You’ve heard it before- a strong ethics and compliance program begins with a top notch workplace ethics and compliance policy. But do any of these sources ever tell you exactly what makes an ethics and compliance policy “top notch”? Most of the time, the answer is no, which is why I have decided to dedicate this post to helping you better understand the elements of a top notch ethics and compliance program. It’s important to understand that each company’s ethics and compliance policy will be different, as policies are built around a company’s processes and is influenced by the industry in which it operates. However, there are common elements that must be included in every company’s ethics and compliance policy- it’s the “little extras” that are included that separate the top notch ethics and compliance policies from the not-so-stellar ones.

Begin With the Basics

A good way to determine what to include in a corporate ethics and compliance policy is to identify the ethical risks your company encounters and provide solutions and guidance for those situations. Think about ethically compromising situations employees at all levels may face, document them, and build your ethics and compliance policy around them.

Basic elements of an ethics and compliance policy include:

• Compliance with the law- Compliance with local and industry laws are the most basic forms of compliance. I believe that companies need to challenge themselves to go beyond complying with the minimum standards. Build upon existing laws to take your company’s ethics and compliance program to the next level.
• Definition of unethical behaviour- Address various forms of unethical behaviour- harassment, discrimination, theft, fraud, retaliation, etc. Define each of these terms, provide real life examples and consequences for violating the policy. Some companies choose to adopt a zero tolerance attitude towards these issues. If your company does, make it clear.
• Integrity statement- Every company should promote honest business. Many companies include their mission, vision and goals for employee conduct in this section of the ethics and compliance policy. According to the Canadian Centre for Ethics & Corporate Policy,

“A code of ethics usually proposes specific principles and rules of conduct. A key objective of a code is to provide guidance on expected behavior as well as rationale for that behaviour. A code also provides a way for a company to measure and monitor performance designed to achieve objectives and to instill values.”

• Anti-Bribery, gifts and entertainment- To avoid involvement in bribery, let employees know where your company stands on the issue of gifts and entertainment. Some companies allow gifts to be sent or received if the gift is under a given value. Isuggest eliminating as much grey area as possible from your company’s ethics and compliance policy. Make it clear- no gifts!
• Reporting unethical behaviour- Employees are likely to uncover unethical practices in the workplace before senior executives. To catch violators earlier, let employees know how to report misconduct. Include hotline phone numbers, Ombudsman information, website addresses and other information pertaining to filing a complaint. This information is usually found at the beginning or end of the policy, or sometimes even both. 
• Confidentiality- In some cases, ultimate confidentiality cannot be maintained due to the discovery of a criminal act or a court case. Make a statement that confidentiality will be upheld to the highest possible degree for those making complaints or involved in internal investigations.
• Accurate accounting- Corporate accounting is highly regulated, but often violated. Here’s a great example of an accounting integrity clause that Exxon Mobil has included in its corporate ethics policy:

“It is the Corporation’s policy that all transactions will be accurately reflected in its books and records. This, of course, means that falsification of books and records and the creation or maintenance of any off-the-record bank accounts are strictly prohibited. Employees are expected to record all transactions accurately in the Corporation’s books and records, and to be honest and forthcoming with the Corporation’s internal and independent auditors.”

Ethics and Compliance Policy Template

One of my co-workers passed along this ethics and compliance policy template to me. The template was developed by the Sans Technology Institute, and has been made available for use within organizations. The sections outlined in this template cover majority of the issues that should be outlined in an ethics and compliance policy, but I would recommend using this as guidance only. Tailor your ethics and compliance policy to your business and be specific. For example, don’t just state that consequences will be handed down to those who are found guilty of violating the policy, include the punishments in the policy.

Don’t forget, go public with your policy. Place the document on your company website to increase accountability and transparency.

