The call for companies to establish effective ethics and compliance programs continues to grow as legal developments force companies to take greater responsibility for their actions. However, what a lot of people want to know is if these programs even really work. Are they worth the money invested in them? There’s no law saying you have to have a compliance program in place, it’s simply recommended as a defense against a number of laws. We’ve heard of companies being granted additional consideration and lesser penalties because they have an effective ethics and compliance program in place – but how often is this the case?
Effectiveness of Ethics and Compliance Programs
The Ethics Resource Centre, Ethics and Compliance Officer Association and the Society of Corporate Compliance and Ethics teamed up to prepare a report for the DOJ. The focus of the report was to get the DOJ to provide more information about the role of ethics and compliance programs in enforcement decisions. In a press release issued by the ERC, it states:
“Ethics and compliance practitioners seek data from the U.S. Department of Justice that identifies how often an effective ethics and compliance program yields a direct return in enforcement decisions, according to a survey jointly conducted by the ERC, ECOA and the SCCE. We welcome the recent efforts by the DOJ to publicize cases where it has rewarded companies for having strong ethics and compliance programs, but the ethics and compliance community challenges the Department to take steps to be even more forthcoming with information.”
The press release also includes a list of some of the different types of data that ethics and compliance professionals would like to see the DOJ report. The list includes:
- Descriptions—without identifying information—of individual cases in which ethics and compliance programs were a mitigating factor in enforcement decisions.
- Information about what specific aspects of an ethics and compliance program factored into enforcement decisions.
- Information about the benefits of an effective ethics and compliance program, such as helping avert a decision to prosecute or avoidance of other sanctions such as appointment of a monitor.
The survey made it clear that in order for ethics and compliance programs to get greater support within American businesses, the DOJ needs to release information showing how efforts to mitigate workplace misconduct benefits companies. The general consensus tends to be that ethics and compliance is seen as a cost centre – which in my opinion isn’t true whatsoever. In order for ethics and compliance professionals to get the funding they need to push forward with their programs, they often have to prove to other executives that there are financial benefits to these programs.
In today’s business world where money is tight and spending is scrutinized, this can be a really big challenge, as the results of an ethics and compliance program are usually not felt immediately. If ethics and compliance professionals had more information from the DOJ about how ethics and compliance programs impact their decisions and the difference in penalties handed down because of an effective program, these professionals might have the ammunition they need to justify an investment in ethics and compliance.