Culture & Compliance Chronicles: A Journey into Team Ethical Culture with Guillem Casoliva Cabana

On this episode of Culture & Compliance Chronicles, Amanda Raad and Nitish Upadhyaya from Ropes & Gray’s Insights Lab, and Richard Bistrong of Front-Line Anti-Bribery, delve into the intricacies of corporate culture and compliance with special guest Guillem Casoliva Cabana. A seasoned traveler and compliance manager at Booking.com, Guillem takes us on a journey through his academic and practical experiences. The conversation covers the importance of understanding team ethical culture, the role of direct managers in shaping it, and how ethics ambassadors can be used to support compliance programs by acting as a bridge between compliance teams and employees.

Transcript:

Amanda Raad: Hello, everyone—it’s Amanda Raad from Ropes & Gray. We’re back with the latest episode of our Culture & Compliance Chronicles, a collaboration between Ropes & Gray’s Insights Lab and Front-Line Anti-Bribery. I’m joined today by my colleague and R&G Insights Lab director of behavioral insights Nitish Upadhyaya.

Nitish Upadhyaya: Great to be back, and really excited about our guest today. We have had the pleasure of sharing the stage together, and we spent so much time talking about culture, compliance and, interestingly for me, bringing academic insights into the corporate world. Before we get to our guest, we’re joined also today by our co-host, Richard Bistrong, chief executive officer of Front-Line Anti-Bribery. Good to be back recording with you again, Richard.

Richard Bistrong: Nitish, Amanda, Guillem—it is a pleasure to record our second episode of Culture & Compliance Chronicles. I had the pleasure of seeing Guillem at the SCCE’s European Compliance and Ethics Institute, where he talked about innovation in training—it was a wonderful session. And just to keep the conversation going, we also met more recently in the May-June timeframe in Barcelona, so we’ve had a bit of a world tour together.

Nitish Upadhyaya: Guillem, welcome. Let’s do a rapid fire round to help the audience get to know you. Give us three things we should know about you.

Guillem Casoliva Cabana: Hello, everyone—really happy to be here with you. Yes, let’s get started. First one: I’m a traveler. It’s not just that I work for Booking.com. As you may know, we help people experience the world, but it’s also my vital professional background that brought me to many places. I was born in Barcelona, where I studied communications and psychology. But my passion for ethics, integrity, and compliance—all this world—started during my 10-year stay in Manchester, in the U.K., where I did a bit of post-graduate study and research on the relationship between employee loyalty and speaking up. Then, I completed my PhD thesis at Rotterdam Business School. And now, I’m back in Barcelona. Second, I like to be a bridge between academia and business. Even before my PhD, when I was already working for my company, I always had this motivation to leveraging research insights from academia to improving actual compliance and ethics programs and issues in the compliance and ethics field. But at the same time, I also always like to challenge and enrich scholar approaches with my professional experience when sometimes theories or recommendations may miss some developments, etc. And my third point to describe myself is that I’m passionate about education and the immense power that it has to change the culture, including the corporate culture, of our workplaces. So, education, awareness, and culture assessments are now the main focus of my day-to-day job as compliance manager at Booking.com.

Nitish Upadhyaya: Amazing. Now that the audience knows you better, I have a couple of left field questions for you. What’s one thing you’re curious about?

Guillem Casoliva Cabana: I would say: Why do smart people commit misconduct? I always wonder, can it be a cost-benefit analysis, like rational things that we do with many other things in life because the consequences are terrible if you are caught? You have to consider other, deeper factors like emotional, social, even psychological rationalizations. I have always been interested in that and how people with good salaries and nice lifestyles put everything at risk. Obviously, this has an implication for our compliance programs, policies, and controls. I’m always wondering, “Do we need to prepare to design policies for this minority of sophisticated rule-breakers, or for the majority?”

Nitish Upadhyaya: Such an interesting question. I think we’ll dive into that a bit later in our discussion. This is a show that talks about human behavior. To prove that you’re human, Guillem, what’s the last thing that surprised you?