It seems to be that each week is busier than the last. Here are some of the things we blogged about this week- as well as some other pieces that caught our attention regarding internal investigation, human resources and ethics:

Monday:

• Blog Post- Maintaining Information Security and Privacy

“Early last week, a USB key containing hundreds of Ontario patient health information files was stolen. According to the CBC, the USB wasn’t encrypted and was stolen from the purse of a University Hospital Network (UHN) employee. The theft of these files has resulted in a call for efforts to increase the security of sensitive information. This is the second instance in under a year where private patient information was compromised in Ontario due to theft. The lesson learned from this story can be applied to any business that maintains client or customer personal information records: make sure sensitive information is encrypted. Controlling access to information can further prevent information security breaches, as the number of people viewing sensitive information is decreased. Regular evaluation of training programs and internal procedures related to information security must be undertaken to ensure each employee is completing the necessary steps to safeguard information. ”

Tuesday:

• Blog Post- HP CEO Violates Company Code of Conduct

“On Friday, HP CEO Mark Hurd was asked by the company’s board of directors to submit his resignation. As reported in the TechCrunch Article “HP CEO Mark Hurd Resigns, This Looks Messy,” the outcome of an investigation into sexual harassment allegations against Hurd “concluded that there was no sexual harassment violation, however it did find that Hurd violated HP’s ‘Standards of Business Conduct.‘” When news broke about his departure, Hurd claimed he himself hadn’t lived up to his own standards regarding integrity and respect. Therefore, if he wasn’t able to live up to these standards himself, what message does that send to the rest of the employees at HP?”

Wednesday:

• Blog Post- Whistleblowers Granted Additional Protections Under Dodd-Frank Act

“Employers must be prepared to follow new legislation that has been enacted to increase protections for whistleblowers. The recent passing of the Dodd-Frank Act continues to follow the trend towards putting an end to whistleblower retaliation- as well as rewarding whistleblowers for bringing forward evidence of unethical or criminal acts taking place within an organization. Whistleblowers can become victims of retaliation whether it comes from managers or fellow employees.”

Thursday:

• Blog Post- Ethics Resource Centre Releases Information on the Cost of Workplace Retaliation

“As part of the National Business Ethics Survey conducted by the Ethics Resource Centre (ERC), the ERC releases supplemental research briefs that focus on a number of topics from the survey in a more detailed manner. The most recent release featured information pertaining to the cost of retaliation on both the company and its employees. As mentioned in yesterday’s post about the Dodd-Frank Act and its whistleblower protections, retaliation is a growing concern in the workplace. In many organizations, employees are an employer’s eyes and ears when it comes to catching workplace misconduct. To establish a workplace that is safe and enjoyable for all, employers must work to create an environment that encourages the reporting of misconduct. The ERC survey concluded that companies with a zero tolerance policy for retaliation experienced very few instances of retaliation, which demonstrates that efforts to prevent retaliation do have an impact.”

“The ERC is a nonprofit, nonpartisan research organization, dedicated to independent research that advances high ethical standards and practices in public and private institutions.   With the global recession of the past year, we are also focusing closely on ethics and compliance aspects of the federal government’s response.  The American economy’s dislocation has been so severe, and the government’s strategy so massive and sweeping, that we are witnessing ethics issues never seen before here in the nation’s capital.”

- ERC President Patricia J. Harned

The Ethics Resource Centre

For the past 88 years, the Ethics Resource Centre (ERC) has been a source of information and guidance for ethics and compliance professionals everywhere. The information provided by the ERC serves as a benchmark for companies when gauging the success of their own ethics and compliance programs. The ERC conducts both national and private, single organization surveys, and publishes the results to help businesses and government agencies understand trends, gaps and best practices in ethics and compliance.

The ERC has launched a Student Fellows program targeted at secondary school students, to help instill ethics into their daily decisions. Emphasizing ethics and compliance at a young age helps prepare future business leaders by shaping them to be ethical thinkers. The ERC also provides information on developments and trends in federal legislation, regulations and ethics and compliance related court decisions. On the ERC website, they state, “we take advantage of its Washington, D.C. location to encourage understanding between business and the federal government.”

ERC Resources

The ERC houses countless ethics and compliance resources. The ERC releases a number of publications, survey and articles, as well as providing services to help companies develop, implement and measure their ethics and compliance programs. Here are some of the informative resources the ERC has to offer (all of the information and resources below are available on the ERC website):

Ethics Toolkit: The Ethics Toolkit contains a number of guides that outline tips and techniques for writing codes of conduct.

National Surveys- Data from the ERC is used widely throughout business, government and academia. According to the ERC under the “National Surveys” section of their website:

“As the only longitudinal survey measuring how employees at all levels in more than 3,000 U.S. workplaces view ethics within their own organizations, NBES is a valuable tool for business leaders, policymakers, boards of directors, ethics and compliance officers, consumers and investors  interested in monitoring ethics trends and better understanding ethical practices within organizations.”

