Although creating an ethical culture spans much further than workplace policies and procedures, it’s important for employers to set the tone for workplace ethics within these documents. Ethics and compliance programs help to establish a more secure workplace. An organization committed to ethics and compliance can reduce their exposure to risks, such as fraud and bribery, if employees are aware of the enforcement and consequences they will face if they get caught.
Typically, if an employee knows they are likely to be caught or the penalty for violating regulations is significant, employees will be less likely to make risky decisions. With an increasing number of sentences and dollar values of fines handed out to both individuals and corporations for violating laws, enforcement agencies have demonstrated the need for ethics to provide security in the workplace.
A Secure Workplace
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“Every organization should put in place an ethics and compliance program that ensures comprehensive reporting, clear accountability and full and effective oversight by the top decision makers. But to make the program truly effective—to maintain compliance, no matter how stressful the economic environment—it’s even more important to develop a culture that’s fully committed to ethics and compliance”
In order to create a more secure workplace, employers have to take appropriate action to put systems in place that support workplace policies and procedures. Companies need to encourage employees to come forward with information to ensure a safe workplace, as awareness of an incident is the only way to correct it. Reporting systems, when used properly, help bring managerial attention to issues early on. Early detection of workplace misconduct can assist in reducing financial losses, protecting employees and maintaining a positive corporate reputation. In previous posts, we have covered various methods for developing a code of ethics, as well as building ethics and compliance into corporate culture. Once policies and procedures have been put in place, it’s important to measure the success of the ethics and compliance program.
A Whistleblower System
According to the board of directors ethics and compliance section on the Deloitte website:
“An effective ethics and compliance program requires senior management involvement, organization wide commitment, an effective communications system, and an ongoing monitoring system. Successful whistle blowing procedures require strong leadership from the board and senior levels of management to develop a culture in which all employees are encouraged to raise their concerns without a fear of retaliation.”
When implementing an effective whistleblower system, consider using a case management system, such as i-Sight, that supports multi-channel case entry. i-Sight can be integrated with existing HR systems and hotlines. Depending on the type of incident or complaint being made, the complainant may wish to remain anonymous. Aside from reporting observed misconduct to supervisors, placing intake forms on company websites and intranets, as well as through a third party hotline, provides employees and members of the public with sufficient means for reporting incidents and complaints. When there are multiple channels in place for reporting, those with information pertaining to an incident are more likely to come forward.
Monitoring the Ethics and Compliance Program
Once company policies and procedures have been brought to life through implementation and training, employers must have measures in place to monitor the success of their ethics and compliance programs. As there are no set standards for monitoring an ethics and compliance program, determining the success of the program can be difficult. Many companies turn to industry leaders in ethics, benchmarking the elements found in leading programs against those established in their own programs. I came across an Ethisphere article, “Expert Corner: Auditing an Ethics and Compliance Program,” by Dan Swanson and Jose Tabeuna that provides a great list of factors to consider when developing a method for monitoring an ethics and compliance program:
“A summary of potential audit and related evaluative approaches are as follows:
- Review compliance program design, structure and processes
- Identify effectiveness indicators
- Perform gap analysis- how do your C&E program features compare to established criteria and leading edge practices?
- Benchmarking- how do your program features compare to your peers?
- Audit the program- assess implementation
- Validate operational features of the C&E program
- Gauge awareness and perceptions on the C&E program and assess organizational culture (conduct cultural assessment surveys, focus groups, etc.)
- Audit compliance with standards
- outcome/impact analysis
- Test whether transactions and activities meet legal requirements and company policies and standards
- Perform other analysis to evaluate whether C&E program activities are reducing the risks of misconduct.”
Monitoring is critical to the success of any ethics and compliance program. Policies and procedures must be consistently evaluated to measure their effectiveness and ability to mitigate risk. Updating ethics and compliance programs is also necessary in order for a company to remain compliant with updated and changing legal requirements.