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Ethics in Hospitality: How to Create an Ethics Culture

 

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November 15, 2012

The hospitality industry is among of the World’s largest, and even though its operating environment is very complex, the industry continues to evolve and grow. Restaurant chains, hotels, and resorts are driving a human resources revolution; by incorporating interactive education, creating accessible reporting tools, and responding to issues with consistency, these companies are promoting a strong ethics and compliance culture—and reaping the benefits. In this first of four Hospitality Series blog posts we explore the three initial steps necessary to creating an ethics and compliance culture in your hospitality business.

 

Education is a Two-Way Street

In the hospitality industry, employees and managers are the front line in establishing a strong ethics and compliance culture. This means that ethics education becomes an important and interactive initiative; staff can learn from the company and the company can learn from its staff. That said, in order for this interaction to take place managers and employees must first be trained in ethics and compliance. This, of course, teaches staff how to effectively detect and report potential wrongdoing. Training also provides a context that assists in formulating employees’ own recommendations, which can help their company identify ethics and compliance breaches before they occur.

We advise introducing the issues of ethics and compliance through workshops, question-and-answer sessions, and by distributing concise general information throughout staff areas. Once an expectation has been set, more specific and visible actions—like analyzing mock cases in the company newsletter or intranet—will show that these initiatives are a serious corporate goal, and that employees should ‘buy-in’ accordingly. When a company’s employees have demonstrated an understanding of ethics and compliance and how these issue affect their company, employers are best advised to dig deeper yet again: providing role play activities and videos—like the ones WhistleBlower Security supplies to our clients—are great ways to engage staff in a cost-effective way that supports internal morale and ultimately the company’s bottom line.

Many employees have worked in their sector for decades, or at least have developed some level of expertise within areas of the business they touch every day. In order to utilize this salvo of employee knowledge about active, or potential breaches, companies must provide channels through which information can be easily provided. Conducting anonymous employee surveys or setting up focus groups are fantastic ways to get staff talking about the things they observe.  After all, employee tips are the number one way in which frauds are detected (according to the Association of Certified Fraud Examiners). And that’s not all: again according to the ACFE, companies with the means to effectively communicate tips—typically through a hotline—suffered a median fraud loss almost 60% less than companies without a hotline.

Education, therefore, is the fundamental first step in creating a strong ethics and compliance culture. While it is the starting point for creating policy and for implementing systems, it’s also what facilitates a two-way conversation, with both the company and employees developing new understandings of how human and company resources can work together. WhistleBlower Security facilitates this process when supporting our clients; we understand that companies educate employees and that employees educate companies—now on to step two: Make Information & Tools Accessible!

 

Make Information and Tools Accessible

Creating and using tools that help build a strong ethics and compliance culture is one thing—making sure that every staff member understands them is another. Educational material must be available or presented in a language and detail level that all employees can understand. If the language needs of employees are ignored, the education process is quickly rendered useless, wasting company resources, and making some staff members confused and less likely to ‘buy in’ to the ethics culture as a whole. Language considerations do not stop at education material, however. If a whistleblower hotline, or any other system for that matter, is implemented, it must be done in such a way that encourages reporting. Since whistleblower reports are sensitive and sometimes daunting to make, ensuring that employees can report in their preferred language will contribute to reporting depth, accuracy, and frequency. 

Another component central to supporting ethics and compliance is the ability to have multiple methods for reporting concerns. Making sure that employees can report concerns will, in turn, make potential breaches all the more likely to be reported. Telephone, email, fax, and web-based systems are all great methods that, when offered together, show an employee that their company is serious about ethics and compliance, and that they can make a report using the mechanism they are most comfortable with.

When the Sarbanes-Oxley Act was first introduced in 2002, companies that implemented ethics reporting systems found that having around-the-clock, 24 hour a day, support was essential. In fact, over 50 percent of calls are received outside normal business hours, making this feature a key aspect for facilitating accessibility. Another, often-overlooked aspect of the reporting mechanism is the need for multi-language reporting capability. Many companies today operate and employ people in many different parts of the World. Even those that just operate in one country, in one language, will have employees whose preferred way of communicating is in a different language. At WhistleBlower Security, we offer software that serves seven different languages.  We also have consulting personnel at-the-ready whom can respond in nearly every language on the planet!

 

Be Consistent and Keep it Confidential

There is no universally regulated approach to taking reports or responding to them. That’s why it is important for companies to lay out and follow clear and consistent policies when it comes to ethics and compliance. Having a clear line of reporting that involves senior managers is a good first step. Should senior management be a subject of complaint, a system should make provisions to bypass senior managers, instead supplying information to the board of directors or a designated committee. Defined roles and responsibilities should be made clear to every employee—this is a central cog in having a strong investigation protocol and resolution plan.

Reporting potential violations is not easy. Employees have a range of concerns, such as retribution or even losing their position. It does not help that there have much-publicized cases where whistleblowers have been ignored or treated poorly after making a report. In 2009, over half of the ethics reports made were anonymous, confirming that employees are sometimes afraid to attach their name to report; they fear whatever consequences might befall them. Since that is the case—and the information provided is so valuable—ensuring confidentiality and anonymity, if requested, is a key characteristic of any ethics reporting system. Seeing as how ethics reporting is so effective in deterring and ultimately resolving ethics and compliance breaches, it makes sense for companies to consider rewarding reports, implementing a non-retaliation policy, and retraining senior management on best practices as they, too, evolve.

 

Thank you for reading our first of four posts about ethics and compliance in the hospitality industry. Hotels, resorts, restaurants and many other categories of business have much to gain from creating a culture that empowers employees and mitigates risk. At WhistleBlower Security we create and support programs for your specific hospitality business. If you would like to learn more, please visit our contact page and get in touch!

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