Slippery slope

Compliance alone is not always best company policy, says Harvard Business Review article co-authored by David De Cremer.

Compliance rules alone don’t breed reform to corporate culture, so companies should institute policies based on awareness and forgiveness in order to correct dangerous behaviour, writes David De Cremer, KPMG Professor of Management Studies at Cambridge Judge Business School.

When bad and even unethical decisions are made, in most business situations “people do not talk” but instead “continue down the slippery slope – all the way to the bottom,” says the article entitled “Compliance alone won’t make your company safe” in Harvard Business Review.

“What companies need instead is a forgiveness culture, a culture motivated by the goals of learning from failures and identifying slippery slopes as quickly as possible,” says the article co-authored with Bjarne Lemmich, Head of the Finance College at Novartis Pharma AG.

Episodes of misconduct are often blamed on “bad apples” rather than “good people doing bad things.” Yet previous research suggests that “all of us will be on slippery slopes from time to time,” so the article concludes that companies need to “intervene while intervention is still possible” in order to become smarter and safer firms.