By Melissa J. Anderson

Recently GlaxoSmithKline released its annual corporate responsibility report, which discusses the firms efforts regarding, among other things, ethical standards in sales and marketing.

The pharmaceuticals industry has long raised ethical concerns regarding its sales force, the patenting of life-saving drugs, cost structuring, etc. But what is refreshing is that GSK thought it fit to address the issues head on in its report.

On page 7 of the over-250 page report, Chief Executive Officer Andrew Witty writes:

“We are continuing to work towards resolving a number of long-standing legal matters. In light of these cases we have fundamentally changed our procedures for compliance, marketing and selling in the US. We now have far-reaching policies and procedures in place to guard against inappropriate promotion to healthcare professionals, and to seek to ensure that if breaches of regulations do occur they are reported to the US government.”

For example, he says, the company is changing the way its sales force is compensated – rather than purely based on prescription volume, they will be rewarded on a number of factors: “scientific and business knowledge, feedback from customers in their region, and the overall performance of their business unit.”

Shifting Values

According to Witty, this is all part of shifting the values of the organization – and GSK’s approach shows that it believes the business case for adjusting corporate culture. He writes, “To truly embed our values we need to be willing to change how we work, to invest resources and to demonstrate leadership. “

The report explains further that the company is, in fact, being driven by a profit motive here – changing the culture of its workforce is a response to shifting stakeholder values about the purpose of the company and its mission. It says:

“Today, stakeholders expect business to play a greater role in tackling the world’s social and environmental challenges and to meet ever-higher standards of ethical conduct. …Reflecting this, and in support of our strategy, the culture of our company is evolving to understand and be more responsive to stakeholder needs and more open and transparent about the way we operate. This will help us to build trust in our company and to create products of real value for patients and healthcare payers.”

Currently, the report explains, company’s ethics revolve mainly around its compliance system. The report says:

“Our internal compliance systems are designed to identify and address breaches of our codes and reinforce GSK’s values. There is continual external pressure to enhance these systems and our compliance oversight and audits are helping to drive this change.”

Moving Beyond Compliance Based Systems of Change

As we’ve reported in the past, a compliance-based system of enforcement is not the solution to building real cultural change. It requires strong support from the top for a human-focused attitudinal change management.

But the company has also implemented an “ethical compass,” a set of questions employees should ask themselves about their activities. A few of the questions include “Can I explain it to my family and friends?” and “Would I be comfortable if it appeared in a newspaper?”

Bringing ethical considerations down to the level of the individual is an effective tactic in building a culture of accountability. In fact, GSK includes, within its CR report a lengthy section on its employee code of conduct (including areas like bribery, corruption, and privacy) which employees are expected to uphold.