn’t. Apply it to the workforce—do employees believe that some executives have special privilege they don’t deserve?—and all sorts of problems can start to fester. Compliance officers need to grasp that relationship intuitively. The better you understand where the impulses for misconduct or poor compliance originate, the more easily you can find those sources and cut them off.
For example, one big driver of employee fraud is rationalization: the belief that nobody is harmed by the misconduct an employee wants to commit, or that the company doesn’t care. When employees perceive undeserved privilege at work in the company, their path to rationalizing fraud gets shorter and easier. “If the CEO gets to fly his family around on the private plane to attend a family party, why can’t I charge a ticket for my spouse on the company card? It’s not like anyone cares.” That sort of thing.
That’s how an employee tempted to commit misconduct perceives things. Down the cubicle row from him are his co-workers, who may well know what he plans to do. When they see undeserved privilege in action, they’re more likely to become more cynical about corporate conduct and culture—a dire threat to compliance officers trying to implement policies for good conduct. “Why should I care that John wants to sneak his girlfriend’s travel costs into the T&E system? it’s not like anyone else around here cares.” And then your compliance hotline stays silent.
That’s not a phantom fear. According to NAVEX Global’s 2015 Ethics & Compliance Training Benchmark Report, 37 percent of respondents cited employee cynicism as the top threat to the effectiveness of compliance training programs. The perception of undeserved privilege is where that cynicism comes from.
The Challenge for Ethical Leadership
We’re placing a lot of importance on executive leadership, I know. More than that, we’re implying that executives should even deny themselves some perks of the job they might be entitled to enjoy. That’s why I talk about employees perceiving undeserved privilege—not seeing it, since that assumes the undeserved privilege definitely exists. Sometimes employee perceptions are wrong. Alas, that’s not much solace to a compliance program that nobody believes in or uses. You need to meet employees (and third parties) where they are.
What are compliance officers supposed to do with this risk? A few ideas come to mind.
First, in talking with senior executives or training them about ethics and compliance, frame the issue properly. The paramount compliance concern for executives at the top is tone at the top. Well—awareness of privileges they have, and how those privileges are perceived, is a crucial part of that tone. Inject that point into discussion about policies for senior executives (travel, spending accounts, retirement benefits, parking spaces; the list is long).
Second, try to diagnose the perceptions that employees have about executives’ perks and privileges. In that next corporate culture survey, ask them for examples of undeserved privilege they see. I bet that list will be long, too.
The answers to a survey like that would probably be enlightening. You might see areas where employees need more clarity: for example, that if the CEO is on a long-haul flight for a major presentation, perhaps she does need a first-class seat or private plane, to rest and prepare for a presentation that will save the company’s bacon. You might see areas where the executives are enjoying a privilege that might be undeserved, such as private healthcare or company-paid dues to a country club. Heck, you might even find fraud (“Vendor ABC always gives the general manager concert tickets”) that employees mistakenly perceive as privilege.
Ultimately, remember what undeserved privilege is: private law. (Literally: “privilege” comes from the Latin privus, private; and lex, law.) It’s a private law that benefits only one person, who doesn’t deserve it.
Did Chris Christie deserve his private beach getaway in New Jersey? Opinions will differ. But I’ll bet that a lot of people saw it and said, “Well if he can behave like that, I can too.”
For compliance officers, nothing good comes from thoughts like that. And those thoughts come from poor ethical leadership at the top.