Obtaining sensitive information to get the true picture

1. Obtaining sensitive information to get the true picture Research study conducted on behalf of the Institute of Chartered Accountants in England and Wales, Feb-April 04 Presented at the Insight Show, Oct 25 2005

2. What this paper is about • An unusual and complex research study • Grappled and explored people’s personal and professional ethics and the conflicts of interest they face • On behalf of a professional and regulatory body concerned with best practice • To help guide its future service delivery • The paper will relate context, approach, method and outcome • And highlight learning gained (positive and negative) from the study

3. What this paper shows That it’s possible to apply careful and traditional research methods… …in order to unpick questions that an organisation has, even if they wonder whether these questions could be asked/answered… …and successfully gain useful, creative and contemporary answers and output

4. Why we think you’ll find it interesting • The subject matter is juicy, gritty, thorny, real, human (and many of us deal with Chartered Accountants!) • It highlights the importance that ethical dilemmas have in affecting people’s behaviour when interacting with an organisation • It gets to the heart of why people behave in the way they do when it comes to dealing with ethical issues • It talks about the strengths and weaknesses of a particular research method and approach for tackling this issue • It shows the positive outcome that can be achieved by an organisation by tackling such issues head on

5. BACKGROUND

6. Understanding the wider context Media power Diminished status of professionals? Consumer rights CULTURE OF FEAR, HYPE, WATCHING BACKS Major scandals Brand awareness Corporate responsibility High time that ethical dilemmas within organisations are more openly addressed

7. Understanding the ICAEW context Media power Diminished status of Professionals? Consumer rights Increasing member demands Threat to brand Development of CPD Waning public confidence? Major scandals Brand awareness Ongoing concern with best practice Ongoing desire to meet member needs Corporate Responsibility

8. Objectives of the study What can the ICAEW do to allow members to better deal with the ethical issues that they might face in their professional lives? Findings to specifically guide development of the ICAEW’s CPD training programme To ultimately ensure that the integrity of both the ICAEW and its individual members is maintained

9. Why was the study sensitive 1? • HOW ARE WE ACTUALLY GOING TO ACHIEVE THIS? • Threatening scenario, not commonly addressed • ICAEW as regulator! Threat to professional identity/status • Divided loyalties? • How can I be sure what I say won’t be used against me? • Why now? Why me? • Realisation of issues in first place • Whose ethics? By whose standards? • Need to articulate; how much will members tell us? Unpicking the complexity • Comprehension of each member’s unique professional scenario • Research fatigue • Need to go beyond superficial

10. Why was the study sensitive 2? • WHAT ARE WE GOING TO FIND OUT – AND HOW ARE WE GOING TO DEAL WITH THIS? • What ethical issues? How serious will they be? • Will they reflect poorly on anyone? And if so, who? • What impact is this likely to have? • Confidentiality vs. need to act? • Confidentiality vs. need to understand unique context • Application of unique scenarios for benefit of everyone

11. Summary so far • Professional organisation concerned with best practice and preservation of its status and heritage • Operating within a culture of heightened tension and fear • Realises the need to address a highly sensitive issue – for the benefit of itself and its members • Whilst also being mindful of the potentially damaging consequences that addressing this issue might bring

12. THE APPROACH

13. Core elements The right briefing Getting the right people Iterative Controlled Flexible Respectful Enthusiastic Regular updates Recruitment methods Strong team Interviewing practice Analysis process

14. The right briefing • By trained Chartered Accountants • With strong business background • Lists of questions and possible scenarios • What to expect, what to look out for • Strong emphasis on language and terminology • Use of background case studies • Use of existing training materials and relevant literature

15. Getting the right people • Enough experience to talk knowledgeably (10+ years PQE) • Previously taken part in consultations; claim to be happy to do so again • Sufficiently large sample size (26) to ensure accurate reflection of market

