FCPA Compliance and Ethics Blog

July 3, 2013

Gettysburg Day 3: Pickett’s Charge and Culture of Compliance Throughout an Organization

Gettysburg, Day 3. What could our subject be other than Pickett’s Charge? If there was one event which symbolized the ‘Lost Cause’ of the Confederacy, it was this doomed-to-fail attack. I did not go to the Gettysburg battlefield until I was in my 50s. When I did, I was in awe of the brutality of the terrain. It was not just the rocks and crags of the Big Round Top, Little Round Top and the Devil’s Den, but also the openness and the space. Even in late May the sunshine just seemed to beat down on the fields. I imagine early July can bring some oppressive heat. Coupled with the smoke, screaming and chaos all around, it truly must have seemed like a descent into ‘The Inferno’.

In Pickett’s Charge, approximately 12,500 Southern soldiers from General George Pickett’s Virginia Division of Longstreet’s First Corp marched the three-quarters of a mile, across an open field and up to Union entrenched positions on Cemetery Ridge. All of this was in the face of murderous direct and cross fire from Union positions. As the Confederates approached, there was fierce flanking artillery fire from Union positions on Cemetery Hill and north of Little Round Top, and musket and canister fire from Hancock’s II Corps. In the Union center, the commander of artillery had held fire until the Confederate infantry was only 100 yards away. The effect was devastating. Nearly one half of the Confederate attackers did not return to their own lines. Although the Federal line wavered and broke temporarily at a jog called the “Angle” in a low stone fence, the Confederate attack was repulsed. The farthest advance of Brig. Gen. Lewis A. Armistead’s brigade of Maj. Gen. George Pickett’s division at the “Angle” is referred to as the “High-water mark of the Confederacy”, arguably representing the closest the South ever came to its goal of achieving independence from the Union via military victory. But it really was not a near thing, as the Union had sufficient reserves to breach any serious gap.

Over the past two days, we have looked at Confederate leadership failures as a segue into a compliance topic. So today we honor the everyman who fought at Gettysburg, from both North and South, and their values which allowed them to do such feats as march across an open field for ¾ of a mile in the face of sustained cannon, rifle and musket fire and then attack. David Brooks, in a New York Times (NYT) column entitled “Why They Fought”, cited to the 1997 James M. McPherson book “For Cause and Comrades,” which looked at the private letters Civil War soldiers sent to their loved ones. Brooks wrote that McPherson found that the letters from the soldiers spoke about “patriotism, ideology, concepts of duty, honor, manhood and community” and the letters “were also explicitly moralistic.” Brooks cited to McPherson again for the following, ““The consciousness of duty was pervasive in Victorian America,” McPherson writes. The letters were studded with the language of personal honor, and, above all, a desire to sacrifice, as one soldier put it, “personal feelings and inclinations to … my duty in the hour of danger.”” What made them like that? It was certainly a different place and time from today’s world.

The compliance perspective from our Day 3 lesson is moving the values of an ethical culture that your company espouses down through an organization. The Ethics Resource Center describes an “ethical culture” as having four essential characteristics:

  • Ethical leadership: leaders set the right “tone at the top” and model ethical culture as part of earning the trust of employees;
  • Supervisor reinforcement: employees look to immediate supervisors for signs that the tone at the top is important and is taken seriously;
  • Peer commitment: peers talk about the importance of ethics and support one another in “doing the right thing”; and
  • Embedded ethical values: a sense of “how we do things around here” integrated into daily activities.

Clearly this definition anticipates culture going down through an organization until it becomes a part of the corporate DNA.

In the Middle

Mid-level managers are often the demographic group within an organization that faces the greatest pressure. They often feel squeezed between carrying out edicts from the top and facing the realities from the field of actually getting the job done. But this role is critical because the majority of company employees work most directly with middle, rather than top management, as most employees will take their cues from how middle management will respond to a situation. Middle management must listen to the concerns of employees. Even if middle management cannot affect a direct change, it is important that employees have an outlet to express their concerns.

David Gebler, writing in the Society of Corporate Compliance and Ethics (SCCE) “The Complete Compliance and Ethics Manual”, in an article entitled “The Role of Culture”, says that “In many organizations mid-level managers have not had extensive leadership development training. Leadership may not have provided these managers with sufficient tools and training to both manage the pressure as well as provide the kind of empathetic reception that employees may need if they have a problem to discuss. The result is that line employees often feel their supervisors do not create a true open door for them to discuss issues. Even worse, in many organizations, supervisors are the source of the frustration that dampens the ability of senior leadership to create a culture of compliance.”

At the Bottom

How about at the bottom of an organization? Gebler believes that true self-governance within an organization means that lower level employees feel responsible for their actions; they feel emotionally invested in the welfare of the organization that they want to do a good job; and want to feel proud of their department and workgroup. Peer pressure still exerts a powerful influence on behavior in most organizations; sometimes it is even more powerful than messages or tone from leadership. One test could be the following, “if a colleague takes a short cut, or perhaps violates a code provision, such as unauthorized use of time or resources, will they say anything?”

Gebler ends his section by reiterating his belief that culture plays a significant role in shaping the day-to-day perceptions of employees and their relationship with the company’s standards and compliance program. Progressive companies evaluate their culture as such touchstones can inform the compliance practitioner “towards a fuller understanding of the drivers of ethical behavior through all levels of the organization. This data will help ensure that training and communication initiatives are seen as relevant and helpful tools for employees at all levels.”

I recently saw a formulation of the above that provides the compliance practitioner with a framework to define these concepts.

  • Set Expectations: Define your leadership with integrity. This means clear instructions that doing business ethically will be rewarding and failure to do so, even if it means making one’s numbers each quarter, will not be tolerated.
  • Equip: Supply the tools and training needed to authoritatively communicate compliance messages.
  • Prepare: Provide practical support for receiving and responding to issues reported.
  • Mitigate: Train managers on specific anti-bribery and anti-corruption risks. This would include laws such as the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act and also embedded legal risk such as retaliation for reporting unethical behavior.
  • Educate: Make it clear that ethical values and doing business in a manner that is in compliance with your Code of Conduct and FCPA program are a fundamental part of each employee’s jobs. This should be reinforced with both performance criteria and performance rewards. The compliance practitioner should also train employees to spot and address issues in their business roles.

This blog concludes my three-part look at the Battle of Gettysburg. I hope that you can take a few minutes to consider the sacrifice of all the men who fought at this small village and what it continues to mean to all Americans today, even 150 years later. As a final commemoration, tomorrow, July 4, I will conclude my series with a posting of the Gettysburg Address.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2013

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