Guillem Casoliva Cabana: After so many conferences and reading articles—we have mentioned a few of those already—I still don’t understand, and it surprises me, how little we know about compliance and ethics program effectiveness. One example is we use A/B testing everywhere in the world, and beyond that, however, it seems difficult to apply that to compliance training. It apparently shouldn’t be that difficult.

Nitish Upadhyaya: Another thing, Guillem, is so close to my heart: measuring training effectiveness. I think from all of us, there is a massive congratulations due for having made it through your PhD. Richard, let’s introduce the audience to all of the work that Guillem has been doing.

Richard Bistrong: Fantastic—what a pleasure. The title of the thesis is Unraveling Team Ethical Culture: The Existence, Relevance, and Implications for Ethics Management. The things that he talks about being curious about and that surprised him are addressed in his thesis. I think the key word here is “bridge,” because what you’ve done here, Guillem, is you’ve taken deep, peer-reviewed academic research, and you bridged it to practical, actionable steps that ethics and compliance leaders can take, so I’m really excited to talk about this. Let’s get into the content. I think the first thing to level set for this discussion is much of the thesis is around team ethical culture. Can you share with us what is “team ethical culture”—because usually we just talk about “ethical culture”—and why should we be paying close attention to team ethical culture?

Guillem Casoliva Cabana: Yes, absolutely—the main topic of my thesis is team ethical culture. To start with, the relationship that you said with ethical culture is only about level, so the definition is very close to ethical culture, however, we have to think in a team. The formal definition is “the shared set of experiences, assumptions, and expectations of managers and employees within a team about how their organization prevents them from behaving unethically and encourages them to act ethically.” Then, we have—and I had used in my thesis—a model by Muel Kaptein that includes eight dimensions that are easy for everyone to understand. What are these conditions that the organization can enact and build to support ethical conduct?

• The first one to understand ethical culture is clarity. Is it clear within the team what is right, what is wrong?
• The second and the third are role modeling by the supervisors or direct managers, and role modeling of management—the highest level in the organization.
• Then, there is the fourth dimension that is feasibility. Are there the resources to do the right thing to achieve the objective, the KPIs [key performance indicators], in the right way?
• The fifth one is supportability. There is an understanding of mutual trust and fair treatment between colleagues.
• The sixth here is transparency, which is there is the perception that unethical behavior is detected in the organization.
• The seventh is discussability, which is the ability of colleagues and employees to discuss ethical dilemmas and ethical angles of business decisions.
• And the last one, the last dimension, also very important, is enforcement. When there are breaches in the organization, breaches of the code of conduct, are people held accountable or not?

All these perceptions together create a team ethical culture. Is this relevant to know that at the team level—as we had started saying—it’s very similar to ethical culture? Risk is not evenly distributed within an organization, so the average ethical culture of the whole organization wouldn’t help in that regard. Risk is not evenly distributed, and behavioral risk happens the same. So, even though the average can tell us things about the benchmarking and our evolution over time, the reality is that a few teams in specific locations or departments could have very weak team ethical cultures, and be very close to, or already involved in, misconduct. Team ethical culture’s main function is as a tool of prevention to detect granular behavior risks.

Nitish Upadhyaya: That gets to the nub of so much of what we want to discuss and what we will cover in the podcast series, is that not everything is the same as an average. There’s the standard story of there are nine people in the bar, and their average wage is $100. Bill Gates walks into the bar, and suddenly, the average skyrockets. It doesn’t tell us anything about the rest of the individuals in the room. And actually, taken without context, you might have a completely different perspective—in this case, culture of an organization—if you’re not looking at outliers or other parts of teams. So, how do you dive into that?

