COVID-19 has stripped offices everywhere of employees and disrupted and transformed workplace culture. Fiona Smith investigates if office conduct has suffered a COVID fall-out.

41% of Australians with a job work from home at least once a week
16% of people working remotely say they struggling with loneliness
14% of global employees say they work for an organisation with a strong ethical culture
77% of people say that being able to work from home post-COVID-19 would make them happier

(2021 data from ABS, Buffer State of Remote Work survey, Ethics and Compliance Initiative, and Owl Labs)

The survey finding subverts the idea that executive teams are in favour of employees returning to the office over any other workplace model. Seventy-seven per cent of respondents hold senior roles from managerial to board director positions and only 14 per cent can be considered to be ‘workers’.

At stake is more than just the use of real estate – it’s how organisations can continue to provide a satisfying workplace for their employees and how they can lay the foundation for future success. Many believe workplace culture – the neurodiversity effect of being among many of different abilities and opinions – is an essential driving force that creates new initiatives, gives projects their impetus and is the petri dish of business ideas. Others say new management techniques are needed to respond to a pandemic generational change.

New management techniques are needed to respond to a pandemic generational change.

Business leaders are coming to terms with the fact that a sizeable proportion of their workforces now comprise ‘COVID hires’ – people recruited in the past 18 months who haven’t set foot in the office.

Consultancy firm and The Ethics Alliance member Accenture is a case in point. The firm replenishes its ranks by hiring 100,000 people worldwide every year, a number that amounts to almost 20 per cent of its total workforce. That’s a lot of people to integrate into a workplace culture over 12 months – especially when done remotely and in a time of crisis.

Each new hire is screened for their ‘cultural fit’ and receives an induction into Accenture’s workplace systems, as well as its code of conduct.

This onboarding process gets staff ready to work and aims to ensure that they undertake their work at Accenture in the right way. When workplace culture is designed around contact, how can it be maintained when 20 per cent of the workplace have never been face-to-face with their new colleagues? And does it matter?

The office as ‘honeypot’

Domino Risch, workplace designer and Principal at design studio Hassell, says it’s possible to create a cohesive workplace even while adopting a hybrid work-from-home/work-from-office model. She says an appealing workplace can renew workplace culture on those days that employees are back in the office.

Risch says workplaces need to become more like ‘collective clubhouses’ if they are to create the sense of belonging that humans have developed over millions of years as social, group-based creatures who almost always work better together than alone.

Aside from creating workplaces that have been designed with human wellbeing in mind – that cater to our biophilia (our tendency to seek connections with nature and other forms of life) and our need for sensory diversity – they also need to deal in intangibles that create a more human-centric environment.

“What we’ve all missed from working from home is not our office or desk chair,” says Risch. Surveys around the world have found “people have missed people. They’ve missed contact, incidental conversation, debriefs on the way out of a meeting, overheard conversations in corridors and the opportunity to talk to people without it needing to be scheduled or online.”

Surveys around the world have found “people have missed people”.

She says these findings give us a clue as to how workplaces need to shift in terms of their fundamental purpose. Attracting people back into the office means creating spaces for collaboration, co-creation, synchronous thinking and shared storytelling. It’s only the very best design firms that can take a client’s strategic aspiration and intent, and use them to create a humanistic design solution, she adds.

The alternative to the collective idea, says Risch, are “factories of individual productivity”. These are offices that are simply a property and accommodation tool, and which lack all the requisite human aspects of good workplace design.

“Many of the organisations we work for ask us to think about ways to test, experiment, plan for and strategise exactly what the ‘collective clubhouse’ idea means for them,” she says.

“It’s super important to note though, that there is no magic wand. There is no one-size-fits-all solution – every organisation is different, with different values, culture, leadership and capability (and appetite!) for change.”

One thing’s for certain, Risch says, “fifteen months of a pandemic is never going to reverse the desire we have for belonging and contact – if anything it’s stronger now than ever before”.

 

Reflection from John Neil, Director of Innovation, The Ethics Centre

The idea that employees should return to the office represents a watershed – our response to immediate post-COVID challenges will set a course for what the future of work itself will look like.

Leaders can start by embracing the opportunity to reimagine what a creative, adaptable and human-centred working world can look like. They should be mindful of the powerful sunk cost biases and status quo at play. Our formative ways of working during COVID helped to dispel many of these, such as the belief that productivity is tethered to surveillance and control and that trust between employees and their employees can only be maintained when sharing the same four walls.

