Shadow Policy: What it is and how it impacts compliance

What are shadow policies?

Shadow policies are unofficial rules or practices made within an organization, which undermine company policy. These shadow policies may be established explicitly (for example, a manager giving direct reports permission to break a rule) or implicitly (for example, when a team forms certain cultural norms, and they may not realize those norms go against company policy). These unofficial and informal practices can have a strong impact on the company and working environment and may lead to compliance issues. Shadow policies can develop because of organizational culture, power dynamics and the desire to avoid certain rules in the workplace.

Key Takeaways

• Shadow policies are practices that go against company policy and are encouraged by a manager or worker who does not have the proper authority to modify the rules

• While often unspoken, they can have detrimental impacts on organizational culture and company proceedings

• They often stem from structural, procedural and cultural factors

• Maintaining an updated code of conduct and establishing clear leadership and a chain of common can help prevent the implementation of shadow policies

The Origins and Causes of Shadows Policies 

Shadow policies typically originate from a combination of structural, procedural and cultural factors. Some cultural factors that lead to shadow policies include the pressure to conform, norms and traditions and fear of repercussions. Cultural shadow policies could include the pressure to work unpaid overtime or stay late after work. Oftentimes these rules are unspoken and are expected of employees if they want to fit within the workplace culture. Leadership behavior and power dynamics can play into how these expectations are formed over time. Shadow policies are more likely to form in organizations that have a strong informal power structure. Most shadow policies stem from a lack of clarity and communication. It’s important that companies aim to remove ambiguity in policies to ensure that company expectations and power structures are clear to all employees. Creating and maintaining a clear code of conduct can help ensure that all employees are aware of the guidelines and principles of the workplace, and are able to spot when company policy is not being followed or getting overlooked.

The Impact of Shadow Policies on Organizational Culture

Shadow policies can have an immense impact on organizational culture and compliance. Over time, shadow policies can erode the trust that employees have in leadership. Because shadow policies undermine formal policies, employees can become confused about which rules they are supposed to follow. This can also lead to perceived inequality, where some teams may feel like they are being to a different standard or set of rules then other teams at the company. Furthermore, shadow policies can increase unethical behavior as employees feel like they need to follow shadow policies to fit in or succeed. Overtime this can create job dissatisfaction and stress and anxiety for employees. This erosion of company values and integrity can have long-lasting impacts on a company if shadow policies go undealt with.

How can shadow policies be prevented and corrected?

Having a strong, current, and easy-to-understand code of ethics can provide employees with the correct course of action, even when others attempt to implement shadow policies. A clear management structure and chain of command also gives employees a clear understanding of who at an organization has the authority to implement changes, and by providing a safe and secure way for employees to report concerns can help you identify shadow policies. Establishing a speak-up culture can foster integrity and encourage people to communicate when they notice shadow policies in practice.

Conclusion

Shadow policies are often unspoken policies that are implemented by a worker or manager who lacks the proper authority. They often stem from cultural, procedural and structural factors and can have large detrimental effects on company culture if not properly dealt with. Maintaining an updated code of conduct and putting in place a clear chain of command and established leadership can help to prevent shadow policies.