Guillem Casoliva Cabana: I think that the first thing regarding team ethical culture is the measurement. Normally, what we use are surveys—surveys that are distributed to all employees at least once a year. I think that it’s important that we use questions that are validated that, for people that are not too much in contact with academia, there are at least a few very good, validated scales. What I mean by “scales” is a set of questions that you, our public, can use in your surveys. Why I’m recommending using these questions and not others is because they have been validated and tested with different samples, so we are quite sure that they are measuring what we want to measure, ethical culture, and in this case, on the team level. I think that we established that at Booking.com in 2017, and we are doing that every two years. Some people ask me, “Why every two years—not every year?” The reality is that cultures don’t change as fast. And also, compliance and ethics teams, if you really want to digest the data, creating sites and action plans—nine months, 10 months, and a year—it’s really difficult to accomplish that in a sustainable way. What we achieve with that are measurements by teams, departments, and regions, so we have an internal benchmark as an average, as a company, if we go in the right direction or not, and—what we were discussing before—to know exactly where are there pockets of teams that have weak team ethical culture. So, that’s a big, I would say, investment in terms of measurement. But that doesn’t explain the whole history. Surveys are limited—they can flag risk sometimes, but they can flag other things.

The second thing that we also do at Booking, and I would recommend as a best practice, is to do follow-ups to those results. Not the action plan or remedial action—we will get there—but follow-ups to better understand why this team or set of teams in a department scored very low. How can you follow up as a compliance professional? Basically, you can set interviews with people in that team or in that office—that’s one thing. You can do focus groups if you feel more comfortable. I would say that, in this case, a good rule of thumb is if the group that you are interested in is big enough that they don’t know each other, I would recommend, for example, focus groups. If it’s a very small team, go for interviews.

Then, the third one, also very important for compliance professionals, is we have more data than that survey—we have investigations data, training completions, engagement surveys, etc.—let’s triangulate this data to understand. It’s just that the whole engagement of this office is very low, or it’s just specific ethics and compliance. There has been a big compliance and ethics case in that office or in that team, that could be the consequence because people observe unethical behavior—now, they are very disappointed. Or it could be simply that there is a toxic, weak team ethical culture. In any case, after the follow-up, you will understand better which I call, “low” or “priority” scores you need to address. That’s the third part that we also do at Booking.com that, when we have this contextual information to the survey, we design remedial actions. Based on your resources, what can you do? It’s not training all the time. It could be life sessions targeted to the problems that you discover when you are investigating the context, it could be communication, or it could be a recommendation to management to change KPIs. So, there are broad types of interventions you can do.

Amanda Raad: When people take the time to participate in surveys, focus groups, interviews, and everything else, it does take a certain level of engagement, energy, time, and all of those things. You talk about the importance of transparency too. One of the things that I hear from a lot of people is this question about what kind of feedback are you able to give to people for their participation? What do they get back? What kind of transparency do they get back to understand what are the results of what you’re seeing, and how do those back up the recommendations and the plans or the changes that are going to happen? Can you just talk a little bit about how you think about that? What level of information you can share from the survey results or from the work that you’re doing, and what you see works or doesn’t work in that regard?

Guillem Casoliva Cabana: Obviously, there is some fatigue about surveys in the workforce, so we need both to justify why we are doing the survey, but also what this survey gives back to you, to the company. What we normally do with the ethical culture survey, we have to think first that it’s a more sensitive survey, I would say, the engagement survey, so we do an overall overview of the results. For example, how well-perceived is the compliance and ethics program by components? How well-perceived is the ethical culture and dimensions, and the rate of unethical behavior observed? And then, we also explain year on year how we are doing, and a bit also to give context with external benchmarks if they are available. It’s the snapshot of the overall company. Then, we always disclose at least three actions that we are going to take. Normally, there are ways in which the survey informs our compliance and ethics program—that’s for all employees. What we do then with all this more granular data at team level or office level is to have the compliance and ethics team work with the management teams to explain how we are assessing this information and being a partner in understanding that. So, I would say, there are two levels of communication. One, very important, that is to inform the people who spend time filling out your survey. It has to be a minimum of the general results, trying to put that in context with benchmarks year on year, and explain a few things that you will do based on that result. And then, for the granular data, I would say, it could be by department or by region—you could do reports if you really want the support of different leaders in these action plans.