Culture is a manifestation of the physical environment and human relationships. Regardless of the relative configuration of office versus remote hours, the ability to be adaptive and responsive, to innovate and effectively deliver value, is closely correlated to culture – and particularly to levels of psychological safety.

Leaders therefore can have the biggest immediate impact in responding to their post-COVID challenges by doing three things:

• Be consultative – seek input from their teams on issues that directly affect them
• Be supportive – show empathy and concern for their people as individuals, not simply as employees
• Be challenging – invite their teams to think differently by re-examining assumptions about their work and how they can best fulfil their potential.

 

This article was published as part of Matrix Magazine, an initiative of The Ethics Alliance.

Reflection from Dr Simon Longstaff, Executive Director of The Ethics Centre

Economies are on the brink of changes that will be at least as profound as the Industrial Revolution in their impact on individuals and whole societies. Technological innovation has the capacity to reshape the world of work, finally relieving humans of the drudgery, exposure to danger and the back-breaking labour that has characterised the work of many, for millennia.

However, the promise of a ‘golden age’ casts a long shadow for those who might be displaced by the automated systems and robots that will usher in almost unimaginable prosperity. Indeed, if any force will slow the process of innovation, it will be the political weight of people who fear (rather than embrace) the future.

It follows that every business (and society as a whole) has a vested interest in ensuring that change is carefully managed in a just and orderly manner.

 

This article was published as part of Matrix Magazine, an initiative of The Ethics Alliance.

Two decades ago the scandal surrounding James Hardie switched from the health havoc its products caused to the mishandling of victims’ compensation. In this rare interview with The Ethics Alliance’s Cris Parker, former James Hardie chair Meredith Hellicar reveals how stepping into the firing line left her stronger for the experience.

Corporate scandals can create chaos indiscriminately, far beyond the organisation involved. Lawyers descend, social media accounts are cancelled, computer access denied and journalists start blocking the driveway. Everyone gets hurt. For those who stand accused of transgression, pain is unavoidable. While they try to manage their own crisis, the lives of their families, friends and workmates are also thrown into turmoil.

Meredith Hellicar, former head of James Hardie, is well aware of how unforgiving the Australian public can be. But she still believes it was her duty to step in and help the company she served and the victims of a terrible consequence of its business.

“It has always been inappropriate to speak of the toll this saga took on the personal lives of the board and some executives because of the extent of the horror of dying from mesothelioma,” says Hellicar.

“However, the Hardie people were all humans, too.”

“It has been inappropriate to speak of the toll this saga took on the personal lives of the board and executives … However, the Hardie people were humans, too.”

It’s well documented that ongoing chronic stress can cause or exacerbate many serious health problems. Hellicar says it’s “no coincidence” that one director died of cancer, another had a cancer diagnosis, an investor relations executive suffered a brain aneurysm, an assistant in the office suffered a miscarriage and one of the communications team committed suicide in the two years after the James Hardie scandal became front page news. “But, in the eyes of the public, none of these people deserved anything but derision,” she says.

Lessons learned

Looking back, Hellicar believes there are many lessons – both practical and ethical – from her story for boards and directors in corporate Australia today. Not least that, in a world that demands more corporate governance, keeping up with 1000-page board reports is increasingly impossible. In 2007, the High Court of Australia found the James Hardie board breached its duties by approving the release of a potentially misleading statement to the stock exchange in 2001.

In a world that demands more corporate governance, keeping up with 1000-page board reports is increasingly impossible.

That statement said that the company – which had once dominated the asbestos industry in Australia – had fully funded the foundation responsible for paying compensation to people suffering asbestos-related diseases, such as mesothelioma. It was later found that there was an estimated shortfall in funding of about $1 billion. Justice Ian Gzell of the New South Wales Supreme Court was moved to issue a scathing judgement – and single out Hellicar as “an unsatisfactory witness”.

However, his ruling was controversial. The directors had argued they had not approved the media release. And after appeals in which directors claimed they had been punished enough by the adverse publicity and strong support from prominent Australians, their period of suspension was reduced from five years to two. Talk to many of Australia’s business leaders today and they are quick to voice admiration for Hellicar and respect for the way in which she behaved under fire.

Hellicar had taken the chair of James Hardie from Alan McGregor in August 2004 when his health deteriorated. Hellicar says she wasn’t forced to take on the position of chair, but chose to just before a Royal Commission delivered its report and only weeks before the AGM. As a seasoned director she was well aware this meant she was ultimately responsible for the behaviour of the organisation by being answerable to/accountable for any wrongdoing, regardless of whether or not she was personally culpable and merited condemnation. But she says she felt she was the right person to ensure ongoing support to the victims and reward the shareholders for staying with the company. Australia has the second-highest mesothelioma death rate in the world, with about 700 people dying from it each year. James Hardie’s victims ran a strong media campaign for compensation, fronted by Bernie Banton.

