Dialogue with APEX - Executive Summary

Report on a Dialogue with APEX Members about
Systemic Issues that May Lead to Wrongdoing in the Federal Public Sector

Held at the Canada School of Public Service
October 27, 2009

Prepared for:
The Office of the Public Sector Integrity Commissioner of Canada

Participants

• APEX Members: 19 participants from all EX levels

Staff:

• Francine St-Pierre and Deborah Tiwari – Office of the Public Sector Integrity Commissioner
• Facilitators Tony Dean and Daniel Normandeau (assisting)
• Marc Sanderson – Canada School for Public Service (CSPS)

Introduction to Forum:

• James Meddings - CSPS
• Karen Hecks - APEX
• Christiane Ouimet, the Public Sector Integrity Commissioner of Canada

Introduction:

This consultation was arranged by the Commissioner for discussion with federal public service leaders on systemic issues across the public service that may give rise to integrity issues. The consultations are also intended to gather advice on promoting a culture in which public servants can more easily identify potential wrongdoing and talk openly about their concerns and issues. This advice will inform both the work of the Office and the preparation of the Commissioner’s 2009-2010 Annual Report. Discussion focused on two central questions: Can we identify systemic conditions or risks that contribute to creating an environment where wrongdoing could occur? and; Where such risks can be identified, what approaches and actions might ameliorate these conditions and risks?

An Executive Summary, with conclusions and recommendations follows.  A detailed report on the consultation is attached as Appendix 1.

Executive Summary

The discussion with Executives was comprehensive and thoughtful, resulting in rich ideas and advice. The following key themes emerged:

Systemic conditions or risks that contribute to creating an environment where wrongdoing could occur:

• Insufficient Definition and Clarity in Setting Expectations: There is considerable uncertainty about what “wrongdoing” means, especially where it enters the relatively undefined area of “integrity”. More emphasis should be placed on clarifying these concepts and related processes, providing specific examples, and getting the message out to managers and staff.
  
  
• Leadership: There is a strong belief in the centrality of visible and active leadership, modern human resources practices and corporate culture in promoting right-doing and preventing wrongdoing. A number of systematic challenges were identified, including the impact of rapid turnover of senior leaders and the loss of “organizational wisdom”; in some circumstances, managers do not have sufficient confidence that their efforts to tackle wrongdoing will be supported at more senior levels; and, responses to wrongdoing often involve further tightening of a  “web of rules”, but do little to address the underlying issues and risks.
  
  
• Insufficient Focus on Values and Ethics: Organization values and ethics are frequently mentioned but not visibly demonstrated and modeled at senior departmental and organizational levels. A number of specific concerns and risks were identified including insufficient transparency and communication when senior managers investigate and invoke disciplinary measures in cases of wrongdoing (understanding that privacy must be protected). Similarly, there should be more positively-reinforcing communication of exemplary conduct.
  
  
• Systemic Challenges in Managing Performance: Participants emphasized the relationship between sound and consistent human resources practices and a culture which discourages wrongdoing and promotes right-doing. There is a strong, professionally motivated, concern that managers are not sufficiently trained, equipped or supported to assess and manage performance. In addition, performance agreements are often insufficiently focused and priority-driven and lacking in direct accountability for outcomes. A number of specific risks were identified.

What approaches and actions might ameliorate these conditions and risks?

• Highlighting and Learning from Best Practices: Participants noted that this is not a cold start for the federal public service. The recent focus on public service renewal and modern human resource practices provides a timely platform to elevate the relationship between good leadership and organizational and personal integrity. While there is unevenness in the organization, there are also successful examples of sound and effective practices which should be identified and highlighted (e.g. at Public Works; and in building on existing communities of practice such as the Interdepartmental Values and Ethics Network).
  
  
• The Centrality of Leadership in Establishing a Stronger Culture of Integrity:  There is strong consensus that preventing wrongdoing and promoting disclosure starts with consistent leadership and modeled behaviour at the top of the organization. This involves creating an environment in which expectations are clear, making staff comfortable in raising and addressing potential integrity issues. Managers must be seen to address significant risks, but also tackle small indiscretions that can otherwise result in ambiguity about an identifiable line between wrongdoing and right-doing. The small stuff matters.
  
