"Prioritizing Corporate Culture: Lessons for Companies from the Major League Baseball Sign-Stealing Investigation" from Latham & Watkins very effectively uses a recent Major League Baseball incident that triggered the firing of the GM and Field Manager of the Houston Astros (based on the notion of their leadership accountability - regardless of actual culpability) to impart these important lessons about corporate culture:
- Institutional culture matters not only because it reflects an organization’s values, but also because regulators are watching.
- Corporate managers must adequately supervise their employees, set the right tone, and demonstrate rigorous adherence to high standards.
- Corporate managers must stop bad behavior as soon as it occurs, with the knowledge that mild objections may be seen as not only condoning but also effectively encouraging misconduct.
- Companies should work to develop not only a “speak up” culture, but also a “listen up” culture.
- Institutions that lose sight of their values and prioritize short-term results while discounting the future frequently run into problems.
- When misconduct does occur, companies should impose meaningful sanctions.
Each of the key takeaways is supported by the facts and translated or easily translatable to a corporate environment with reference to DOJ guidance on corporate compliance programs, where relevant. The memo also notes the importance of measuring and monitoring culture via, e.g., employee surveys, exit interviews, and various quantitative data including training completion levels, employee turnover, absentee rates, and hotline reporting information.
See also "Compliance into the Weeds: Episode 155-Lessons from the Astros Sign Stealing Scandal" from Compliance Report; our prior reports: "Corporate Culture Matters!", "Corporate Culture Oversight: Tips & Tools", and "Corporate Culture Oversight: Here's How!", "Corporate Culture Deemed Important Regardless of Orientation"; and additional information & resources on our Corporate Culture page. This post first appeared in the weekly Society Alert!