[Hellicar] was well aware … she was ultimately responsible for the behaviour of the organisation … regardless of whether or not she was personally culpable.

At the first opportunity, despite pushback from lawyers, Hellicar apologised to the asbestos victims that the compensation fund had proven to be underfunded. During a judicial inquiry, an investigation and civil action by the Australian Securities and Investments Commission (ASIC), three court cases and a redetermination of penalties over a total of nine years, the seven board members argued they had not approved the statement about compensation funding. Nonetheless, the directors were banned from serving as board members for two years and three months.

Hellicar’s illustrious career had included board positions on AMP, Amalgamated Holdings and the Southern Cross Airport Group. She had also held executive positions such as chief executive of Corrs Chambers Westgarth and managing director of TNT Logistics Asia.

The ban was a shock and the whole process left her “completely destroyed” and “totally reviled”.

Pitfalls for boards

Hellicar speaks of being raised by a father who was a used car salesman and often sacked because he was “obsessed with honesty”. She says honesty is a virtue she herself holds dear. While maintaining that she had tried to do the right thing for people harmed by James Hardie’s asbestos products, Hellicar has accepted the board fell short in its oversight of the executive team.

One of the contributing factors, she says, was “the failure of we directors to fulfil one of the core expectations of company directors; namely, to maintain high-quality peripheral vision and to ask just one more question of management, even in the face of seemingly adequate explanations first time”.

People expect boards to be across absolutely everything occurring in their organisations, but Hellicar says this is an impossible task.

Legal minefields include the assumption of knowledge. If a director has been included on a distribution list of a document, they will have been deemed to have read it, she says.

“Politicians and the media educate society to think that, if you’re the CEO or the board, you have to know everything,” she says. “The moment a CEO says, ‘I didn’t know’, the response comes back: ‘Oh, come on, how could you not know?’”

Before each board meeting, directors receive a board pack of between 200 and 1000 pages that they are expected to read. They may have up to a dozen scheduled meetings each year, extra committee and ad hoc sessions, and serve on several boards.

In an attempt to ensure no stone goes unturned and fully informed decisions are made, corporate governance rules have created an environment that makes it extremely difficult for directors to do their job at the standards expected.

Corporate governance rules have created an environment that makes it extremely difficult for directors to do their job at the standards expected.

Recently at a Governance Institute of Australia function, Philip Chronican, the chairman of National Australia Bank, said: “It’s not enough to turn up to a meeting, review a paper and check that it complies with all the rules and policies … Unless governance has a purpose to it, then it’s just box ticking.”

Hellicar also issued a warning about the tabling of documents at board meetings, “particularly when directors dial into meetings”, she says. “Our US directors on the phone back in 2001 were found by the court at first instance to have approved the release (of the financial state of the compensation fund) because they had not expressly abstained or dissented – even though the court agreed they had not seen it.”

Whether company boards are now ‘fit for purpose’ was the subject of a 2019 paper by Stephen Bainbridge, the William D. Warren Distinguished Professor of Law at UCLA School of Law. “Although directors spend more time on board activities today than they did 50 years ago, they are still ‘part-timers, the vast majority of whom have … employment elsewhere, which commands the bulk of their attention and provides the bulk of their pecuniary and psychic income,” he writes.

Bainbridge argues that directors spend too much time on regulatory and compliance matters, rather than oversight, and suffer a serious ‘information asymmetry’ compared with the full-time executive team.

“Directors … suffer a serious ‘information asymmetry’ compared with the full-time executive team.”

A different standard for women?

Hellicar acknowledges boards have to be held accountable – but she says too often people are demonised when something goes wrong, or a mistake is made. And she feels it is particularly toxic when public shaming leans heavily on questions of sexism.

Catherine Brenner, who was appointed to the board of AMP Life (a subsidiary of AMP), chaired by Hellicar in 2007, stepped down from her role as AMP Chair in 2018. This was in response to issues raised in the 2018 Hayne Royal Commission concerning the preparation of the Clayton Utz report on AMP’s fee for no service issue.

Brenner has been cleared of any personal wrongdoing. However, she was subjected to widespread public criticism regarding her qualifications and much was delivered through a gender lens, describing what she was wearing and questioning her role as a mother.

[Brenner] was subjected to widespread public criticism regarding her qualifications and much was delivered through a gender lens.