Nitish Upadhyaya: I’m so glad, Guillem, that you picked up on so much of those areas from Amanda’s question around what feedback do you give and how do you make this something that people want to help out with and be part of the community and the culture within the organization, to the points you raised previously around triangulating data using both qual and quant, getting qualitative narrative feedback about why things are happening in order to really get to grips with the context that you’re seeing in surveys. Again, we’ve talked about the fact that surveys are one tool, and they are sometimes a simplistic tool in doing that.

Let’s zoom out then. We’ve talked a bit about the tool kit, and I think we really got you into some of the detail, but I know Richard has been thinking more about some of the bigger statements in your thesis around the nature of an ethics program and how that might be structured or work. Richard, take us through some of the other musings that you had on Guillem’s work.

Richard Bistrong: One of the statements—I double highlighted it because it was so counterintuitive—is you share a well-implemented ethics program is insufficient to prevent ethical behavior. Guillem, that just seems so counterintuitive to the ethics and compliance discourse. So, maybe you can share why a well-implemented program might not prevent good ethical behavior.

Guillem Casoliva Cabana: I think that the understanding is unethical behavior. Just to clarify this—always prevent with unethical behavior. Basically, a term that is used in academia—we call it “decoupling,” and in the business world, we call it “greenwashing,” so, it’s similar—which means that you do all the check-the-box exercises, but nothing happens. The difference specifically between having a program and not implementing it, that’s the classical example of greenwashing or decoupling. The one that I was interested in, and this is so counterintuitive, is that when the compliance and ethics program is well-implemented, but still doesn’t achieve the objectives of the program, which are preventing/reducing unethical behavior, and promoting speaking up. This link, I think, is really important for compliance and ethics professionals to think about. I think that there was the assumption that, if you implement—and by “implement” I mean you design, you put in good content, and you communicate that to the workforce—that’s enough, and as a result, people will be ethical. Why? Because they have the information. With my thesis, I tried to say that this is a bit more complex.

Richard Bistrong: Let’s talk about decoupling. As you shared, we’ve got a well-implemented ethics program that separates from ethical behavior. What are some of the lead causes that ethics and compliance leaders can look at to understand why something that’s well-implemented does not have the outcomes that we would expect?

Guillem Casoliva Cabana: Let’s see it in different parts. First one is the level. Ethics programs are well-implemented at the organizational level. “We have a website. We have a help line. We distribute training to everyone,” and so on. That doesn’t mean that it’s well-implemented at the team level. What does it mean exactly? Is the training relevant on a marketing department in which the biggest risks are high or very demanding KPIs that can foster fraudulent behavior? The implementation at the organizational level doesn’t mean that it’s effective in each team because of regional differences, business unit differences, or tenor of the employees—there are a million things that could affect that. One of the factors I like to highlight for compliance and ethics professionals, which I believe is the future of the field, is customization of compliance and ethics programs—one-fits-all, from training, the help line, the transparency report, and also other components that we can discuss later like ethics ambassadors or ethics moments. So, there are different ways that we can approach this diversity within the company.

The second part: the effects of the code of conduct, the help line, the compliance team on unethical and ethical behavior, both, are mediated by the team ethical culture, where you spend more time. It doesn’t matter—and there is a lot of research about that—if the company has a great compliance and ethics program, but your manager is a bully or your manager is a fraudster, your impression about the culture of that company would be terrible, and maybe you feel that you can also commit unethical behavior. This important role of team ethical culture is important because it will affect these impacts of the compliance and ethics program on the behaviors of the people. Then, from that, I would like to highlight another important aspect for compliance and ethics professionals: it’s the role of direct managers.

A team ethical culture is created around a manager. I know that now there are a lot of teams that act differently with product teams not having the same managers that you have every day—I’m talking about the general teams, that there is a direct manager, and the direct reports all work closely together on a daily basis. In those situations, the manager decides the task assignments, the rewards and the punishments for behavior, the career progression and opportunities, so with that, it’s creating a micro-culture. What is the big question here for compliance and ethics professionals? “Are we leveraging that? Do we have that taken into consideration?” They are an important, I like to say, constellation of team ethical culture that maybe you cannot reach out to this diversity with a company-wide initiative. But if you have taken them into account, it’s very important to upskill them—make it clear what they need to do as leaders in their team in regard to compliance and ethics. So, stating the responsibilities, creating awareness about the resources, and starting this, I would call, involvement of direct managers with your compliance and ethics program.