Here are the links to the National Business Ethics Survey and some of its supplements:

• 2009 National Business Ethics Survey
• 2009 NBES Supplement: Ethics and Employee Engagement
• 2009 NBES Supplement: The Importance of Ethical Culture: Increasing Trust and Driving Down Risks
• 2009 NBES Supplement: Saving the Company Comes at a Cost: The Relationship Between Belt-Tightening Tactics and Increased Employee Misconduct

Publications: The ERC offers a number of articles and videos to assist companies in promoting ethics and compliance within their workforce. The ERC publishes a monthly newsletter entitled “Ethics Today,” which features ethics and compliance related articles and upcoming events. Every few weeks, the ERC publishes an EthicsStat- statistics that have been pulled from ERC research, surveys and other educational initiatives. The publications section also features a list of ethics and compliance books, staff articles and publications from groups partnered with the ERC.

Webcasts: The ERC provides a list of upcoming webcasts, as well as archiving past webcasts available for viewing free of charge. Webcasts cover issues including ethics and compliance risk, whistleblower rights, ethics and compliance programs, organizational culture and how to measure ethics and compliance programs.

Services: The ERC offers training and support services to help business leaders get the most out of their ethics and compliance programs. The ERC has created the “Benchmark Services Team,” to provide guidance on creating and issuing workplace ethics surveys, identifying ethics and compliance risk and measuring program effectiveness. There’s a lot that must be considered when developing and maintaining an effective ethics and compliance program. Services, such as these offered by the ERC, make it easier for business leaders, HR managers and ethics and compliance professionals to understand the information collected from workplace surveys and identify the next steps to overcome the identified challenges.

The $1.6 billion fine handed down to Siemens in 2008 was much more than a record breaking fine, it was a lesson for other companies to learn from. Prior to the bribery scandal, Siemens had an ethics and compliance program in place, however, there was a missing link between leadership and the enforcement of the program. The company’s cooperation during the SEC investigation lead to a reduced penalty, but also gave way to a complete re-design of the company’s internal ethics and compliance controls. There are many lessons learned from the Siemens charges, the reaction to the investigation and the actions taken by Siemens to position the company as an ethics and compliance leader in the post-scandal era.

Bribery Investigation

An amnesty plan had been worked out with Siemens, as employees willing to come forward with information pertaining to the bribery scandal and identifying key players, would be free from prosecution. In a report from the Wall Street Journal, the amnesty program was offered to all Siemens employees (110 of which came forward with information), with the exception of the 300 employees who made up the company’s top executive team. One particular employee who provided inside information was indicted employee Reinhard Siekaczek. He reported that he managed an annual budget worth $40-50 million, which was considered to be a “bribery budget”. As reported in the New York Times article “At Siemens, Bribery Was Just a Line Item,” salepersons and managers within the company used this money- “slush fund”,  to maintain relations with corrupt government officials.

The level of cooperation in the investigation significantly reduced the cost of the settlement with the SEC. In comparison to other companies hit with scandals, Siemens responded quickly to put measures in place to detect and prevent future acts of bribery within the company. In the New York Times article “At Siemens, Bribery Was Just a Line Item,” they state Siemens was provided with additional leniency, only having to plead to accounting violations, “because pleading to bribery violations would have barred Siemens from bidding on government contracts in the United States.”

In the Ethisphere article “Prepared Remarks to Compliance Week 2010- 5th Annual Conference for Corporate Financial, Legal, Risk, Audit & Compliance Officers,” Assistant Attorney General Lanny A. Breuer states:

“In the end, the benefits Siemens received through its cooperation, even in the absence of a voluntary disclosure, were plain – the $450 million fine that was paid to the Justice Department, although quite substantial, was a far cry from the advisory range of $1.35 billion to $2.7 billion called for in the Sentencing Guidelines. Put another way, Siemens received a penalty that was 67 to 84% less than what it otherwise could have faced had it not provided extraordinary cooperation and carried out such extensive remediation.”

Ethical Recovery

An investigation was launched into the bribery scandal in 2006 and was completed in 2008. The cooperation exhibited by employees at Siemens allowed the investigation to be conducted in less time than originally predicted. Rather than replacing former executives with individuals from inside the company, Siemens filled the roles of major positions with outsiders- which was probably for the best. In 2007, Peter Solmssen was brought into to clean up the ethics and compliance disaster at Siemens.  Also in 2007, Siemens named Peter Löscher as the company’s new CEO.

