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LRN_PH_Whitepaper_Maximizing the Impact of Your Ethics & Compliance Program: What Works Best?

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AUTHORS SUSAN DIVERS — SENIOR ADVISOR, LRN CORPORATION JONATHAN DRIMMER — PARTNER, PAUL HASTINGS LLP Against the background of continuous scandals in the corporate world and other institutions, ethics and compliance professionals play an increasingly critical role in their organizations today—nothing less than preventing misconduct and remediating it effectively when it occurs. Add to that the increasing focus by regulators on results, not just program design and implementation, seen vividly in the U.S. Department of Justice's Evaluation of Corporate Compliance Programs (ECCP), updated in May 2019. As the role of the E & C professional has grown and regulators have become more demanding, budgets, staffing and investment haven't necessarily kept pace. Thus, the question of what are the "must haves" that drive program effectiveness and without which programs fail has become even more important to E & C professionals facing limited resources. Combining our expertise as two former Chief Ethics and Compliance Officers and practitioners, our joint research and experience points to five areas that can act as catalysts, driving ethical culture and principled behavior and transforming a less impactful program into a more effective one. See our white paper on this topic for an in-depth discussion. With that in mind, here are our top five priority action areas that underpin ethics and compliance program effectiveness and advice on how to implement them: 1. MANAGERS MUST PRACTICE WHAT THEY PREACH If employees see their managers modeling behaviors and following the rules, there is a good chance the employees will do the same. The converse is also true: if a manager engages in unethical behavior himself or herself, it legitimizes misconduct in their teams. The bottom line is that ethics and compliance messages are only effective when they are incorporated into the actions of the company and its management at all levels. Since many managers are not familiar or necessarily comfortable with ethics and compliance topics, practical training to provide them with the resources they need and incentives to do so as part of performance management are good initiatives to pursue. LRN's 2019 Program Effectiveness Report showed a significant increase in the use of ethical behavior criteria: 28% more respondents said it mattered in performance reviews in 2019 versus 2018, and almost three times more said it figured prominently in bonus allocations year over year. MAXIMIZING THE IMPACT OF YOUR ETHICS & COMPLIANCE PROGRAM: WHAT WORKS BEST?

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