Although Brenner stated, “I would not want my experience to prevent others considering a future on listed boards, particularly women, as they bring a very different perspective to men and have much to offer corporate Australia,” the reality is female leadership has stalled.

As of February 2021, 32 per cent of ASX 200 boards are women, but only 10 females hold the CEO roles. Playing an active role in Chief Executive Women (CEW) and the 30% Club, a movement for gender balanced boards, Hellicar feels strongly about the quota merit debate.

“If you have to ask for quotas ‘or’ [make hiring decisions based on] merit then you’re assuming that somehow women are less meritorious than men. There is no evidence at all that women are less intelligent or qualified, none at all!”

Are women subject to more scrutiny and personal abuse when forced to step down from powerful positions? Hellicar says the fact that she was a female in charge intensified reactions.

“I find it ironic that so many of the insults thrown at Julia Gillard – which have, rightly, horrified people – were hurled at me without a word of reproof,” she says. “I received a series of serious death threats, which required security around my home. The media staked out our house from before dawn until after dark, making the trip to school each morning with our daughter both hazardous and stressful for us all.”

Hellicar’s reading of the situation is backed by research, including a study of financial advisors by Mark Egan and colleagues at the Harvard Business School in 2018. Looking at what happens when advisors make mistakes, the researchers found that female financial advisors are 20 per cent more likely to be fired for misconduct than men. They are also 30 per cent less likely to find another job in the industry.

A lack of forgiveness, combined with the vilification of those who knowingly or unwittingly transgress, means that people are under enormous pressure to cover up their errors. The punitive response discourages the sort of transparency that leaders require to deal with risk.

Hellicar says if she had a magic wand, she “would simultaneously inject everyone with this huge dose of kindness and a huge dose of ‘speak up when you see something that you think is wrong’”. She quotes her former James Hardie board colleague, Peter Willcox, who said: “Bad news isn’t like wine. It doesn’t get better with age.”

“Bad news isn’t like wine. It doesn’t get better with age.”

Make a mistake and rebound

Losing her career in the boardroom has had bittersweet consequences for Hellicar. Psychiatry had been a consideration in her university days and realising no ASX-listed company would risk appointing her to the board for fear of persecution, Hellicar reinvented herself by studying a Masters degree in Psychotherapy.

She is now an executive coach (as Australia and New Zealand executive chairman of Merryck & Co.), volunteers as a crisis counsellor with Lifeline once a week and is a mentor for public school students. Hellicar feels you can’t be successful in mentoring roles “unless you’ve got things in your life you’d wish you’d done better”.

Hellicar believes our penal system should be focused on rehabilitation rather than punishment but says that people often (not always) deserve a second chance. She has found strengths of reserve to emerge from the corporate shaming she experienced and is now an active contributor to the ethical education of business leaders and corporate women.

“I have a view that, surely, people are entitled to do something stupid – and they’ll be forgiven. But that’s not how the community thinks anymore. For some reason, we don’t believe people should be allowed to recover from their mistakes,” she says. But “we know people can learn from their mistakes”. The very fact that people have faced a traumatic public failure will sometimes leave them “richer for the experience”.

“Surely, people are entitled to do something stupid – and they’ll be forgiven.”

She adds: “In the US, the more scar tissue you have, the more sought-after you are. Not in Australia.”

“Surely, people are entitled to do something stupid – and they’ll be forgiven.”

 

The Ethical Lens

Cris Parker
Head of The Ethics Alliance

The Ethics Centre Nearly two decades have passed since Meredith Hellicar’s experiences at James Hardie. What can we learn?

1. Respect for person is one of the primary principles in ethics and refers to the consideration and empathy that any human being deserves simply by virtue of being human. It calls on us to respect the intrinsic dignity of anyone. The way we behave towards other people is an expression of our own character and values and so treating people with respect is not motivated by whether they deserve it but rather because doing any less would diminish our own character.

2. Diversity is essential as boards look to navigate the increasing dynamic and complex issues organisations face today – not least to mitigate biases which can either silence voices, such as authority or status quo bias, or which can lead to individuals seeking out like-minded counterparts to corroborate their point of view, such as confirmation bias or group think.

3. Decisions in the board room require stakeholder trade-offs. An organisation possessing a strong ethical foundation developed through a well-defined purpose, values and principles will assist boards as they navigate competing interests and guide decision-making that is just and good.

4. A positive culture in the boardroom is built on transparency and accountability. This means an environment where directors can ask the hard questions, and where executive management are encouraged to share bad news without fear of persecution.

 

This article was published as part of Matrix Magazine, an initiative of The Ethics Alliance.