  
• A Renewed Focus on Values and Ethics – With Strong Leadership from the Centre of Government: Strong central government focus and leadership in promoting integrity and raising organizational and individual comfort with disclosure was emphasized. This included the need for a visible and accessible central office with a strong mandate and the capacity needed to drive sustainable change; placing priority on the completion and distribution of the new Values and Ethics Code; and a focus on promoting and highlighting “right-doing” (as well as a focus on preventing wrongdoing).

Conclusions and Recommendations

The APEX consultation revealed a strong belief in the centrality of visible and active leadership, modern human resources practices and corporate culture in promoting right-doing and preventing wrongdoing. Participants noted the importance of ensuring that the fundamental drivers of high-performing, values-based organizations are promoted and developed. This includes clarity and simplicity in the expectations and rules governing desired behaviors and practices, reinforced by modeled ethical leadership and a consistent and honest approach to the assessment of performance.

There was an emphasis on the importance of tackling the “small stuff”. Public servants are often expected to deliver under pressure, with tight resources and may sometimes cut corners or operate in a “grey area” in order to get the job done. This is sometimes tolerated, condoned or even incented. Systemically, however, this can create considerable risk: small indiscretions often evolve into larger ones which become more difficult to manage; a culture of tolerance for small indiscretions can develop in which there is no clear sense of the line between right and wrong; and this makes rigorous, consistent and honest performance assessments all the more difficult. 

The federal public service has very strong foundations to build on, including the current leadership focus on public service renewal, the Management Accountability Framework, existing best practices within the organization and a number of employee surveys.

The following recommendations arose from the discussions:

1. The current emphasis on public service and HR renewal offers an important platform to highlight and reinforce expectations, rules and processes associated with building a culture of integrity, and in raising comfort in identifying and dealing with wrongdoing. A strategy, action plan and performance indicators should be set in place to ensure that this occurs;
   
2. Orientation, training and leadership development programs should emphasize and reflect the critical role of visible and active leadership and coaching in promoting right-doing and preventing wrongdoing;
   
3. Ethics and values training should be renewed and intensified;
   
4. Performance contracts should give greater priority to integrity initiatives and outcomes, with clear individual accountability for results;
   
5. Greater use of 360 degree evaluations would help to assess the performance of managers and leaders in establishing and maintaining a culture of integrity;
   
6. Leaders and managers should receive additional support in developing the necessary skills for managing performance consistently and honestly, with a specific module focusing on integrity and wrongdoing;
   
7. Consideration should be given to making ethics and integrity a more stringent component of the Management Accountability Framework;
   
8. Priority should be placed on finalizing and communicating the new values and Ethics Code;
   
9. The capacity of central offices with responsibility for promoting integrity should be reviewed and strengthened where necessary;
   
10. Efforts should be made corporately, and at department and agency levels, to define and communicate the various elements of wrongdoing clearly and simply, providing specific examples wherever possible. A corporate “all of government” approach is needed, with consistent and reinforcing departmental rollouts. This should reflect the importance of identifying and tackling smaller incidents of “rule-bending” before these become larger or systemic;
    
11. Clarity is also required in relation to the processes for internal and external disclosure of wrongdoing, with straightforward advice on how, and where, perceived wrongdoing should be reported. There is a need for greater recognition of the pressures faced by potential disclosers and for clear communications about protection from reprisals;
    
12. There should be greater transparency and reporting of actions taken to respond to wrongdoing and to exemplary examples of “right-doing”;
    
13. There should be an examination of the feasibility of establishing baseline indicators of the level of understanding of organizational values and integrity, against which progress can be measured. Pre-existing tools and surveys should be adapted for this purpose, where possible;
    
14. Best practices and successful integrity initiatives in the federal public service and other organizations should be identified, highlighted and shared.  Communities of practice such as the Interdepartmental Values and Ethics Network can play an important role in doing this, and they should therefore be enabled and supported.

Tony Dean
Mapleview Consulting
November 23, 2009
 

Appendix 1

Detailed Report on APEX Consultation – October 27, 2009

Introduction

The proceedings began with a formal welcome and introductory remarks from Christiane Ouimet, the Public Sector Integrity Commissioner of Canada. Madame Ouimet emphasized that prevention is at the heart of her Office’s approach to delivering on its mandate, and is foundational in our collective efforts to build trust in our public institutions. She noted that the prevention of wrongdoing is a shared responsibility throughout the federal public sector and that Executives are important partners in both promoting integrity and in preventing wrongdoing.

