When the chief of police is having an affair with a subordinate, it sends a strong message that such behavior is okay for everyone else in the ranks. That’s the way an ethics culture trickles down, says Garry Clement, president and CEO of the Clement Advisory Group. A former RCMP officer and chief of police, Clement has seen his share of misconduct at all levels and he believes that tighter controls are key to a culture of ethics in an organization, regardless of the industry.

Clement’s current work includes investigations of financial crimes and money laundering, and he rejects the notion that sanctions and penalties, instead of jail time, are enough to deter crime in the banking industry in the wake of the financial crisis, which he describes as ‘a culture gone wrong’. “I run a company; I know that if I don’t have money in the bank at the end of the month I’m not going to survive. But at the same time you have to be principled,” he says.

Sense of Entitlement

One of the problems in the banking industry, and industry in general, according to experts, is the growing sense of entitlement among senior executives. Clement agrees.

“The senior managers, even though a lot of them make large amounts of money, have got to get off this road of entitlement,” he says. “Take a look at what presidents and CEOs are making and the size of their bonuses. What message does that send to staff at all levels? I think it’s really got to come back into focus, into balance. We’re a long way from being there yet.”

Clement gives an example of a government policy prohibiting employees from collecting airline points for work travel. While travelling with senior government officials, he noticed that they turned in their points cards when checking in for their flights. The flouting of this rule became so widespread that instead of cracking down on the rule-breakers, the government simply got rid of the rule, says Clement.

Zero Tolerance for Ethics Violations

Another area rife with corruption is commissions. “Commissions are a necessary evil, but they have to have equal weight of accountability for compliance. And I don’t think organizations do provide that equal weighting,” says Clement.

“In fact, a lot of organizations don’t even assign accountability to someone who’s on a bonus system. If I know that I can sell you a million dollar product and I’m going to get a 50 thousand dollar bonus, and it might mean I bend the rules and I’m not really accountable, then why do I care because that’s really somebody’s responsibility up there,” he says.

The accepting of gifts and entertainment is another problem area, with vendors, suppliers and potential partners trying to win favor with those in decision-making positions. “There really has to be a strong set of ethics,” says Clement. “One of the companies I’ve seen that I think takes it to the right level is Walmart. They will not accept a cup of coffee. It's a very serious offense if they find out you accepted anything, regardless of the price. It’s a terrible thing to say but I think we have to get to that point in organizations.”