Two Essential Requirements for Tone At the Top

Everyone likes to give advice on the importance of tone at the top. Like many things in life, it is easy to talk about but much more difficult to implement.

There are lots of ways to describe or analyze the same issue. In the end the result has to be reached.

To boil it down, tone at the top requires leadership. That is pretty obvious. But, what kind of leadership? This is where the rubber meets the road. I am not one to stubbornly adhere to my recommended solution, but in this area, there are certain requirements that have to be met and there is not much wiggle room. Two of those essential requirements are:

Requirement Number 1: The CEO has to own E&C.

By this I mean the CEO has to believe in the issue of ethics and compliance.

If the CEO cannot stand up and speak extemporaneously about the importance of ethics and compliance to the company and his or her leadership team, then the CEO does not own the issue. If the CEO has to be spoon-fed talking points, or scripts for what to say and how to say it when it comes to compliance, the CEO does not own the issue.

On the other hand, if the CEO regularly attends company meetings and speaks about the importance of ethics and compliance, the CEO owns the issue. A CEO who knows the issue, regularly speaks about it, and communicates their commitment to ethics and compliance is a CEO who will ensure that the ethics and compliance message is heard and followed.

Even better, a CEO who carries the company’s code of conduct, knows the code of conduct, and can cite the importance of specific elements of the code of conduct is committed to the ethics and compliance program and will create a real and sustainable tone at the top.

Requirement Number 2: The senior leadership team must be held accountable on E&C.

The CEO’s senior leadership team should have defined ethics and compliance responsibilities as part of each member’s performance evaluation. (See here for insights on one U.K. company’s approach.) Each member has to know what he or she is obligated to accomplish during the year, and must be held accountable by the CEO to the performance standard.

The senior leadership team also has an important role as the CEO’s emissary to spread the word on the importance of ethics and compliance. If they are not held accountable or not given specific assignments and obligations, they will never be effective emissaries. The credibility of the team depends on performance and accountability. In the absence of real and defined obligations and responsibilities, the team is, by definition, unable to carry out its mission.

I am not trying to be overly simplistic but creating and spreading a tone at the top requires these basic requirements. A company’s CEO either is with it or is against it. If the CEO is committed to creating a culture of ethics and compliance, the CEO has to lead the senior leadership team into spreading the message to be accountable for doing so (or not doing so).


Companies get into trouble by not facing these two simple truths (or as Stephen Colbert used to say “truthiness”). I have seen too many companies where the CEO falls short on the first requirement, and the CCO and senior leadership try to make up for it by cheerleading the company’s culture. It is very easy to detect a cheerleading culture that lacks substantive commitment to ethics and compliance.

Platitudes and cheerleading do not constitute ethics and compliance. Commitment, communications, accountability, and follow-through from the CEO on down to the senior leadership team is essential for any effective ethics and compliance program.

How is your organization's tone at the top? If this is a pain point for you, contact a solutions expert to discuss training, awareness and policy solutions that can help.

Chat with a solutions expert to learn how you can take your compliance program to the next level of maturity.

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