The tone at the middle of the organization is important in creating strong controls and an ethical culture.
Middle managers and supervisors have a responsibility to set an appropriate ethical tone.
Employees at all levels of the organization must understand what behavior is expected.
Much has been written about the “tone at the top.” The tone at the top refers to the words and actions of senior leadership, instilling an attitude of integrity and control consciousness within the organization. It is often assumed that, if the tone at the top is good, the culture throughout the organization will also be good. But is that assumption necessarily true?
Especially in government, where the senior management team often changes with each new administration, middle managers and supervisors have a greater responsibility to advocate for good internal controls and set an consistent ethical tone. They have daily access to front-line employees. Since employees rarely work directly with executive management on ethical issues, employees will take their cues instead from their managers and supervisors. As a result, the actions of their supervisors and managers often make a larger impact on employees’ behavior than do the actions of senior leadership.
Ethical decision-making must occur throughout the entity. Many decisions are made by employees in the middle of the organization. Agency leaders may never even hear about these decisions. However, decisions made at all levels create risks and opportunities. It is important that all employees share a common culture and ethical standard when performing their daily duties and making decisions, thus creating a positive “tone in the middle.”
An agency’s middle managers and supervisors must champion a control-minded and ethical culture. They should talk to their employees about the agency’s ethical values and make consistent ethical decisions. They also must recognize and deal swiftly and consistently with unacceptable behavior. Employees must believe that people, whether good or bad, will be treated consistently and fairly throughout the agency.
The senior management team must, themselves, exhibit the integrity and ethical values considered essential for a positive tone at the top. They must communicate their expectations to all employees.
However, senior leadership should also be aware of the tone in the middle by paying attention to the performance and attitudes of employees in the middle and lower levels of the agency. Unhappy or disgruntled employees can provide an atmosphere where rationalization of illegal or unethical behavior could occur. Employees at all levels of the organization must know and understand what behaviors are expected, and also understand that they will be held accountable for not meeting those expectations.
Finally, it is important that employees in the middle of the organization have the freedom to communicate their issues and concerns to the agency’s senior leadership, when appropriate. Employees at all levels need a retaliation-free way of reporting ethical violations or suspicions beyond their specific work units.
Suggested Action Steps: Pay attention to your organization’s tone in the middle. Is there a consistent tone throughout the agency? Are the ethical values and standards of conduct shared among all employees? Do you have a retaliation-free method for employees to report potential ethical violations or suspicious behaviors?
If you have questions, please contact Jeanine Kuwik at (651) 201-8148 or Jeanine.Kuwik@state.mn.us.
COSO Pyramid used with permission. Copyright 1992-2009. Committee of Sponsoring Organizations of the Treadway Commission. All rights reserved.