Yet again, on a certain abstract level, corporate compliance officers owe President Trump a debt of thanks. Rarely has one chief executive given us so many lessons to learn about poor tone at the top and unethical behavior.
This week’s lessons, of course, stem from the white supremacist rally in Charlottesville, Va. over the weekend. The supremacists, and Trump himself, put corporate leaders into several tremendously difficult positions.
The most awkward position is the same one Hui Chen articulated in June, when she resigned as in-house compliance counsel for the Justice Department: it’s not morally right for prosecutors to grill companies about their ethics and tone at the top, when the department itself is led by a president so clearly ignorant of ethics. It’s hypocrisy.
Now that same dynamic will play out within each corporation, where CEOs talk about the importance of ethics and calling out misconduct when you see it. We can’t expect employees to take those messages seriously when the CEOs themselves won’t call out misconduct when they see it.
So by extension, Trump’s behavior puts chief compliance officers in that same awkward position, because the person conveying that cheerleader message on ethics is you. You’re the one telling employees that what the CEO says about ethics and speaking up truly is important; so please take the training, call the hotline, perform the due diligence, test the internal controls, and so forth.
Trump is the one telling people that no, actually, none of that really matters, not when doing so would sacrifice money or power. And the CEOs who still serve on his advisory councils telegraph the message that they believe he’s correct. Employees at those companies will see it— because the hypocrisy here is not that hard to see.
So we should applaud CEOs such as Kenneth Frazier (Merck), Kevin Plank (Under Armour), and Brian Krzanich (Intel) for resigning already. We should also remember Robert Iger (Disney) and Elon Musk (Tesla), who quit in June after Trump declared that the United States would pull out of the Paris climate accords. And let’s not forget, the first CEO to start this trend was none other than Travis Kalanick of Uber, who resigned at the start of the year after Trump announced his Muslim immigration ban.
Will other CEOs quit too, now that Trump gave his bizarro performance yesterday and doubled down on his nonsense that not all people marching for white supremacy are bad? Let’s hope so.
The issue isn’t so much that these CEOs want to turn into symbols of anti-Trump resistance; I’m sure they don’t. It’s that by their inaction, they risk turning themselves, and their brands, into symbols of pro-Trump complicity. And with every passing week, we see all the more clearly what the core values behind “pro-Trump” actually are. Those values are inimical to the core values CEOs talk about when they talk about being ethical organizations.
As for the responses from executives who mumble about “being more effective by remaining close to the president”— that’s baloney, and they know it. As Larry Summers noted yesterday in a brilliantly harsh Financial Times article: If the CEOs of Walmart, Boeing, or any other major company call the president, the president will answer the phone. They don’t need to be on an advisory council that meets, at best, every six to eight weeks; sucking up to a man with an attention span less than 140 characters long.
This is the moment for CEOs to show they are actual human beings, not self-driving vehicles on a quest for more shareholder value. Sometimes human beings have to stand up for what they know is right, even when standing up sucks and might cost them money.
CEOs ask employees, through their compliance programs, to be willing to make that sacrifice every day. Let’s hope the remaining number of CEOs on Trump’s advisory council have the guts to do the same themselves.
Otherwise your quest for a highly ethical culture gets harder.
On Another Practical Note
One of the smaller stories orbiting this weekend’s events in Charlottesville has been the fate of the Daily Stormer, a neo-Nazi website that had promoted the march. The Stormer has been kicked off the web.
The Daily Stormer had been running its website through GoDaddy.com, one of the largest website hosting services around. On Sunday, after a vile attack piece against Heather Heyer, the woman killed over the weekend, GoDaddy revoked the Stormer’s website registration and gave it 24 hours to find a new home.
First the Stormer tried to relocate its website to Google’s hosting service. Google wanted no part of that, and told the Stormer to go elsewhere. As of this morning the Stormer seems to have gone to the dark web. Its usual website is down.
So we have yet another example of third-party risk, and the constant vigilance companies need to ensure their brands aren’t infected by the unethical conduct of others. Facebook and Reddit are now doing similar mop-up operations, trying to get hate groups off their respective websites. I don’t imagine too many companies do business with neo-Nazis or the Klan, but it’s a reminder that you want to check whether your policies do prohibit such transactions, and that the company has the ability to sever ties with such third parties when you find them. (Even the makers of Tiki torches had to issue a statement condemning Nazis using their products.)
And for anyone with employment law questions on your mind, yesterday the National Law Journal had a good refresher on how much discretion companies have to fire white supremacists, neo-Nazis, or other political extremists on your payroll. Generally, you have a lot.