Does your Ethics & Compliance Program Impact Business Decisions and Employee Behavior?

March 29, 2018 Susan Divers

In the wake of the numerous and disturbing sexual harassment scandals that spawned the #metoo movement, it’s fair to wonder how effective ethics & compliance programs really are, despite the millions of dollars spent on them each year. Many of the organizations grappling with harassment revelations have ethics & compliance (E&C) officers, Codes of Conduct, hotlines, training, audit, and the other essential elements of a program. Nonetheless, their E&C programs lacked traction in preventing harassment and dealing with it once employees spoke up. The same could be said about other recent misconduct scandals, Wells Fargo, Volkswagen, for example.

Regulators reflect this concern by increasingly asking hard questions about the impact of an organization’s E&C program, instead of how many employees were trained last year, used the hotline or signed certifications. Most notably, the 2017 evaluation criteria put out by the Fraud Section of the Department of Justice (DOJ) zeroed in on the degree to which an organization’s E&C program is operationalized and influences business decisions and employee behavior. This approach is consistent with LRN’s research on what makes an effective E&C program. Our 2018 Program Effectiveness Report shows that organizations focused on values, not just rules, outperform in terms of program impact and meeting the DOJ criteria for business integration.

Operationalizing compliance was a keynote topic at Ethisphere’s recent Global Ethics Summit. Leading E&C officers from Boeing, Walmart, Tenneco and Emergent BioSystems shared their insights on taking ethics and compliance programs beyond checklists and into the workings of the organization. Key strategies included:

  • Make ethical behavior co-equal with business performance in annual performance review evaluations. Use workshops, scenarios and discussions to ensure that everyone understands that HOW goals are achieved is as important as getting results;
  • Use clear and consistent messaging, driven from the top and throughout the organization stressing values. Video segments of leaders discussing ethical choices or experiences can drive trust and engagement;
  • Ask the Board of Directors to set ethical, values-focused goals for executives that must be met, measured and impact their compensation for that year. Doing so puts E&C on the company’s agenda as a priority;
  • Ensure that business leaders own compliance within their business units rather than leaving it to the legal or compliance team. Use a matrix structure for the ethics function that engages business leaders in identifying and managing risk, framing investigations and remediation, working with the ethics team;

Other strategies include setting a specific agenda item to discuss “bad” news or worrisome trends to ensure it is fully heard, team competitions at sales off-sites that hinge on E&C choices, streamlining the back-end of policies and procedures to make them simpler and more accessible.

The over-arching theme for the session was that ethics and compliance are everyone’s responsibility, with ethics and compliance serving as coach and catalyst.

To learn more about the insights from our latest report, download our E&C Program Effectiveness Infographic:


About the Author

Susan Divers

Experienced Ethics and Compliance Executive. Senior Advisor at LRN

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