Boardroom Report (BR): How do organisations avoid ethical failures?

Dennis Gentilin (DG): Essentially what I say through my book, The Origins of Ethical Failures: Lessons for Leaders, is that formal systems of governance are important but what is just as important is the human systems of governance and you have to focus on them in organisations.

You need to make sure there is a set of purpose, values and principles that underpin your organisation. You need to make sure that the leaders across the organisation are role models for those purposes and values not only at the board and executive level but across the organisation.

And you need to make sure that your organisation encourages people to speak up and when they do, they’re listened to and respected and their concerns are taken seriously.

BR: How can boards ensure they shape an ethical culture?

DG: So that’s where you really need to encourage this concept of a “speak-up” culture and one of the ways you measure that is by whether bad news flows up the organisation and how quickly does it flow up. Directors need to be constantly asking themselves, “Am I hearing bad news because I should be hearing bad news at every meeting and if I’m not, why not? Don’t the executives and the CEO feel comfortable speaking honestly to me?”

Also, get into those surveys that we so often roll out to organisations where we only share the good news stories but dig into those and find out what is wrong in your organisation and actually learn about those issues and think about what you can do to address them.

BR: Many organisations talk the talk on values, how can they also walk the walk?

DG: So one of the first things any board needs to do is to have an understanding of what their purpose and values are and what the behavioural expectations underpinning those values are.

Secondly, how do we hold each other accountable to those behavioural standards because we’re all human, we’ll all fall short sometimes, but is the dynamic in the board such that we can hold one another accountable and have those difficult conversations? How do we ensure that leaders across the organisation are also behaving in the same way and how do we ensure they have an understanding and an investment in the organisation’s purpose and values and how do we ensure that they too are role models for these purposes and values?

That’s where it involves the board cutting through and actually understanding what is happening in their organisation.

BR: How did your experience as a whistleblower affect you?

DG: As any whistleblower will tell you, it is a fairly challenging experience. For most whistleblowers, it’s not that moment where you make a decision to speak up, it’s the months and years proceeding it where you’re grappling with your morality and you’re working in an environment where things are wrong but you’re not sure what to do about it.

It was very challenging at the time but the decision I took at the time was to try and put it behind me and the main reason for that is that I didn’t want it to become central to who I was. I felt that I had more to offer so in a lot of ways, my story is unique because I went on a further 12 years at the National Australia Bank (NAB) which is where I was employed at the time in a number of roles. And I was very fortunate that there were people at NAB who really supported me through the process and they understood what I had been through and they kept providing me with opportunity and support which was important.

But as anyone will tell you when you go through an experience like that, it does shape you in some way and what it did for me was drive a very strong interest in human and organisational behaviour so I’ve recently released a book which explores how organisations can create environments where bad things happen and ethical failure is possible.

BR: Are there policy changes you would like to see to support whistleblowers?

DG: At the moment, whether you’re protected as a whistleblower largely depends on whether you’re in the private or public sector and which jurisdiction you find yourself in. Getting some consistency in regulation would obviously be a big step forward.

One thing that I said in my submission to the parliamentary inquiry is that the best way to protect whistleblowers is to have organisations create environments where people feel that they can speak up and when they do, they’re listened to, they’re respected and their concerns are addressed.

A formal whistleblowing program with a hotline that people can call is only one part of that but if you don’t create environments at your organisation where people feel they can speak up, then even the best formal hotline can be redundant. Organisations, and the regulations should put an onus on them, need to actually survey their organisation and find out whether there are pockets where people don’t feel comfortable speaking up and actually unearth why that is the case and address that.

The most positive outcome for a whistleblower is that when they do come forward, they are respected and listened to and they are taken seriously.

BR: How do organisational leaders stay on top of potential ethical problems?

DG: There are certain lead indicators where quite often, after an ethical failure has happened, directors and executives will look back and, on reflection, realise that there was something wrong but they just weren’t asking the right questions. You need to become what Max Bazerman from the Harvard Business School says is a ‘first class noticer’.