Siemens has worked to improve their corporate reputation by ensuring that compliance is integrated into the furthest reaching corners of their business. Siemens hired Michael Hershman, of Transparency International, to help build a compliance and anti-corruption policy and training program. Similar to the actions taken by Ed Breen at Tyco, Löscher replaced many of the company’s top executives to start fresh. In most companies the ethics and compliance department remains fairly small, however, Siemens was determined to put their words into actions and created an ethics and compliance department consisting of 600 employees- one of the largest to date.

Since the Settlement, Siemens has divided the company into three divisions in order to clarify reporting lines and increase responsibility. In the New York Times article “Siemens’s Prosperity Doesn’t Obscure Bribery Scandal,” they discuss the reasoning behind the division:

“Mr. Löscher also put the leaders of those three sectors onto the central managing board in Munich. That puts an end to a system in which a leader of a major business, like power generating, had his own managing board and reported to Munich headquarters without being based there. Siemens officials say the old way allowed corruption to spread and inhibited accountability.”

Siemens has developed a training program, with employees at various levels receiving training in regards to issues faced based on employee role. The format and frequency of training also varies depending on level within the organization. On the Siemens corporate website, they communicate that training includes topics such as foreign laws and corruption risks. Employees are now required to sign a statement after reviewing the company’s code of conduct, in order to communicate their commitment and understanding of the code.

Here is a link to a slide deck I came across from a presentation prepared by Siemens titled “Compliance Program at Siemens,” presented at Strengthening Integrity In Private Sector Organized by UNDP, MENA-OECD. The slides contain specific information related to the ethics and compliance program currently in place at Siemens.

It seems to be that each week is busier than the last. Here are some of the things we blogged about this week- as well as some other pieces that caught our attention regarding internal investigation, human resources and ethics:

Monday:

• Blog Post- An Argument for Centralizing Employee Relations Data Within Multi-Nationals

“Companies operating globally face a growing number of employee relations and compliance related challenges. The most important challenge is their ability to adapt to local laws and cultures, while ensuring company-wide adherence to standards developed at head office.  In order to operate on a global scale, many organizations have employed a decentralized structure.  Although this is an effective strategy for enabling rapid decision making and customization of product & service offerings, it presents a significant challenge for compliance and HR professionals.   More specifically, we’ve seen many clients empower their local HR teams to investigate employee complaints or reports of misconduct.

Author:  Jason Victor | i-Sight Director of Solutions & Support| Jason is one the original developers of the i-Sight solution and now leads the i-Sight IT & Support groups. He’s been involved in over 150 i-Sight implementations including global implementations at Dell, Coca-Cola, AllState, Siemens, DSGi and many others.”

Tuesday:

• Blog Post- Ontario’s Bill 168 in Effect Today

“Workplace violence and harassment continue to negatively impact the workplace. Newly introduced legislation, such as Ontario’s Bill 168, defines measures employers can take to protect employees from threatening work situations. When preparing policies and procedures to comply with such laws, it’s important to consult with employees. Employees are an employer’s number one resource for identifying workplace risks, as they are the ones performing their jobs on a consistent basis. It’s important for employers to remember that the time spent creating policies and training employees is an investment in a safe workplace.”

Wednesday

• Blog Post- Insurance Fraud Investigations

“During tough economic times, many speculate there to be an increase in the number of fraudulent insurance claims made. The Coalition Against Insurance Fraud reports that in the US alone, $80 billion is lost to insurance fraud each year. There have been numerous pieces of legislation created to crackdown on insurance fraud. Insurance fraud has been classified as a crime in the US, with almost every state establishing its own fraud bureau. In Canada, the Insurance Crime Prevention Bureau was created to gather information and carry out investigations regarding insurance fraud. In the UK, fraud has been labeled as a crime under the Fraud Act established in 2006.”

Thursday:

• Blog Post- International Code of Conduct: United Parcel Service

“Writing globally accepted ethics policies is a challenging task for any business. Varying in culture, ethics, laws and employee expectations, no country conducts business in the exact same way. At United Parcel Service (UPS), the global presence of the company meant establishing international standards for all of the company’s employees. The successful integration of the UPS code of conduct into global operations demonstrates how understanding cultural differences and employee needs helps management develop policies that are easily understood by all- regardless of the country the employee operates out of.”

