ST. LOUIS—Fleishman-Hillard chairman John Graham has told the firm’s employees of several new ethics measures, including a hotline for employees to bring concerns to the attention of the human resources department anonymously, and a moratorium on corporate contributions to political campaigns or ballot initiatives.
The moves come as F-H faces fraud charges in Los Angeles, arising from alleged over-billing of the city’s Department of Water & Power. The probe into Fleishman’s work for DWP began after it was suggested that there might be a link between firm’s contributions to Mayor James Hahn and its pro bono work on his campaigns and the awarding of the $3 million a year contract. And it came to a boil two weeks ago, after several former employees of F-H told the Los Angeles Times they had been encouraged to submit falsified timesheets.
The firm has launched its own investigation, using independent legal counsel, and says it is cooperating with investigating authorities in L.A. It insists that any wrongdoing was not condoned by the agency’s leadership and runs counter to its culture.
In an e-mail to staff, Graham said: “For nearly six decades, one of the cornerstones of our corporate philosophy has been our commitment to the highest ethical standards. That is why the recent allegations of billing irregularities in our Los Angeles office are so disturbing; they run counter to everything this agency has stood for in 58 years….
“Once all the facts are known, we will move swiftly to address any shortcomings. In addition, if the results of our investigation uncover any improper billings, we will reimburse clients.”
He also outlined several changes at the firm, designed to guard against any future lapses. A new time entry and billing certification process has been introduced, and every staff member must now certify that he or she has reviewed and understands the firm’s time entry policy, and that the time being entered is an accurate account of time worked. In addition, managers who are responsible for approving invoices must sign a statement certifying that they understand the firm’s billing policy, and that all time being charged to a client is accurate.
Regional presidents will be meeting with their general managers to conduct staff meetings over the next two weeks, reinforcing the firm’s commitment to operating with the highest standards of client service, integrity, and business conduct and to underscoring the fact that the firm’s leadership would never condone any misrepresentation of client billing.
Graham says he will meet with California staff in person.
In addition, to address the “increasingly sophisticated compliance requirements of our public service accounts,” all employees working on local or state government contracts will complete the same training process the firm uses for employees working on federal contracts. The enhanced training, conducted by contract managers working in Washington, D.C., and by outside experts, is designed to ensure that every team member working on a public service client is fully aware of the key operating provisions and expectations of relevant client contracts.
The firm is also enhancing its ethics program. “I understand and appreciate that we are an organization of highly ethical individuals,” says Graham. “However, when our ethics are called into question, even in just one isolated area, it is appropriate to take steps to ensure we have the benefit of the best and freshest thinking.”
For that reason, the firm has engaged an independent ethics expert to assess the ethical commitment of the firm. This individual, who is “on the faculty of a major U.S. university and is an active ethics leader in the United States and Europe,” has finished the first phase of his review and will work with a subcommittee of the firm to put in place a curriculum of case-based ethics training for all staff.
Within the next 10 days, the firm says it will announce a hotline giving not only employees but also clients and suppliers the ability to anonymously report any questionable or unethical behavior 24-hours a day, seven days a week. “Every call to the hotline will result in a notification to me; Agnes Gioconda, our chief talent officer; and the appropriate regional president,” says Graham.
In addition, exit interviews will be conducted by “talent development liaisons” in St. Louis and will be reviewed by Gioconda and the appropriate regional president.
Finally, the firm has revised its policies on political contributions to eliminate all contributions of corporate funds to candidates or ballot issues. “In addition, we now require a three-part approval process at the local, regional, and corporate levels for any solicitation of political contributions from employees on FH premises, or on FH time, or using our name,” says Graham.
While some industry leaders expressed surprise that F-H did not have some of these processes in place—particularly an ethics hotline, which is reportedly standard at Interpublic Group agencies—others said they were looking at the steps the firm was taking and considering duplicating some of them. “Anyone who isn’t thinking, ‘There but for the grace of god,’ isn’t taking this issue seriously enough,” says the CEO of one top 10 PR firm.