The E&C Pulse - March 12, 2019

March 12, 2019 LRN Corporation


High-Impact Programs Embed Ethics, Compliance Throughout the Business 

profile_pics_5Organizations considered to have high-impact ethics and compliance programs are those that inspire employees to behave ethically and support moral leadership by managers, enabling them to think and act based on shared values and not short-term gains or check-the-box legal requirements, according to LRN’s Program Effectiveness Report for 2019, which is being released this week.

“Operationalizing ethics and compliance programs instead of relying on checklists isn't just an admirable goal,” stated the report. “It's a necessary shift if organizations are to meet the expectations of government watchdogs as well as mitigate the risks they increasingly face in this time of radical evolution of workplace norms and social media transparency.”

The report, based on a survey of about 500 people in ethics, compliance and law, found companies that fully integrate ethics and compliance into their operations outperform in workplace effectiveness those that don’t. The report measures the impact of ethics and compliance on three types of behavior: ethical decision-making, organizational justice, and whether employees speak up, actively contribute and openly exchange ideas.

It found organizations that operationalize ethical decision-making throughout their businesses are four times more likely to have a positive impact on their employees and their consideration of the enterprises’ values before they act. These companies also are nearly four times as likely to have a positive impact on their employee engagement.

The 2019 report asked respondents to rate their organizations against eight statements. These include: “Managers in my organization sometimes act as if they are above the rules,” and “Employees trust that their leaders consistently make values-based decisions,” and “Employees in my organization do the right thing, even if it’s not in their personal best interest.”

Respondents whose ethics and compliance programs that scored an average of 80% positive responses or higher are ranked as high impact, while low-impact programs scored 65% or below.

The results also focus on data trends that identify emerging best practices. These practices include analyzing ethical behavior as part of employee reviews and pay, with 28% more respondents saying it mattered in their performance reviews in 2019 versus 2018.

Other characteristics of high-impact programs:

  • They make it easy for employees to do the next right thing, and not just the next thing right; 
  • They directly affect business decisions, permeating their organizations and stakeholder groups;
  • They have senior leaders, middle managers and boards of directors engaged in the prevention of misconduct;
  • They hold senior leaders and top performers accountable; and
  • They take a proactive and comprehensive approach to managing risk.

“High-impact programs focused their training on encouraging ethical behavior, not just adhering to regulations, by a wide margin over other programs,” stated the report.

High-impact organizations were three times more likely to have codes of conduct that emphasize achieving business goals consistent with organizational values, were nearly two times as likely to base decisions on risk assessments, and are 1.4 times more likely than others to use a root-cause analysis when misconduct occurred.

“Embedding E&C programs into organizational operations broadens the programs' impact and makes it easier for employees to comply,” stated the report. “Focusing on accessibility, simplicity, and easy-to-use processes is long overdue in the E&C area.”

 (Look for more about the report in future newsletters, and on the LRN blog.)


Ben DiPietro



Respondents to LRN's Program Effectiveness Report were asked whether the training programs at their organization were increasingly focused on guiding and encouraging ethical behavior, along with educating employees about regulatory topics, and 64% of those deemed to have a high-impact ethics and compliance program said they did, compared to 28% at low-impact programs. The overall average was 44%. 



Wells Fargo says it has changed its culture for the better after its fake accounts scandal, but many employees don't agree, saying they still face much pressure to get all the money they can from customers, The New York Times reports.

China and other countries have halted flights of Boeing's 737 Max 8 aircraft after one crashed in Ethiopia, killing 157 people, Washington Post reports. The U.S. hasn't grounded the plane, though it's the second crash involving a Max 8 in the last six months, Axios reports.. Some passengers are fearful of flying in the aircraft, Bloomberg reports.

The #MeToo movement is making progress around the world, Foreign Policy reports.

Is it an auditor's responsibility to look for fraud? Martin Kenney asks the question on the FCPA Blog.

Supported by documents uncovered through the Panama Papers, attorneys representing poor villagers in the African nation of Sierra Leone are suing diamond mining company BSG Resources for pollution, health problems, human rights violations and forced removal from their land, ICIJ reports.

What gives children so much moral authority? Karen Leggett explores the question in Washington Post.

It's wrong to look at artificial intelligence as a winner-take-all fight between nations, Justin Sherman writes in Washington Post.

Fake or substandard drugs being given to children are leading to hundreds of thousands of deaths each year, CNN reports. 




Reserve your spot on March 27th for a webcast featuring LRN's Susan Divers, Peter Florstedt of AECOM and Joseph Suich of GE Power. Learn from two practitioners as they discuss systems in use, insights gained and actions taken through this type of data analytics.



Restoring trust will take more than software." LRN Founder & CEO Dov Seidman stresses the importance of "scaling 'moralware' through leadership" in the age of Artificial Intelligence (AI) during The New York Times New Work Summit. 



About the Author

By combining values-based education, rich insights, and expert advisory services into innovative, comprehensive solutions, LRN can help elevate behavior and the bottom line for your company.

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