E&C Programs Lack Effectiveness Without Cohesion: The E&C Pulse - May 27, 2020

May 27, 2020 Ben DiPietro

May 27, 2020

E&C Programs Lack Effectiveness Without Cohesion

 

Your ethics and compliance program checks all the boxes that would indicate it is effective, but are all the parts working together?

 

For all the talk about the top hallmarks of a strong E&C program, or the best practices for how to create, operate, and sustain a program, LRN’s 2020 E&C Program Effectiveness Report found organizations where all the components aren’t interrelated are less likely to have strong ethical cultures than programs where everything is connected.

 

"This report drove home to me that you can't have an effective compliance program unless they're all working in concert and working in concert together,” Tom Fox said in a recent podcast with LRN’s Susan Divers, author of the report.

 

“I'm interlacing my fingers because I really want to emphasize the interconnectedness of all of the components of a compliance program,” he said. “That would be a fair assessment from this year's report.”

 

Divers agreed, saying it's really a key principle has been somewhat neglected, in part because there's been much too much emphasis on checklists. She referenced an Ethics and Compliance Initiative report that was harsh about the over-reliance on checklists, which it said gives organizations a false sense of security.

 

“It's as if somebody has... taken the OECD checklist and said, ‘Great, we've got that and we've got this and we've got this and we've got that,’” said Divers. “But they haven't connected them, and they haven't really looked at them in a holistic and dynamic way and said, ‘OK, what is it that we're really trying to accomplish, and how are all these elements either working together to accomplish it, or not?’

 

"What we see, too, in our practice is that when organizations actually do connect those dots, they find that they have a lot of hidden synergies or hidden successes that they can then scale out and and use,” she said.

 

That means being able to assess continually, and receive feedback about, the culture. The PEI report found organizations seen as having highly effective and integrated programs are 60% more likely to hold roundtable discussions on ethics and compliance, compared to places with less-effective programs.

 

Top programs are 30% more likely to include questions about ethics in employee engagement surveys, and 60% more likely to use tools to gauge the levels of trust, respect, and transparency in the organization.

 

It’s also seen in how managers are used to convey and emphasize messages of ethics, values, and doing the right thing, as the report found the best programs have managers who take responsibility for E&C failures; model behavior based on organizational values; deal with concerns raised by their teams; consider ethics when giving promotions, raises, and evaluations; and initiate talk about E&C issues in meetings.

 

“If you don't have a values-based culture that says trust is absolutely critical, respect is critical, transparency is critical, then you just don't really have a program,” said Divers.

 

                                                                                                            BEN DIPIETRO
                                                                                                       @BENDIPIETRO1
                                                                                       BEN.DIPIETRO@LRN.COM

 

 


THE ELEVEN

 

Volkswagen is in hot water, and pledged to investigate after pulling a car ad it admitted was racist.

 

Budget and people cuts to E&C programs because of COVID-19 could lead to less stringent internal oversight, WSJ's Kristin Broughton reports.  

 

Jonathan Haidt, professor of ethical leadership at NYU’s Stern School of Business, talks to The Atlantic about COVID-19, polarization, and politics.

 

Boeing has a new chief compliance officer, Uma Amuluru, as part of its effort to combine its legal and compliance departments.

 

COVID-19 cases involving inmates are working their way through the courts.

 

Hawaii is taking hard line toward visitors who violate quarantine rules.

 

Public bathrooms will be a major area of concern as workplaces reopen.

 

Bad behavior won't be able to hide behind COVID-19, Aaron Nicodemus writes.

 

Radical Compliance analyzes COSO's new guidance for risk appetite.

 

Facial recognition systems are training to identify people wearing masks

 

Ira Kalb writes on LinkedIn about how to be a better manager.

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