As issues of compliance and ethics become a focal point of businesses and policy development, business leaders from around the world are focused solutions that help mitigate the risks associated with global business.
Here are six of their top concerns.
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.