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Alice Peterson
SAI Global Compliance

Alice Peterson is the Chief Ethics Officer of SAI Global Compliance (Americas) and was the Founder and President of Syrus Global (whose assets were acquired by SAI Global in 2009). She is a recognized authority on the planning, execution and integration of whistleblower hotline programs which contribute to the creation and maintenance of a culture of integrity for long-term outperformance. Ms. Peterson held executive positions at Sears, Kraft and PepsiCo prior to founding Syrus Global in 2002. At Sears, Roebuck and Co., she launched and ran Sears Online, and was previously Vice President and Treasurer. She has served on public company boards of directors for twelve years including board committee work including audit, compensation, CEO search, and conflicts committees.
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Bring on the Tone. Bring on the Buzz.

by Alice Peterson, Nov 03, 2009

Thankfully the number of extremists who think Tone at the Top is all you need to achieve an ethical and compliant culture is ebbing. But they are out there. A board member (and former CEO) said to me last year, “everything I need to know about business ethics I learned at my mother’s knee.” I commented that his mother was indeed prescient to have explained pretexting to him oh so many years ago.

Let’s face it. Tone at the Top means very different things to different people. There’s strong and sincere walk-the-talk and be-accountable tone, and then there’s read-the-speech-someone-wrote-for-me (this time, with feeling) tone. It’s the difference between a finely tuned orchestra tone and dial tone.

Having a CEO with even the strongest Tone at the Top doesn’t teach employees the difference between a bribe and a facilitation payment, or how to handle conflicts of interest, or how to resolve a whole slew of inevitable ethical business dilemmas. To get integrity all the way through the organization and assure that the success we work so hard for is sustainable, companies need training, risk assessments, controls (financial and non-financial), certifications, confidential reporting processes, and other ethics and compliance program components.

Tone at the Top? What about the Buzz at the Bottom?

Those who want to know what’s really going on inside their enterprise need only listen to employees. Think of the headlines over the last few years, and name me a company with serious malfeasance where only one or two employees knew it was happening. I can’t think of one. Create the right culture and provide a few tools, and employees will tell.

Sustainable success requires both prevention and detection of undue risk-taking and wrongdoing. Sure it starts at the top. But to have a fighting chance of understanding the weak spots, companies have to develop and nurture a culture of openness and trust, and provide a highly effective helpline mechanism for employees to confidentially report issues without fear of reprisal.

The SEC gave us clues recently about their definition of Tone at the Top. The Commission required a public company CEO to reimburse his company for over $4 million earned during a period when accounting fraud occurred, even though the CEO was not found to be directly engaged in the fraudulent conduct. “[Maynard] Jenkins was captain of the ship and profited during the time that CSK [Auto] was misleading investors about the company’s financial health,” said Rosalind R. Tyson, Director of the SEC’s Los Angeles Regional Office. This precedent-setting action suggests that CEOs will now be held accountable for wrongdoing that occurs throughout the organization.

CEOs and in fact all our business leaders would do well to both (1) listen to the Buzz, and (2) dial up the Tone.

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