The Commissioner noted that her Annual Report, which is submitted to both Houses of Parliament, is required to set out any systemic problems that may give rise to wrongdoing. Her last Annual Report examined systemic vulnerabilities of small federal organizations and of Crown Corporations. The October 27 meeting was the commencement of a consultative process with the Executive community for discussion and identification of systemic issues across the public service that may give rise to integrity issues. The consultations are also intended to gather advice on promoting a culture in which public servants can more easily identify potential wrongdoing and talk openly about their concerns and issues. Madame Ouimet noted that a similar process with federal union representatives is also being organized. She added that there would be a report on these consultations at her Office’s 2010 Symposium in Ottawa, and in her next Annual Report.

Summary of Discussions

The discussion was organized around six questions which had been provided in advance. There was extensive dialogue on all of the areas raised by the questions.  For purposes of reporting on the content of discussions we have arranged ideas and responses under the headings of each of the first two substantive questions – Can we identify systemic conditions or risks that contribute to creating an environment where wrongdoing could occur? and; Where such risks can be identified, what approaches and actions might ameliorate these conditions and risks?

Significant themes emerging from the discussions included:

• A strong belief in the centrality of visible and active leadership, modern human resources practices and corporate culture in promoting right-doing and preventing wrongdoing. 
  
  
• Ensuring that the fundamentals drivers of high-performing, values-based organizations are promoted and developed. This includes clarity and simplicity in expectations and rules governing desired behaviors and practices, reinforced by modeled ethical leadership and a consistent and honest approach to performance assessment.
  
  
• The importance of tackling the “small stuff”. Public servants are often expected to deliver under pressure, with tight resources and will sometimes cut corners or operate in a “grey area” in order to get the job done. This is sometimes tolerated, condoned or even incented. In some exceptional cases, such as dealing with crises, and in the context of a thoughtful risk assessment, it might be considered the right thing to do. Systemically however, this can create considerable risk: small indiscretions often evolve into larger ones which become more difficult to manage; a culture of tolerance for small indiscretions can develop in which there is no clear sense of the line between right and wrong; and this makes rigorous, consistent and honest performance assessments all the more difficult. Additionally, this has critical implications for the promotion of a culture in which there is comfort in disclosing wrongdoing. One participant noted that a culture of tolerance for small indiscretions, including in leadership behavior, will not only cloud a collective understanding of right and wrong, but also creates a strong disincentive to disclosure. It is also likely to reinforce concerns about reprisals.
  
  
• The federal public service has very strong foundations to build on, including the current leadership focus on public service renewal, the Management Accountability Framework, existing best practices within the organization and a number of employee surveys.

1. Can we identify systemic conditions or risks that contribute to creating an environment where wrongdoing could occur?

Insufficient Definition and Clarity in Setting Expectations

It was reported that there is widespread uncertainty about what “wrongdoing” means, especially where it enters the relatively undefined area of “integrity”. For this reason, it is important to define and communicate the various elements of wrongdoing clearly and simply, providing specific examples wherever possible. There is a concern, for example, that, in a risk-averse culture, honest mistakes made in the process of getting work done could be perceived as wrongdoing.

Clarity is also required in relation to the processes for internal and external disclosure of wrongdoing, with straightforward advice on how, and where, perceived wrongdoing should be reported. There is a need for greater recognition of the pressures faced by potential disclosers and for clear communications about protection from reprisals.

It was also suggested that, in view of the importance of organizational culture and values in promoting integrity, there should be some baseline measurement of indicators of “cultural health” and the level of understanding of organizational values, against which progress can be measured.

Leadership Issues

Frequent turnover of senior leaders, especially at the DM/CEO/President levels, was cited as a systemic challenge, making it difficult to set in place and model an appropriate tone at the top of the organization. When leaders are not in place long enough to establish and sustain clear values and expectations, and to model ethical leadership, there is an understandable perception that this is absent at the top of the organization. This degree of turnover gives rise to concerns about “declining organizational wisdom”, which can include loss of capacity for sound and risk-based judgement in providing advice on ambiguous or “grey” areas of ethics and integrity.

The quality of leadership was frequently identified as a systemic risk factor. Participants suggested that:

• Poor leadership derails management efforts to demonstrate and integrate values and ethics into work and organizational culture.
  