Writing globally accepted ethics policies is a challenging task for any business. Varying in culture, ethics, laws and employee expectations, no country conducts business in the exact same way. At United Parcel Service (UPS), the global presence of the company meant establishing international standards for all of the company’s employees. The successful integration of the UPS code of conduct into global operations demonstrates how understanding cultural differences and employee needs helps management develop policies that are easily understood by all- regardless of the country the employee operates out of.

International Code of Conduct

In a press release on the company’s website, former Chairman and CEO of UPS, Mike Eskew states:

“We care as much about how we get results as we do about getting the results. Getting results at the cost of violations of laws or through unscrupulous dealings do more than violate our standards – they challenge our ability to grow our business and undermine our reputation.”

UPS offers employees the opportunity to suggest changes or “better wording” of sections in the company code of conduct. The code includes a form employees can fill out with the section number they wish to see changed, suggested wording to be used, comments/ reasoning for the change and the instructions regarding where to send the completed form. In 2009, UPS included a human rights statement in the company code of conduct. In the code of conduct they write, “as a global company, UPS recognizes that it plays a role in acknowledging basic human rights in accordance with our high standards for the treatment of our people.”

Cultural Differences

In the beginning, when UPS developed their first international code of business conduct, they had a lot of work to do. Their team held focus groups at a number of global offices to create a relatable and easy to understand code. Benchmarking was also used in order to compare the code with those developed by other companies known as international ethics leaders. In the Ethikos article, “United Parcel Service Translates and Transports an Ethics Code Overseas,” written by Andrew W. Singer, he writes:

“The US code of conduct became the centerpiece of employee focus group sessions that were conducted around the world—16 in Europe, 10 in Asia, 4 in Canada, and 5 in the Americas. What did employees like about the code? What did they not like? In the course of these sessions, training gaps were revealed. An Irish employee, for example, asked, “What is the Foreign Corrupt Practices Act?” (Even though it is a U.S. statute, the FCPA applies to UPS’s foreign employees.) Above all they found that employees wanted the code translated into their own language.

Focus group sessions revealed some problems with the company hotline, initially called the ‘Conduct-line.’ In Asia they discovered: ‘It’s not something we would do,’ that is, report on another employee. ‘That would be like taking someone’s life.’ There was also resistance in other places, like Germany, where totalitarian memories (e.g., neighbors encouraged to ‘report’ on neighbors) were still alive. The ‘Conduct-line’ name was a problem, the foreign employees suggested. If it were renamed the ‘Help-line,’ overseas employees might be more inclined to use it. The latter suggests guidance. ‘Conduct-line,’ by contrast, suggests ‘snitching’ on somebody.”

The conflicts explained in the above excerpt are common for many companies establishing an internationally adopted code of conduct. Tone, wording, sensitivity to certain issues and translation matters are all common when developing global policies. It’s important to address these matters in the development process rather than go back and make amendments later. Employees in other countries respond better to policies that make sense to them and relate to cultural familiarities. The development process helps the company’s compliance department learn more about their overseas counterparts. This makes it easier for both groups to understand and become aware of the cultural differences between each group.

Today, the UPS Code of Business Conduct is available in 12 languages to employees around the world. The UPS Help Line is available in significantly more languages to provide guidance to all employees 24/7. As mentioned above in the excerpt from the Ethikos article, UPS went beyond simply translating the US version of the code. The company’s compliance department took the time to meet with employees from a variety of positions and countries within the company in order to create policies that, when translated, remained meaningful and related to local norms.

Code of Conduct Training

UPS outlines the training process managers and other employees are required to complete upon entering the company, as well as refresher courses for managers remaining with the company. As stated on the company website, the training process includes:

- UPS managers must complete Business Conduct and Compliance training sessions upon becoming a member of the management team.

- A refresher course must be completed by all managers every two years.

- Within 90 days of hire or promotion, employees must also complete additional job related training sessions, including:

• Anti-Corruption
• Antitrust
• Insider Trading
• Information Use and Security Compliance
• Government Contracts
• Canada Employee Privacy
• Business Conduct and Compliance Program
• Records Management

At Timberland, they bring a new meaning to “walking the walk”. Timberland is a company known for its incredible corporate culture and commitment to corporate social responsibility. Timberland is one of only 20 companies to land a spot on the Fortune 100 Best Companies To Work For List since its inception. Timberland has also been included in Ethisphere’s 2010 list of the World’s Most Ethical Companies. At Timberland, they understand the value employees bring to the company.