Nitish Upadhyaya: You talk a lot about personalization and making sure that the compliance program that an individual gets is fit for them, their role, the way in which they do business, the nature of their experience, and you also mentioned ethics ambassadors, which I think are an interesting way of bringing context and understanding about the business unit or the area in which someone’s operating, and dovetailing that with compliance and ethics. Talk us through what are ethics ambassadors. What are they solving for?

Guillem Casoliva Cabana: I am very proud of the ethics ambassadors, and I think that they’re a really underused resource in compliance and ethics. Why? It’s very cost-effective and, at the same time, handles this complexity that we were talking about with internal diversity of team ethical culture. How do they do that? Basically, ethics ambassadors are volunteers or champions—I like to define them as “facilitators of speaking up.” They act as a bridge between the compliance and ethics team and the teams and employees around the world. They advise colleagues on how to speak up and, at the same time, they create awareness about compliance and ethics resources. Here is the important thing: because they are based in that region or are part of that specific marketing department, they are able to customize the message or to prioritize, to say, “This campaign is not really relevant for us. Let’s do something else instead.” So, it’s a two-way communication.

The compliance and ethics team, we use them to launch our campaigns, to support people that want to speak up, for example, the non-retaliation policy and the diversity of reporting channels, but, at the same time, we pay close attention to what they tell us about the business units and about the culture they experience. I have, for example, a nice example of how there were investigations that were unrelated, in my experience, and then, it was thanks to an ethics ambassador’s explanation about the pattern that I understood that they were not isolated at all. So, let’s face it, the compliance and ethics teams are limited in resources. Also, in large, multinational companies, we are limited in what we can really, as individuals, learn about the business units, business models, and the incentives of each department. Having this ethics ambassador network provides you timely and relevant input where you can pay attention, discover patterns, and build this ethical culture across different teams.

Richard Bistrong: I think there’s such a strong behavioral component to that, Guillem. One of your fellow scholars, Amy Edmondson, in The Fearless Organization, addresses, “Who do we turn to when we face an ethical dilemma or an ethical challenge? We turn to our supervisors, our peers, the people that we feel comfortable with.” When you have these embedded compliance ambassadors or compliance champions, those are the people that are accessible and they’re available, and I think that has such a huge behavioral and practical implication. And what’s really neat—it’s like looking at some client work—there’re a number of organizations where now there’s a waitlist to become an ethics ambassador. So, I think that more and more organizations are realizing this is such an incredible way to go to broadcast doing what’s right throughout the enterprise.

Amanda Raad: I agree with all of that. To go back to the bridge point that we’ve talked about a few times now, I really like the idea of thinking about the ambassadors as being almost like a cultural bridge, because you say that they can be accessible and available, and helped the colleagues that are there locally, but I think these ambassadors are extremely helpful to the overall organization to also be the ears in the translating things back to help the global organization really understand, to be a bridge—really understand what’s going on in all of the different places. So, it’s a little bit about input and output, and I think the bridge analogy carries through really nicely.

Guillem Casoliva Cabana: If anyone wonders about the resources to set up an ethics ambassador program, I would say that they are minimal, but are not zero, which means that you need a coordinator, someone that dedicates full-time or part-time to do different things, from training to communication points—it could be monthly newsletters or quarterly webinars. So, touchpoints with them. It also provides them with some materials. People are busy in their day-to-day work, so the compliance team is well-placed to produce decks, videos, and things that they can reshare and adapt. As a valued role in the organization, I would say that, if we think creatively, it also helps with the Department of Justice guidelines about rewarding ethical behavior. How do you think that ethics ambassadors can help with that? In my mind, an ethics ambassador role is temporary, so it’s not for the long tenure of you in the organization. It could be one or two years, so then you can really incentivize these roles in different ways—it could be monetary, learning opportunities, conferences, or plenty of things. That is a way that, as an organization, it’s accessible to everyone—anyone can apply for the role—and we prioritize, allocate some budget, and some opportunities for the people that do this extra-mile work.

