Given the challenges faced by the property sector in particular, one could easily understand why a global CEO may find it difficult to find time to focus on ‘non-core’ concerns like building an ethical company. Yet, as Jones Lang LaSalle global CEO Colin Dyer explains, reinforcing ethical behavior is a non-negotiable part of his role. He describes why it is important, what challenges a global company faces, and how the company has gone about implementing an ethical framework across the organisation.
ceoforum.com.au: Given all that is going on in the economy at the moment, how does a CEO focus on being an ethical company?
Colin Dyer: There is no doubt that the economic conditions we all face are creating challenges on almost a daily basis. At the same time, however, the imperative to be an ethical company should be a constant, regardless of market conditions.
I find a very useful test is that, when contemplating some decision or action, to consider how we would feel as a company if that decision or action was featured on the front page of the business press around the world. The test of course, is how you would feel about that kind of exposure, and if you would feel good, that is generally an indication you are acting ethically.
We see ethical business as also being good business. If you act ethically on a consistent basis, that is recognised over time. You will attract the best kinds of business, and you will attract the best clients.
The other point here is that when the CEO and senior management emphasise ethical behaviour, it sends a very strong internal message to employees. It makes it very clear that this is always an expectation in how they act and behave in all their day-to-day dealings, and is fundamental to how we must do business at all times. That also has an impact on the people you attract and hire, so, over time, you get a self-reinforcing culture in the loop.
ceoforum.com.au: Does the fact that Jones Lang Lasalle is a global company make this a more difficult challenge, given that you are operating in many different business environments around the world?
CD: Actually the standards we have are consistent across the company – they represent the ethical behaviour we want across all our operations. As a practical matter, we regularly move people between different operations, so we cannot confuse people by telling them that, in one context, these values matter, but in another they do not. Many of our clients are also global companies, and they also expect us to operate to the same standards regardless of where we are dealing with them. Our standards of behaviour need to be visibly consistent to both our employees and our clients.
ceoforum.com.au: What have been the major initiatives taken to date?
CD: We have an ethics policy for the company as a whole, which we developed earlier this decade and are constantly updating and reinforcing throughout the company. That is quite a broad-ranging document, covering issues such as how we treat clients, counter parties, and even competitors, as well as how we deal with our own employees. It also includes our corporate social responsibilities, such as how we operate in the broader community and how we interact with the environment.
We also sought and obtained an independent validation of our ethics program from the Ethisphere Institute, which has certified our program with its Ethics Inside designation. We were also pleased to have been named by Ethisphere as one of the World’s Most Ethical companies, the list of which ran in Forbes magazine at the beginning of December.
While the ultimate sanction on ethics, is, of course, dismissal from the company, we prefer to emphasise education. Our team of global ethics officers runs workshops, for instance, which are strongly case study-based, where the participants examine what has happened, what to avoid, and how to apply the expected standards in that situation. Discussions of this type can be very useful in reinforcing expected behaviours and having people be prepared for the challenges they face.
ceoforum.com.au: How do you see compliance and ethics interacting? One observation you often hear is that too much focus on compliance of various types can push ethics out of the picture.
CD: Having a strong legal framework around how people need to behave is entirely appropriate in many cases. At the same time, we have to recognise that compliance is not sufficient, as it is impossible to legislate for every situation people might face.
What you want to do is develop a level of understanding in people so that, almost instinctively, they know how to behave when confronted with ethical challenges. That starts with the people you hire, and the sort of checks you do on candidates and their work history. That conversation needs to continue as long as they are an employee of the company, so you can be confident they will act in the correct way in almost any situation they may face.
ceoforum.com.au: What do you see as the key implementation challenges in developing and sustaining a strongly ethical company?
CD: Clearly it can’t be accomplished overnight – you can only succeed with this by sustained and consistent effort over a long period. In our case, the company has been going around 240 years, and, in that time, acting in a way that is above reproach has been of our three core values, the other two being commitment to the client, and collegiality in working together on behalf of the client.
ceoforum.com.au: One area where ethics can impact enormously on a company is the risk that one instance of unethical behaviour can have major consequences for the company’s reputation. How do you manage that risk organisationally?
CD: You can manage some elements of that risk in a legal sense. For instance, we continuously review our dealings with clients and competitors to identify early any legal issues that might emerge, or have started to emerge. The intention is to identify, manage and review any issues quickly, honestly and transparently, before they become problems for the parties concerned. There are also a whole range of tools you can use to manage the different dimensions of financial risk.
With ethical risk, however, because it is all about people’s behaviour, there are no fool-proof systems you can put in place to eliminate all risk. It is about consistent reinforcement of the values required, be it in training, education, induction, appraisals or day-to-day business. I believe it is particularly important to have senior people who carry the values to the rest of the organisation, so that, for instance, new people to our organisation will be exposed to the correct examples in this regard. I spend quite a bit of my own time, for instance, addressing our staff on this matter. If the CEO doesn’t embody those values, the organisation does not believe you are serious about it.
ceoforum.com.au: What do you believe are the 2-3 most important things for the CEO to get right in developing a more ethical company?CD: The key thing is to set a standard, and then write it down so it can be communicated to the rest of the business, which will need to be resourced appropriately. You also need to make sure the senior people in the business understand and are committed to the values, and are prepared to consistently refer to and reinforce the values in how the business operates. You need to set the example yourself, of course, and so does the rest of the team.