Engaging in volunteer initiatives helps Timberland employees develop skills they can apply in the workplace, while contributing to a good cause and making a difference in the communities they operate in.

Making a Difference

At Timberland, CEO Jeffrey Swartz emphasizes the need for people to be good citizens—both in and out of the company. Timberland employees can receive up to 40 hours of paid leave each year to pursue volunteer projects and give back to the community. In the Fast Company article “Walking the Walk,” they write:

“What Swartz is really trying to do is to use the resources, energy, and profits of a publicly traded footwear-and-apparel company to combat social ills, help the environment, and improve conditions for laborers around the globe. And rather than using his company as a charity, he’s using the hard financial metrics of profit, return on investment, and shareholder return, to try to prove that doing good and doing well are actually self-reinforcing notions. The idea of helping others, Swartz believes, is a vision around which he is creating a more productive, efficient, loyal, and committed employee base, which in turn helps produce real results.”

These events are not only good for the community, but they also benefit Timberland’s employees. Taking part in events such as Serv-a-palooza and other volunteer initiatives enrich the culture at Timberland by brining employees together in an experience they may not receive elsewhere. Building and reinforcing relationships with co-workers is one of the many benefits gained by Timberland employees when attending these annual events. Timberland’s employees appreciate the actions taken by the company to follow through with their commitment to sustainability and corporate citizenship. It’s important to note these events take place in every country Timberland operates in.

In “Sustainability: sprucing up corporate social responsibility with Timberland,” a Personneltoday interview with Helen Whinfrey, Timberland’s senior manager for European HR, she stated:

“We have a philosophy about our employees doing well and doing good,’ she says. ‘People perform better in their job if they have a connection with their work that isn’t just about pay. It also means the local community knows who we are – we don’t want to be a faceless business with no connection to where we work and trade. Of course we’re a commercial enterprise, but we believe the way we generate profit, treat our people and work with the local community puts that profit in different light.”

Fair, Safe and Non-Discriminatory Workplaces

One of the four core values at Timberland is a commitment to life in the workplace. The company has developed a Code of Conduct Team comprised of 15 individuals responsible for developing the decisions, actions, choices, program design, and strategy at Timberland.

Here are the key areas of workplace improvement as identified by Timberland executives. The list can be found on their corporate website under ‘CSR Strategy’ in the ‘About Us’ section:

Track relevant Supply Chain indicators that influence global human rights

• Measure the average initial assessment score for new factories and set targets for improvement.
• Measure the percent of production in “High Priority” factories and set targets for improvement.

Use the assessment process to highlight issues and prioritize factories in our value chain

• Reduce “High Priority” factories to 20% of supply chain by 2015.
• Reduce working hours violations to 30% of supply chain by 2010.

Through remediation, work with factory management to enact sustainable change by focusing on the root cause(s) of issues

• Increase the percentage of continued business factories with an improved assessment score to 70% by 2015.
• Increase the percentage of continued business factories with an improved health and safety score to 70% by 2010.

Create a sustainable living environment for our workers.

Develop a better understanding of life skills, child care, access to capital, health and nutrition, housing and transportation through the assessment process.

Striving to better understand working conditions in every country of operation demonstrates the emphasis placed on supporting employees at Timberland. The unique culture at Timberland helps the company attract highly qualified individuals who share similar values and are passionate about their work.  Living conditions and the way of life are different across all borders, therefore, a single solution isn’t the answer—and Timberland executive get it. The volunteer projects and events taken on by Timberland employees helps achieve the goal of creating sustainable living environments for all employees. Understanding diversity and the benefits it brings to the company makes Timberland an employer of choice for many individuals.

Integrity Interactive Corporation conducts an annual study identifying the trends and concerns faced by today’s business leaders. As issues of compliance and ethics become a focal point of businesses and policy development, these 12 concerns are the areas that business leaders from around the world feel are the greatest concerns for any globally active company. As laws and cultures differ between both countries and businesses, the number of risks has greatly increased. Here are concerns #1-6 from their list, as well as a discussion surrounding some of the main concerns with in each of these areas and some of the solutions that companies have been using to help mitigate the risks associated with global business.