16. Best practice for recruitment, interviewing and analysis RECRUITMENT INTERVIEWING ANALYSIS Understand context; micro and macro Use of templates Signed letter from ICAEW Use case studies and 3rd person Regular analysis reports Consultation not research Varied language (eg conflicts not ethics) Mtgs with core/wider team to analyse, check Recruiter = researcher Asking if can go back later with questions Occasional re- contacting members CPD context Reviewing subsequent output Appropriate incentives Opp to be involved in analysis

17. Regular updates • Culture of constant and shared thinking • Openness to ideas • Use of day to day stimulus (newspapers etc) to spur on thinking • Fortnightly meetings • Conference calls • Email circulations Momentum. Thirst for insight throughout.

18. Strong team Researchers Specialists Often with broad background as well Common goal, willingness to work together Management Consultants Member Services, Education & Training specialists IT specialists Ethics Advisory Service

19. Although things weren’t always straightforward • Clamming up mid-interview, refusing to have conversation recorded • Difficultly in overcoming euphemisms and superficial comments • Overly technical or specialist comments • Contradictions in relaying of events; possibly poor memory inaccurately reflecting actual situation • Referral to previous places of work – of which researcher had no contextual understanding

20. And, like all consultations, there were still some grey areas How much did members really tell us? (either wilfully or without realising) Did we really manage to unpick every aspect of the issue, given that we only got one person’s perspective for a short period of time?

21. Summary so far • Careful and traditional approach • With focus, energy and commitment from all those involved • Strong element of teamwork and sharing of individual strengths and areas of speciality • Awareness of individual responsibilities • Respect for everyone’s time • Mutual understanding of need to use research to help guide thinking – with sufficient flexibility in process for maximum benefit • And above all, a shared sense of humour throughout!

22. WHAT WE FOUND OUT

23. Overall 1 • Conflicts of interest definitely exist in most people’s lives • They emerge because of differing loyalties and motivations – and because of the fear of the repercussions that could occur should they act on these in a certain way • Loyalties and motivations tend to be; • Commercial • Moral • Professional • Corporate • Personal Sometimes it’s not clear whether something is ethical or not

24. Overall 2 • The situation is not helped by a general culture of outward discussion/rhetoric about ‘ethics,’ rather than engagement with how to deal with the reality of such issues • It’s also not helped by a general inconsistency in the way that many organisations deal with conflicts of interest

25. Quotes You do get into the whole politics side of it (ethics). You don’t want to see yourself as going against what they’re thinking Most people want o be seen to be adding value to the corporates in which they work There are procedures in place but I have my own private views on how that’s been developed or operated over the years – I don’t think it’s been entirely consistent

26. Overall 3 • Conflicts of interest seem to become increasingly problematic when they’re faced by; • Middle level people who can’t pass the buck but don’t have the authority or confidence to simply say no • People who don’t feel able to express their concerns • People who do not think in the same way as their bosses • Those who really know their colleagues/built up relationships • Those in organisations where Trade Unions are involved • Those who work for organisations which operate in certain countries and/or where that individual works abroad • Those in organisations who primarily focus on short-term commercial gain more than a longer-term commercial strategy • Those in organisations where it’s not clear what the corporate agenda/’line’ really is

27. Overall 4 People think about, and deal with, conflicts of interest in different ways • HARD DONE-BYS. Begrudge conflicts of interest. Deal with them but think they’re unnecessary intrusions • ACCEPTORS. Pragmatists. Will work through issues happily • RUTHLESS AVOIDERS. Will do whatever it takes to stop the conflict of interest dead • COMMERCIAL OPPORTUNISTS. Love conflicts of interest. A disguised blessing. Will do anything to turn issue into commercial advantage • COMBATANTS. Will deal with conflicts of interest with gusto but principle focus is to ensure that their professional integrity remains in tact • FEARFULS. Are terrified of conflicts of interest and prefer to avoid them at all costs