  
• There is unevenness at the leadership level in demonstrating strong and visible commitment to values and ethics, even where this is a feature of performance agreements. This gives rises to cynicism within the middle and lower ranks of the organization.
  
  
• When someone ‘knowingly crosses the line’, EXs do not always have sufficient confidence that their assessment of appropriate consequences will be supported at more senior levels.
  
  
• There is also knowledge of senior officials “bending the rules” and being perceived as being rewarded for this, which sends a contradictory message in the organization.
  
  
• In other cases, the response to wrongdoing is the implementation of an ‘iron triangle’ web of rules that connotes quick and determined action, but does not address the underlying issues. In these cases, existing rules and processes often appear to be adequate and yet are tightened and made more restrictive, when the real issue is one of education and compliance.
  
  
• There is perceived to be a role for the deputy minister cadre in providing advice and offering alternatives to the evolving “web of rules” response to breaches of integrity. There is a strong and consistent view that this form of response deepens a culture of risk aversion at the same time that public servants are being asked to demonstrate innovation. This challenge is frequently raised at senior management meetings and conferences dealing with public sector management and leadership.

Insufficient Focus on Values and Ethics

Participants voiced concern that organization values and ethics are frequently mentioned but not visibly demonstrated and modeled at senior departmental and organizational levels. The following specific concerns and risks were identified:

• There is insufficient transparency and communication when senior managers investigate and invoke disciplinary measures in cases of wrongdoing (understanding that privacy must be protected). Similarly, there should be more positively reinforcing communication of exemplary conduct.
  
  
• There should be greater specificity of what is meant by ethical behaviour in order to assist in measuring performance at all organizational levels.
  
  
• Concerns were raised about the perceived decentralization or devolution of the responsibilities of Treasury Board’s Ethics Office, with a view that there should be a strong central ethics function. There is also a concern that the current Office is not sufficiently visible or easily accessible, which, in itself, sends a contradictory message to employees and management.
  
  
• The delay in issuing a new Values and Ethics Code may suggest that this initiative is not a priority.
  
  
• There is a perceived inconsistency of policy and messaging on values and ethics across departments. A corporate “all of government” approach is needed, with consistent and reinforcing departmental rollouts.
  
  
• There is confusion and inconsistency in the locus of responsibility for values and ethics in departments (for example, some are embedded in compliance functions, while others are not).
  
  
• There are a sufficient number of surveys to determine management and employee views on organizational issues but there is not enough evidence of follow-up and actions taken in response to these surveys.

Systemic Challenges in Managing Performance

The relationship between sound and consistent human resources practices and a culture which discourages wrongdoing and promotes right-doing resonated throughout the consultation. A common concern is that managers are not sufficiently trained, equipped or supported in assessing and managing performance. There is also a sense that performance agreements are often a compendium of activities, with insufficient focus on priorities, and lacking in direct accountability for outcomes (this appears to be a concern that extends beyond the current focus of study). The following concerns highlighted particular areas of risk in this area:

• There is unevenness in management willingness and capacity to communicate honestly with poor performers and hence to provide opportunities for corrective action and improvement; this in turn sends a poor message to those who work hard and consistently perform well.
  
  
• Some view managers’ unwillingness to engage in difficult performance discussions as stemming from fear of informal harassment or formal complaints processes (as described in a recent APEX survey report).
  
  
• Rather than shining a light on poor or unethical behaviour, there is a view that such behaviour can result in staff being shuffled to other positions (“soft landings”). This is perceived as not only tolerating poor performance, but in some cases rewarding it.
  
  
• There is a tendency to substitute “process” for “progress” in performance agreements.
  
  
• Problems can arise when performance drivers incent behaviour which is contrary to ethical expectations (the Sponsorship issue was cited as an example).
  
  
• Issues may arise where private sector leaders are imported and bring values and practices which might collide with pubic sector values (e.g. hiring or contracting practices that contravene rules).

Additional Concerns Regarding Disclosure:

• There is a need for honesty and consistency in communications with potential disclosers. This should include informing potential disclosers of the degree of anticipated confidentiality and on the possible impact of disclosure on the individual’s career and well-being.

2. What approaches and actions might address these systemic conditions and risks?

Highlighting and Learning from Best Practices

This is not a cold start for the federal public service. There is unevenness in the organization but also successful examples of sound and effective practices.

• Recent approaches employed at Public Works, including the development of a corporate risk profile, and continuous education and reinforcement of expectations for ethical practices, are cited as one example of close-to-home best practices.
  