The 2010 Report: Top Compliance Concerns of Global Companies, is a free download offered by Integrity- you will simply need to fill out the short web form to get your copy.

1. Code of Conduct

It makes sense that a company’s code of conduct would be their #1compliance concern. This document determines the rules you establish to govern your company by and sets both the tone and the top and the tone of your corporate culture. A lot of time and energy goes into creating a code of conduct that addresses the needs of both the company and its employees. Check out our posts “Tyco’s Guide to Ethical Conduct” and “Best Practices: Code of Ethics” to see how you can get the most out of your code of conduct.

2. Mutual Respect

Respect for your workplace and others continues to be a growing concern, as human rights violations and other similar types of issues seem to make headline news on a daily basis. Mutual respect must be addressed in the code of conduct for every organization and should also become an anchor to your company’s corporate culture. In order to keep a better eye on mutual respect in the workplace, many companies have also chosen to establish internal reporting systems, encouraging employees to report any instances of observed misconduct. Reporting systems make it easier to identify misconduct in its earlier stages and begin prompt investigations if required. Provide a safe, happy and supportive workplace that your employees are proud to work for- for a best practices example, see what General Mills offers their employees and what the company has done to become an employer of choice by reading our post “Employee Relations and Ethics Best Practices: General Mills.”

3. Competition Law- US Anti-Trust

These types of laws govern business actions both in a national and international scope. Competition laws exist to protect industries from domination by a single organization, as well as addressing the issue of unfair business practices. In order for an organization to maintain their reputation, compliance to these laws is extremely important. Companies must keep in mind the impact that their decisions have to their consumers and the public in order for fair business to exist. The public looks for disclosure from companies, as they want to know about the processes used in the creation of the products they consume, as well as the environment in which the production took place.

4. Anti-Bribery- US Foreign Corrupt Practices Act (FCPA)

Recently, there have been numerous developments surrounding the level of accountability and types of reprimands handed out to individuals or companies that have violated anti-bribery policies or the FCPA. Many countries have made it a priority to adopt various forms of anti-bribery laws, as well as becoming part of the OECD Anti-Bribery Convention, to criminalize the act of bribing foreign public officials involved in international business deals. Many well known companies have landed themselves in high profile lawsuits for committing acts of bribery. Bribery contributes to the inability for economic development in emerging nations, as well as the creation of unfair competition within the international business landscape. Companies must develop, communicate and train employees on their anti-bribery policies, informing them of the consequences bribery has on both the company they work for and the nation receiving the bribe. Compliance concerns related to bribery remain an area of concern, as companies continue to increase their global presence, therefore, facing greater risks, including the risk of bribery.

5. Conflicts of Interest and Gifts

Conflicts of interest can be difficult to avoid during certain situations- reducing the risk of any perceived conflict of interest has become the goal of many companies to protect their reputation.  If a company or an individual tries to influence the outcome of an event or business transaction, the conflict of interest now has legal implications.  Many of these issues relate to the ethics of a company. Today, companies are placed under great pressure to gain recognition for ethical business practices, as well as transparency and disclosure of company policies and information related to subjects such as internal policies regarding conflicts of interest and gift giving/ accepting. Establish a corporate code of ethics that outlines examples and explanations of what conflicts of interest are and the impact they can have on the company, measures taken to remove these types of conflicts, how to avoid conflict of interest situations, what is considered a gift, as well as any other actions that the company has taken and tat employees can take to further avoid these types of situations.

6. Financial Integrity

A major emphasis has been placed on accounting accuracy and stricter financial reporting guidelines, as the number of companies committing acts of financial fraud continue to climb.  Many companies have started using internal reporting systems, where employees or individuals outside of the company can report suspected or observed financial fraud. Reporting systems allow for earlier detection of fraudulent schemes, putting an end to them as soon as possible. Internal audits have also been used to help catch financial fraud early on to avoid financial collapse or major lawsuits. In order to maintain financial integrity, it’s important that companies put a series of checks and balances in place to oversee accounting practices and reduce the ability for financial integrity to be compromised. Legal frameworks, including Sarbanes-Oxley, have also outlined a number of steps companies must take in order to comply with the regulations of SOX to help ensure financial integrity.