Nitish Upadhyaya: I think that picks up really on Amanda’s point before around how you reward people that are putting that time and effort into really building this culture and community, which could be difficult to do. But I think some of the case studies that we’ve talked about from Booking.com have proven really intriguing as to what motivates people to even be part of these programs. What do they get? What meaningful reward do they get out of it? Often, it seems it’s not just monetary compensation necessarily, it’s not even necessarily access to training programs, but this general uplift of culture and having pride in your community is a big piece of that.

Guillem Casoliva Cabana: Absolutely—I agree with you. I think that is also part of the maturity of the program. First of all, you need to assess if they are active or not—it’s not just the title. In this case, it could be also a decoupling, so we also assess that. But based on that, I think that the starting point is leadership recognition. A message from the CEO or the chief compliance officer is an example—that helps them. Then, also, you can go to merchandising, offering them merchandising to be visible and recognizable. For more mature programs, you can develop network opportunities—that’s what we did this year for the first time with a global ambassador summit. Ambassadors from all over the world joined for a two-day session that was about skill sets and networking—not only with the ethics community, but it was with all the other ERGs, security, and sustainability communities, so everyone that shapes the culture of the company together—and that was very well received as a recognition for the role.

Nitish Upadhyaya: I love it. Networks, connections, and building communities across organizations—ultimately, that’s what shapes resilience in society, and that’s what shapes resilience in organizations as well, so what a brilliant thing for us to end on. We’ve dived into so many things. We talked about team ethical culture, interesting definitions that you brought from academia, but made live for the corporate world. We’ve just talked about ethics ambassadors. I’m sure we could go on forever about training effectiveness and measurement. Thank you so much for your thoughts, time, and expertise. Lots of the papers and concepts that you’ve talked about and that we’ve discussed today will be available for our listeners in the show notes. I’m excited because I get to see you again in person very soon at SCCE’s Compliance & Ethics Institute in Dallas, where we’re going to share the stage and break down the buzz of dashboards and analytics and, again, bring a practical bent to some of the higher-level concepts and the abstract things that people are talking about.

Richard Bistrong: Guillem, we just made it through chapter three of a five-chapter thesis, so I have a ton more questions, and I hope you’ll join us again. I just wanted to add that my biggest takeaway that really is a great framing is that, to use your words, “organizational culture is really nothing but a constellation of team ethical culture.” That is just so resonating. I just wanted to thank you again.

Guillem Casoliva Cabana: It was a pleasure, the discussion with you. Thank you for having me.

Nitish Upadhyaya: Thank you all to our listeners for tuning in to the latest episode in the Culture & Compliance Chronicles series. We’ll have information, as I said, in the show notes for all of these concepts. And, of course, feel free to get in touch with any of us. Guillem, I’m sure, will be delighted to receive questions and further ideas about where he’s taking his research. Amanda, Richard, and I will be back very soon for our next chapter. And, as ever, if you have any thoughts about what we discussed or, importantly, what you’d like us to cover and dive into, we’d love to hear from you. You can subscribe to this series wherever you regularly listen to your podcasts, including Apple and Spotify. Thank you all for listening and see you very soon.

Show Notes

Unraveling Team Ethical Culture: The Existence, Relevance, and Implications for Ethics Management (Casovila Cabana, Guillem): https://www.erim.eur.nl/research/events/detail/5742-unravelling-team-ethical-culture-the-existence-relevance-and-implications-for-ethics-management/

SCCE 23^rd Annual Compliance & Ethics Institute (September 22-25, 2024, Grapevine, TX or virtual): https://my.corporatecompliance.org/s/community-event?id=a1m5f000002SamWAAS