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How Ethics Leads to a Secure Workplace

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.

Posted by Joe Gerard on July 13th, 2010

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

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.
Many of the new anti-corruption and anti-bribery legislations introduced, such as the UK Bribery Act and the FCPA in the United States, include clauses stating that an employer will not be held liable for offenses committed by an employee so long as the employer can prove that adequate measures have been established for preventing illegal acts. According to an Ethisphere interview, “The Road to a Model Ethics and Compliance Program,” with Sven Erik Holmes, Executive Vice Chair, Legal and Compliance, KPMG LLP states:

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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 a study by Deloitte:

“One aspect that can really make a difference in the success of the whistleblower mechanism is demonstration of senior leadership commitment by ‘walking the talk’ when it comes to handling of complaints through such a mechanism.”

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. In an older Ethisphere article titled “Expert Corner: Auditing an Ethics and Compliance Program,” Dan Swanson and Jose Tabeuna provided 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.

Joe Gerard
Joe Gerard

CEO, i-Sight

Spend my days showing off the i-Sight investigative case management software and finding ways to help clients improve their investigations. Usually working with corporate security, HR & employee relations, compliance and legal teams.

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