In 2009 alone, General Mills received over 20 awards recognizing the company for their corporate reputation and human resource and employee relations leadership - including awards for managing diversity, working mothers, ethics and corporate citizenship. General Mills was listed to the Glassdoor.com “Employees’ Choice -50 Best Places to Work” and after reading employee comments and rankings for General Mills on the Glassdoor.com website, employees consistently give the company high ratings and praise the company for employee benefit and wellness programs, rates of pay, flexibility for employees with families, commitment to employee development and growth and its supportive culture.

Code of Conduct and Leadership

In the opening address from the CEO, the General Mills Code of Conduct states:

“We hold ourselves to a very high standard at General Mills. Nowhere is that more true than in our expectations for ethical conduct in every aspect of our business. For General Mills, high ethical standards are not something new. It is who we are.”

At General Mills, they address the fact that ethical dilemmas can occur, and if you are faced with one, they have outlined questions to ask and steps to take when faced with such a decision:

• Speak Up- At General Mills, employees are trained to know what is expected and what is considered ethical practice. They encourage employees to ask questions and speak up if they are aware of actions taking place within the company that compromise their commitment to ethics. Employees are free to talk to managers about these issues, but they can also call the Ethics Line if that makes them feel more comfortable.
• Set Examples- General Mills addresses the increased risk for encountering an ethical dilemma when you manage a team- making answers difficult to find. In this situation, remember that ALL employees are accountable to the company and other members of the team, you want to create an open environment, consult available resources, support employees who raise questions and have concerns, as well as report any matters that don’t comply with the company code of ethics, other company policies or the law.
• Ask Questions- The General Mills Code of Conduct also lays out some questions that employees should be able to answer “yes” to when making a decision: Would you feel comfortable with this news in the media? Will my decision protect the reputation of General Mills as an ethical company? Am I being fair and honest? Are my actions consistent with the law and company policies?

Focus on Employees

At General Mills, it’s extremely evident that they provide a high level of support and take a lot of pride in their employees. General Mills provides a number of benefits to their employees- including pension and retirement funds, benefits for new mothers and fathers, as well as adopting parents, medical, dental and insurance benefits for both families and same sex partners, education advancement benefits and local perks for employees working out of the General Mills HQ in Golden Valley, Minnesota. In Canada and the US, all employees at General Mills qualify for their incentive program, as the company values each member’s contribution to the team. General Mills offers flexible work arrangements whenever possible to assist employees in balancing their work and home lives.

The company also offers extensive training programs for employees within various divisions of the company, for example, “HR U” has been created for further training of HR professionals, “Champ Camp” has been created for new marketing professionals and technical professionals may end up training at “Cereal School”. Employees can also undergo formal training sessions at the General Mills Institute, where they create programs aimed at developing employee skills to create future company leaders. The different training environments and formats available for training- they also offer web based training and individual development plans, make training more exciting for employees, allowing them to achieve greater benefits from training and better retention of information.

The Importance of Workplace Diversity

In the General Mills Code of Conduct, they state that they value diversity in the workplace because it brings new viewpoints to the table. When looking at the number of awards General Mills has won, many of them mirror the company’s commitment to diversity, as General Mills has become a preferred employer by a number of diverse groups. A diverse workplace can also allow for greater understanding of consumer wants from the company, allowing General Mills to create and develop new products that meet the changing needs of their consumers. The corporate culture at General Mills is one of respect and inclusion, creating a mutual respect between employees at all levels.

In the article “Up Close with Mike Davis: General Mills’ Playbook for Challenges in Unprecedented Times”, Mike Davis, Senior Vice President of Global HR at General Mills stated:

“This year alone, I have been to India, China, and Europe. I have found that in spite of all the cross-cultural differences, all human beings like to be valued, be listened to, be developed, and feel like they make a difference. All of these commonalities are part of the cultural core of General Mills. Even our long-term view of career development works well cross-culturally, as employees everywhere appreciate an organization that values them.”

The observation and contact between global employees and top level executives further demonstrate the commitment General Mills places on workplace diversity. Through observation, discussion and travel, the global HR team at General Mills is able to gain a stronger understanding of what their employees seek in an employer, as well as measure their satisfaction with their roles at General Mills. Understanding the common traits across geographical divisions of the company makes it easier to develop unified plans and policies, as well as deepen the corporate culture and commitment to common goals.