There is one dominant message system in every organisation guiding how employees behave and it is not the code of conduct.

By far the most influential message system is the behaviour of supervisors, managers and leaders. Their behaviour tells employees loudly and clearly how things happen, what you must do and what you can get away with not doing.

Increasingly in risk-averse or values-driven organisations, it is aligned with the formal Code of Conduct. More often, as organisational cultural surveys testify, it is not. Instead, behaviour standards rise and fall with the degree of self-actualisation of department supervisors or managers. “Management style” is perhaps the greatest risk going unmanaged today.

The Code of Conduct that purports to set behaviour standards to protect employees and the organisation is like the old folktale of “The King with no clothes.” Like his fawning courtiers, compliance managers, legal managers, HR managers and others with access to inside information know better. In public, they continue to pretend that Codes of Conduct are guiding organisational standards, even as they attempt to extinguish the fires that tell them otherwise.

Ethics research shows us that that fear of retaliation is what keeps organisations stuck in this quagmire of covert retaliation, low-level bullying, risk and low morale. Aggressive managers preside over jealously guarded fiefdoms intimidating and bullying trapped employees into subservience or risk banishment from the kingdom.

Where there is a fear of retaliation other dysfunctional cultural dynamics flourish. They build up unmeasured and unmanaged risks and a crisis waiting in the wings. Boards who fail to manage management styles also remain blindsided to risk. Such was the experience of the David Jones Board when its chief executive found himself in court accused of sexual harassment and a worldwide audience learnt of the unacceptable tone from the top that prevailed.

Management’s behaviour then reinforces, undermines, or obliterates employee engagement at work and with a Code of Conduct. The legitimacy of any Code of Conduct, in fact, reflects the extent to which management behaviour is experienced as consistent with it.

The fact that more than 50% of calls to hotlines relate to HR issues such as fairness in performance management, recruitment, promotion and employee treatment highlights how employees see questionable management behaviour as their key concern at work. Other research shows a strong relationship between low employee trust in management and the incidence of workplace misconduct. So, how can management styles be managed?

First, they need to be recognised. This begins with an appropriate measurement. Measured in terms of peer to peer reviews as well as measurement of critical indices such as trust levels in managers; employee’s confidence in their manager’s ability to do their jobs; their perceived ability to motivate and mentor them or to assist them to do their jobs better.

Employees need to confirm that their manager’s behaviour is consistent with the principles of the code of conduct. If not, then an organisational context of risk is being created that no code of conduct or compliance program will protect leaders and boards from. Management as a collective has failed in its duty of care to employees.

Those organisations who manage for managerial consistency with the code of conduct set the organisational context for Code of Conduct legitimacy, employee engagement and risk management.

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