Maureen McGirr, Vice President, Office of Ethics, Merck, discussed business culture, ethics, and values and their impact on today's organizations during her keynote address to Argyle's CLO membership at the 2017 Chief Legal Officer Leadership Forum in Washington D.C. on June 20. In her presentation, McGirr explored how senior leaders can promote a compliance-centric culture to employees at all levels.
According to McGirr, many senior leaders drive ethics and compliance. On the other hand, few leaders show their commitment to following a company's values in their day-to-day actions.
At Merck, the company illustrated its commitment to pharmaceutical innovation as part of its campaign against river blindness.
With its river blindness campaign, Merck pledged to donate medicine to help individuals combat river blindness. Furthermore, the pharmaceutical company showed it strived to look beyond its bottom line to ensure people could overcome river blindness.
McGirr noted that Merck promotes its culture and values in its everyday actions. By doing so, the company has embraced a compliance-centric culture, one that has helped the business differentiate itself from the competition.
"The values of the company are so deeply embedded that even the commercial teams live those values," McGirr stated. "Even the commercial teams say, 'This is what we're going to do because it's the right thing to do.'"
Merck's senior leaders go above and beyond the call of duty to do the right thing and focus on the greater good in all that they do, McGirr pointed out.
"Ethics and values can be catalysts for above-average performance at a company."
Also, Merck's senior leaders preach a message of integrity and compliance that extends across all departments.
"The focus has shifted to the culture of the company and what the senior leaders are doing to ensure the company is living up to a strong culture of integrity and compliance," McGirr said. "We're not talking about a check-the-box approach. We're really talking about something that is much deeper than that."
Merck has linked incentives to its culture, and this has enabled the company to connect its culture and values to large groups of employees and gain workers' trust.
"You can have a longstanding culture of ethics, integrity and compliance and build your reputation on that. But if your incentives aren't aligned to your culture, you can really undermine what you're doing," McGirr noted.
In addition, Merck has been able to explain the importance of compliance to its employees – something that has helped the company avoid myriad compliance issues.
"Organizations with strong ethics cultures have fewer compliance issues," McGirr indicated. "Employees at these organizations report fewer compliance concerns, and when employees see [compliance concerns], they report experiencing less retaliation."
For companies that want to gain a long-lasting competitive advantage, a compliance-centric culture is key, McGirr stated.
"Ethics and values can be catalysts for above-average performance at a company," McGirr said. "Employees who have a positive view of a company are more likely to report and observe misconduct."
Senior leaders must be ready to take a top-down approach to compliance, McGirr stated.
If senior leaders show they are dedicated to compliance, employees may be more likely than ever before to follow a business' mission. Conversely, senior leaders who fail to promote a company's values in their day-to-day activities are unlikely to foster trust with employees.
"How are you making decisions that connect the dots for employees about how your decisions are founded on values? … It's a great discussion that has made leaders think about whether they are pushing strong tone at the top (of an organization)," McGirr noted.
A company that generates trust with employees may be able to boost its customer retention and loyalty levels.
"You can have a longstanding culture of ethics, integrity and compliance and build your reputation on that. But if your incentives aren't aligned to your culture, you can really undermine what you're doing."
In most instances, customers will identify companies that are committed to helping people in any way they can, regardless of how a business' actions impact its bottom line. As such, customers may select one company over another due in large part to its devotion to compliance and ethics.
"Customers have actually come to us and said, 'We prefer to work with your company because we know that you adhere to standards,'" McGirr indicated.
How a company promotes its mission to employees can make a world of difference as well.
A business must develop consistent values and share them in the same way with all employees across all markets. With this approach, a business can minimize the risk of compliance errors, along with provide its employees with the support they need. And as a result, employees can embrace a business' values and uncover innovative ways to help an ordinary company become an industry leader.
"It's so important to have that in-person connection to different markets," McGirr said. "Taking real-life internal case studies and sharing them in different markets and having discussions with different leadership teams … ensures we're not repeating the same mistakes in different markets."