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Markkula Center for Applied Ethics

A Discussion with Seagate's Lead Independent Director

Culture Self-Assessment Practice

A Discussion with Seagate's Lead Independent Director

Seagate Technology became a pilot participant in ethical culture assessment in 2014.

The following is an edited transcript of a conversation between Ann Skeet, Senior Director of Leadership Ethics, and C.S. Park, Seagate’s lead independent director at the time, about the key learnings from Seagate’s ethical culture assessment, as well as the strong potential for ethical culture assessments to help companies across Silicon Valley.

Tell us about how Seagate decided to do an ethical culture assessment.

I was lead independent director back then, and I chatted with the CEO about what the Markkula Center was doing…I was aware of some of the things the Center was doing that could help the board understand culture and ethics because I serve on the Center’s advisory board. The Seagate board did not have a specific understanding of culture and ethics – unless there was an incident.

I talked to [former executive director of the Markkula Center] Kirk Hanson, and began to socialize the idea to consider what insights we could gain. That’s how it started – it was a very casual start. This was a pilot project, with no known developed tools at that point. The Center developed it as we progressed.

Now, if someone said “start a culture assessment,” people would say this would have to do with #MeToo. But this was 5 years ago.

This had nothing to do with #MeToo. We at Seagate just felt that the board should have some insight.

Every organization should have something like this. Around that time, it was typical for boardrooms to have an annual discussion of either conflict of interest, or other ethics-related issues, so this was not uncommon, but it was treated as a much more routine process without direct inputs. I think the Ethics Center allowed us to gain some direct inputs, not only domestically but also internationally. The process was quite interactive.

What lessons did you learn from the culture assessment?

As I recall, there were different views held by different parts of the organization – particularly as a company that is quite global and diverse in backgrounds. The standard of ethical values is very different in Asia, compared to Europe, compared to here. I think it was eye-opening, and led us to ask: how can we tailor specifically to help upgrade some of the thinking in that area? Particularly in our China operations, we had several interesting episodes. These episodes are not necessarily considered unethical by Chinese standards, but it was clearly something distinct from our US point of view that we should address. We always think we are one company with world-wide standards, but clearly there is variation depending on each region (particularly in procurement practices). The ethical culture assessment gave us a way to talk across regional differences.

Say a little more about company values that you try to apply across locales. What are some examples of these values that the ethical culture assessment helped bring into focus?

Quality, customer advocacy, and customer satisfaction are important values across companies I’ve been involved in. For quality, there is no compromise. In our world, let’s think about it – when you have a new product and testing, there is an outlier. Some engineers will, with a little pushback, say it is too extreme an outlier and so it should be disregarded. But that outlier will crop up somewhere – like extreme temperature. We cannot ignore it, and we have to address it. Again, I have seen situations where people are compromising some of those values. Quality is not just quality – it is a real value system with long-term impact on organizations. Quality, customer advocacy, and customer satisfaction were the most impactful from the company culture standpoint.

Was it significant that the ethical culture assessment was initiated by the board?

In the eyes of the participants, everyone knew the ethical culture assessment was initiated by the board, and not necessarily by management. I think that set a positive tone of “Wow, our board is interested.” This had a huge tangible and intangible impact for them to see the “board is concerned” or the “board is interested.” I think that is big.

From a management perspective, we didn’t do this because of a particular problem. That helped. If you wait until there is a problem and then the board takes on that kind of thing, there will be defensiveness from management. But since there was no trigger and this was in a peaceful time, that helped. Doing a culture assessment when there is no crisis helps.

If another company were considering an ethical culture assessment, what would you say to appeal to a board member?

Number one, it sent a very strong signaling message of our value and our interest…We always tend to focus on revenue or some other metrics, but an ethical culture is something that also should have certain metrics.

How would you respond to the objection that an ethical culture assessment is a waste of time for a board?

Typically, the board is concerned about strategy as well as operations, but should be prepared to deal with real incidents: ultimately the board is responsible…it all comes to the board. It is not wasting their time – it is actually time well-spent. It is very critical for the board leadership to understand this and try to put it on the agenda.

All agenda items are competing for time and attention at a board meeting. But if the lead director and the committee chairs are aligned, then an ethical culture assessment can make it to the top of the agenda.

After the board assessment and review, this is something that management should take the lead on.

In the end, even if the ethical culture assessment is initiated by the board, management should be much more integrated into acting on the findings.

Do you think it makes a difference if the CEO initiates or the board initiates the ethical culture assessment?

In this case, the CEO was also the Board Chair, so he was really behind this and that helped. I think the CEO should be engaged, as the person responsible for follow-up considerations.

Board members generally only meet quarterly, while the committee chairs are more frequently engaged.  With that in mind, I believe the CEO and committee chairs are very critical in terms of engaging and following up.

What did you find the most revealing about the ethical culture assessment findings, if anything?

Ethical culture alignment should start from the HR process when they hire new employees.

Normally, they check the references and what schools they came from and what experiences they had, but rarely focus on the ethical aspects of the person. In the assessment findings, this was commented on – there was clearly a section reporting that HR rarely questioned or investigated the ethical aspects of job candidates.

I always took it for granted that HR is concerned about the ethical aspects of candidacy. But it turns out that HR does not always do so.

We raised this, and made a point to the management, that ethics should be incorporated from the hiring process onward. That was one of our recommendations after the cultural assessment.

What do you think CEOs need to know in terms of ethics?

They need to be educated, and newer CEOs may need to ask the question, “What do I need to know in terms of ethics?”

It’s mind-boggling that many global companies in Silicon Valley with such global products and services are so primitive in terms of understanding ethical issues.

May 21, 2019

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