Most people know the game Monopoly. But few are aware Monopoly was inspired by political economist Henry George’s warning against a dystopic society where land, water and minerals are owned by the dominant few.

To win in Monopoly, first you buy natural resources. Then you monopolise the land. Add some houses and hotels. And finally, force your adversaries into bankruptcy. In the game, it helps to be strategic, but mainly it helps to be lucky. Lucky to arrive first. Lucky to be able to hoover up the best land. In the end, lucky to crowd out the others, making them indigent losers.

Henry George was a brilliant self-taught 19th century American political economist. An advocate for free-trade and an opponent of protectionism, George is however best known for his criticism of the monopolisation of natural resources, arguing this both inhibits economic efficiency and is manifestly unfair. To achieve natural resource equality, George argued natural resources should be taxed at the level it would cost to rent the “unimproved” land. These taxes could be used to abolish other taxes (George’s position was to abolish all taxes except land tax), help fund government expenditure, such as the military, or redistribute in equal proportion to citizens.

Georgism is not an argument for material equality in any meaningful sense. Equal natural resource ownership is consistent with large levels of inequality when it comes to income and the ownership of non-natural assets. A Georgist might argue individuals own 100% of their labour income; that the industrious builder deserves his multiple houses (but not land), cars and boats, and that these are his alone; that the tech entrepreneur deserves her billions but has no right to buy up huge swathes of land. A Georgist position is consistent with minimal state intervention across welfare, education funding and paid parental leave.

The ideas of Henry George have garnered support from various quarters. Economist Joseph Stiglitz has argued Henry George’s proposal could fund the optimal supply of local public goods. Leader of the Chicago School of Economics Milton Friedman said, “in my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago”.

One reason why equal natural resource ownership is preferable is because the alternatives are so underwhelming.

The alternatives of the ideological left, crudely speaking, have disastrous economic consequences. Under collective ownership, government ineptly decides what is produced from natural resources, undermining individual choice and failing to respect citizens. While under common ownership, people use natural resources whenever and however they choose, destroying the environment and economy, as predicted by the tragedy of the commons.

The alternative approaches of the ideological right, again crudely speaking, have their own problems. Primacy is given to first arrivals (though curiously, this line of argument is seldom extended to First Nations people), treating citizens unequally. Like Monopoly, first arrivals win, and second arrivals lose. These arguments typically rest on the ambiguous liberal Lockean proviso that “enough, and as good, left in common for others” or the harsher libertarian Nozickian argument that non-landowners need only pass a subsistence baseline living standard (essentially, non-landowners can eat and have water). But these claims ignore that natural resources are not made by anyone. And if no one has done anything to deserve the unimproved natural resources, and citizens of a country are equal, why are they granted such unequal rights over natural resources, the literal foundation of a country?

To Henry George, every citizen has an equal moral claim to the earth and without this, there is no equality among citizens.

In Australia, we are something of a Hasbro Monopoly ‘Special Edition’. Tech billionaires and their ilk hold some hundreds of millions worth of natural resources, while the mob from Broken Hill have somewhere closer to, and more likely very near, zero. Foreign investors such as Canadian pension funds and the Chinese Government own 14% of Australian agricultural land and 11% of Australian water assets.

Overall, Australian natural resources are worth more than seven trillion dollars (about 85% of which is land, driven by city land values), equating to around $300,000 per person. However, the bottom 20% of Australian households (typically younger folk, most likely regional or outer suburban people) have an average natural resource wealth of under $20,000 (and an average net wealth of around $25,000).

Yet there are reasons to be optimistic. The ACT is 10 years into their 20-year plan to abolish stamp duty and replace this with a land tax, providing instructive “dos” and “do nots” for other jurisdictions. And the NSW Government, with a coalition of support from real estate bodies, accountants, economists and community representative bodies, has proposed a land tax which sensibly considers a gradual introduction of land tax, ensuring fairness for those who have already paid stamp duty, although the proposal insensibly considers making land tax optional.

Overtime, a NSW land tax could be used to reduce other taxes, such as payroll tax, levied by the state government, or income tax, levied by the federal government. Reducing income taxes would reverse the peculiarity of the Australian tax system that we socialise the largely privately created wealth of labour, and privatise the naturally created wealth of natural resources.

Economists boast that a land tax boosts economic productivity, stimulates investment and increases efficiency, all neat reasons for a land tax. But the overwhelming case for an Australian land tax is fairness: that Australian dirt, water, ore and air, are owned by each Australian equally. The overwhelming case for a land tax in Australia is to ensure we don’t become a game of Monopoly.