Jones Lang LaSalle
Cracking the secret to an effective code of conductMore by Jones Lang LaSalle - Back to the Summer 2015 issue
Chicago-based Jones Lang LaSalle, the leading financial and professional services firm specialising in real estate, operates in 80 countries across the Americas, Europe, the Middle East , Africa and Asia Pacific managing some three billion square feet, $56bn of assets and nearly 60,000 employees.
The company has won a clutch of sustainability, energy efficiency and corporate responsibility awards including being named one of America’s 100 Most Trustworthy Companies by Fortune Magazine, one of the 100 Best Corporate Citizens by Corporate Responsibility Magazine and, in March this year, one of the World’s Most Ethical Companies by the Ethisphere for the eighth year running.
Now, the company has taken the unorthodox decision to highlight the bad stuff that goes on. To publish, publicly, details of its own ethical breaches.
“I’m not sure if what we are doing is unique,” says JLL General Counsel Mark Ohringer, “but it’s certainly pretty unusual.”
The Ethics Everywhere Programme encourages employees to report violations of the company’s Code of Business Ethics without fear of retaliation. These, which could be anything from inappropriate internet use or fiddling expenses to theft or improper vendor/client payments, are investigated by the company’s Ethics Officers and, where appropriate, action is taken, from extra training to sackings and prosecution.
Of course, there is nothing surprising about a company running such a programme internally. But publishing the results, in very comprehensive detail, on the website sounds like transparency gone crazy?
“We’d been feeding the results of the programme into a tracker database for ten years or so,” says Ohringer. “This was an early data mining effort to try and understand hotspots we needed to focus on, what issues we were commonly facing, which countries posed which problems.
“We communicated the information internally, which was a way of making it clear that we take breaches seriously, we do investigate and there are consequences. It was designed to have a sobering effect.”
But over the past five or six years, clients, like clients everywhere, started asking more questions about governance and ethics, sustainability and supply chains. JLL realised that the information they were collating internally would be useful to its clients.
“Of course there’s the fear that if you tell about the bad things happening in your company you could get a negative response,” says Ohringer. “But our clients are adults, many of them are big companies themselves. They know that no-one is free from these kind of issues. If we say we are ethical it means that we go to great lengths to try and keep as clean as possible and to deal with any breaches.
“We trust our clients to appreciate our candour. And they do – some of them say they’re getting information about us that they’re not even getting about their own companies.”
Last year, for example, ethics violation investigations led to action being taken in 83% of cases including 130 terminations of employment and four employee arrests. The number of cases of inappropriate behaviours continued to fall but instances of property theft, misuse of company assets, personal conflicts of interest (such as the undisclosed hiring of a relative as a vendor) and time-card fraud increased substantially in 2014 compared to 2013.
“Ethics statistics are difficult to interpret,” says Ohringer. As he points out, an increase in the number of complaints could mean that the ethical environment has deteriorated or it could mean that employees are more comfortable communicating their concerns. “As the percentage of complaints requiring action has remained fairly steady we believe that the latter is the case.”
Another gratifying statistic is that while there are various avenues open to employees to report concerns, from anonymously, direct to the company’s Ethics Officers, or within their own workplace, last year 83% of employee concerns were raised directly and internally. This, says Ohringer, shows that employees feel safe speaking out and understand that it is better to say something if they feel uncomfortable than suffer in silence. “Our aim wasn’t to become some sort of Big Brother, spying on employees and encouraging them to tell tales,” he says. Nevertheless, he is aware of different cultures in different countries. “In Europe, for example, compared to the US or East Asia, there is a stronger privacy culture. US employees expect less privacy, like having their emails monitored, for example.”
And, inevitably, there are abuses of the system, but very few. “You might get a couple who have split up and are trying to get each other into trouble. Or a worker who fears they are about to be disciplined trying to get in a preemptive strike against the boss. But these instances are relatively easy to spot – our Ethics Officers are very experienced. They have good noses.”
The key to the success of the programme is that employees understand the benefits of working in an company that takes ethical behaviour seriously, both in terms of the enhanced reputation of the company and client trust as well as a sense of pride in working for a trustworthy organisation and being able to pursue your career goals in a work environment based on mutual respect.
On a practical level, the Ethics Everywhere Programme involves employee complaints being assigned to an individual Ethics Officer who then feeds their results into the database tracker, explains JLL Legal’s Global Knowledge and Communications Manager, Mary Wahlen, who has been running the database for 10 years. “Then we meet twice a year for a metrics report.
“Every concern is investigated and our annual published report shows the nature of the complaint, the results of the investigation and what action was taken or why no action was taken.”
While this involves a significant investment in human resources, the cost of something going wrong – theft or, worse, reputational damage – is impossible to quantify, says Ohringer.
“We’re trying to create a virtuous circle. The fact we take ethics seriously sends out a good message to all our stakeholders. It helps us get clients, which is good for our employees, and it reassures our shareholders that we are a well-run corporation.
“Transparency is good for us. I understand the idea can scare people – talking about the bad stuff – but no smart company is going to deny that ethics abuses happen everywhere. Our message is that you can stay on top of it, you can do something about it.
“It’s when breaches get out of control that people forget how to behave and corruption becomes systematic. Then you’re dead. You’re facing government investigations, police investigations and lawsuits and managers have to spend all their time defending themselves rather than being out there making money. And that is bad for all the stakeholders.
Even if a programme like ours sounds daunting, you can do something. And that is better than doing nothing. We didn’t do everything at once. We used internal software and resources rather than making any big purchases. We took baby steps, learning as we went along, tinkering with the system, adding to it. We learned from our little mistakes rather than waiting to learn from a big one.
“Getting on top of the situation means, hopefully, that there will be no big surprises. That’s what we’re trying to do: avoid the big surprise.”
more about Jones Lang LaSalle
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4.7bn and gross revenue of $5.4bn, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4bn square feet, or 316m square meters, and completed $118bn in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $53.6bn of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. Further information: www.jll.com.
Jones Lang LaSalle recognises that being open about transparency carries both risks and rewards. It involves trust on both sides of the client/firm relationship. But, as the firm says, “our clients are adults... they know that no-one is free from (ethical) issues. We trust our clients to appreciate our candour.” This level of openness is to be applauded and it is an indicator of a company that is taking ethics seriously. Not every company will be ready to open up its internal reporting in this way but it’s certainly worth considering how to use existing systems and data to build a more open culture. What the Ethics Everywhere approach illustrates is that small steps can lead to some big ideas.
Points of note:
• A healthy 83% of employee concerns are raised directly and internally, not via anonymous external helplines
• Getting a system like this to work effectively requires significant investment in HR but the payoff in terms of limiting reputational damage is worthwhile
• Taking ethics seriously sends a strong message to clients, employees and shareholders.