  
• It is important to build on existing communities of practice (such as the Interdepartmental Values and Ethics Network) and to identify, promote and extend other best practices, from outside and within the public service, across departments and regions.
  
  
• The recent focus on public service renewal and modern human resource practices provides a timely platform to elevate the relationship between good leadership, and organizational and personal integrity – it is important to examine best practices in this area.

The Centrality of Leadership in Establishing a Culture Shift

There is strong consensus that preventing wrongdoing and promoting disclosure starts with consistent leadership and modeled behaviour at the top of the organization, and its departments; and, further, that leadership behaviour goes beyond influencing culture – it actually drives it. Key factors include:

• A proactive approach by leaders in defining and clarifying expectations for ethical behaviour which is then reinforced by personal leadership practices (“walking the talk”). This means clearly communicating behavioural expectations to managers and employees: “this is the behaviour I expect in my organization as we lead employees and serve the government and the public, and here is how you will be held to account”. This requires visible follow-up with both appropriate rewards and consequences.
  
  
• Responding to ethical issues and conditions that can lead to wrongdoing by addressing both significant risks, but also “small” indiscretions that can result in ambiguity about an identifiable line between wrongdoing and right-doing. Small issues tend to evolve into larger ones over time, have a greater impact, and become more difficult to address. If employees see managers and leaders ignoring the small things, there are unlikely to feel comfortable in bringing issues of any magnitude to management’s attention, and may become passive participants in creating a culture that is contrary to public service values and ethics.
  
  
• Creating an environment in which staff are comfortable in talking about smaller ethical issues will lay the groundwork for comfort in tackling larger issues (this is also transferable to comfort in addressing performance issues).
  
  
• Ethics should become a stringent component of the Management Accountability Framework.
  
  
• 360-degree evaluations would help to assess the performance of managers and leaders in establishing and maintaining a culture of integrity.

Moving to a Stronger Culture of Integrity

Culture change is seen as critical in shifting thinking and behaviour. One participant noted that “Ethics and Values are what we do when no one is watching….Culture is what we do because everybody is watching.”  The following points emerged from discussion:

• The recent leadership focus on public service renewal offers a timely and important opportunity to elevate the relationship between good leadership and a culture of integrity. This should be recognized and incorporated in public service renewal initiatives.
  
  
• Ethics must be a measurable component of performance assessment and management.
  
  
• This is about promoting and building a culture of “right doing” through a renewal of desired values and ethics, with a particular focus on training and continual reinforcement.
  
  
• Support and clarity is required in understanding and identifying scale, magnitude and thresholds in unethical behaviour. 360-degree evaluation is a useful tool and should be mandatory for all EXs, including the top ranks of the organization.  This is a useful tool for public servants at all levels, and would contribute to reinforcing an ethical culture by affirming behaviours and actions that align with public service values and ethics. It would also raise individual awareness of unacceptable behaviours that are not aligned. (“The people best positioned to assess leadership behaviour and whether this is promoting a desired culture are the people that you work with – colleagues especially – and the people who work for you”). These assessments would help in preventing “derailment” behaviours present in some areas of the public service leadership ranks.

A Renewed Focus on Values and Ethics – With Strong Leadership from the Centre of Government

The consultations emphasized the necessity of strong central government focus and leadership in promoting integrity and raising organizational and individual comfort with disclosure. Comments on this included:

• The need for a visible and accessible central office with a strong mandate and the capacity needed to drive sustainable change.
  
  
• There is a need to review and communicate the organization’s core ethical values and desired behaviours, using scenarios that provide concrete examples along the spectrum of wrongdoing.
  
  
• Staff, managers and leaders must be provided with support, tools and resources as they work to re-frame expectations, culture and outcomes.
  
  
• It is advisable to test and confirm that the values and ethics of employment candidates are consistent with those of the public service (or are capable of adjustment) at the point of hiring. (“As we ensure that the candidate has the required expertise for the job, we should also assess the degree to which their values are consistent with the public service culture”).
  
  
• Ethics and values training should be renewed and intensified.
  
  
• The completion and distribution of the new Values and Ethics Code should be a leadership priority.
  
  
• There should be a determined focus on promoting and highlighting “right-doing” (as well as a focus on preventing wrongdoing). This should be considered in the context of branding and communicating government efforts in this area.