28. Emergent conflicts of interest Different cultural norms, inc bribery and pay-offs Personal conflicting with professional eg trading in politically sensitive areas Retaining objectivity in face of client hospitality/gifting Knowing that one’s actions will have damaging effect on colleagues Dealing with others’ agendas (particularly bosses) when this conflicts with own role Admitting mistakes when this might not be the best option overall Compounding global imbalances by using commercial/political power

29. Quotes Hospitality is just a fact of life. It’s not something that the Institute should be proud of, but no one would deny that this doesn’t take place Sometimes you have to decide whether you want things to go away or whether you want to deal with it. Sometimes things could be seen as being paid to go away although I’d say that they’re simply part of the negotiating tactics I’d like to think I’d never be compromised. But I do see that people push the ethical limits to secure a particular commercial issue

30. Quotes The commercial view that’s put on commercial transactions is quite often sailing the wrong side of the wind as far as the tax authorities are concerned I know partners in all the X firms, and they will all tell you they are salesmen first and foremost The younger generation is growing up with very different views about what is right and what is wrong

31. Overall 4 • The effect of such conflicts of interest is significant stress, insipid but on-going damage to morale and motivation and the potential for a lot of wasted time/energy • Successful mechanisms to deal with such conflicts of interest, however, can have the reverse effect and engender loyalty and productivity

32. Mechanisms can have the reverse effect Allowing people to talk and ask Making aware of the issues that they might face and the implications of their actions Staff have knowledge about situations in which they’re working Willingness and commitment to working as a team Communication of clear corporate agenda and ethos Longer-term vision as well as short-term commercial success Holistic assessment of staff – including how ethically they behave Leadership, ability to stand up for what’s right as well as listen and negotiate The ICAEW was able to address many of these…

33. RESEARCH OUTPUT

34. Overall – a reminder It’s possible to apply traditional research methods… …in order to unpick questions that an organisation has, even if they wonder whether these questions could be asked/answered… …and successfully gain useful, creative and contemporary answers and output

35. On-going training • Development of a CD Rom and additional section of the ICAEW website • Entirely dedicated to ethical issues • Offering a range of case studies • On-going member opportunities to add own experiences FDs will face ethical dilemmas and if the Institute won’t address them, I’m not sure who else would Useful, creative and contemporary!

36. How it works 1 • Several case studies to choose from (c45 at present) • Or member can type in relevant examples by keyword, area of responsibility, role, industry sector or issue • Choice of delivery format; • Conversational (Flash; opportunity for member to look and consider range of angles/responses in own time, plus opportunity to pose questions/get answers) • Interactive (Flash; presented with different angles to reflect upon but need to respond quickly, less opportunity to reflect • Plain text (series of short paragraphs of how case study might be approached)

37. How it works 2 • Opportunity to learn about ICAEW’s recommended Best Practice • Inclusion of useful links/related articles/ICAEW Reference Guides and written materials at end • Additional links to related case studies • Ability to contact ICAEW’s Ethics Advisory Service – email/phone

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46. On-going benefit to ICAEW and members • ICAEW • Better and clearer understanding of range and types of conflicts of interest members face – and why • Better and clearer understanding of how members deal with such issues and how the ICAEW can help • Being able to identify the above by different member segments • Members • ‘The case studies are the most popular section of Ethics in Context’ (ICAEW); • 85% users rate page as ‘Very Helpful’ or ‘Some Help’ • 5228 page views of Ethics in Context over 1 year period ‘In terms of user feedback, they’ve been a huge success’

47. CONCLUSIONS • Ethical dilemmas are an inherent part of professional life – and can have a detrimental effect on staff morale and productivity • In a culture of heightened tension, scandal and brand awareness, tackling the issue becomes all the more advisable • The issue is a sensitive and complex one, with staff responses to conflicts varying according to many different factors • There are a number of things which fuel these conflicts as well as a number of things which can help alleviate them • A careful and traditional research process can successfully uncover these elements and guide an organisation when dealing with this issue