Ethics and compliance professionals are the ultimate multitaskers in the corporate world. Their responsibilities can, and should, span policies; procedures; training; advice; communications; investigations; promoting ethical behavior; ensuring organizational justice; encouraging employees to speak up; and preventing retaliation, among others.
Given this expanding role, and the extra pressure on E&C programs from the U.S. Justice Department’s recent guidance on ensuring programs produce real results, it’s helpful to isolate where and when programs are effective.
LRN's Susan Divers, and Jonathan Drimmer, a partner at law firm Paul Hastings LLP, pinpoint five priority action areas in a white paper, “Maximizing the Impact of Your Ethics & Compliance Program: What Works Best,” published by the Society of Corporate Governance.
It lays out the following as criteria for truly successful E&C programs, and for companies to set high standards for behavior and conduct:
- Managers practice what they preach. If employees see their managers modeling behaviors and following the rules, employees likely will do the same. The converse is true, too: If a manger behaves unethically, that legitimizes misconduct within their teams. The bottom line for E&C programs is they’re only effective when their messages are evident in the actions of the company and its managers, at all levels.
- Organizational justice. When employees view the company as “fair” in allocating both rewards and sanctions, it means there’s a foundation for an ethical company culture. Studies show employee perceptions of overall workplace fairness correlate with misconduct; the less employees perceive fairness, the more misconduct occurs.
- Speak up and listen up. The more employees are inclined to speak up, the more managers practice what they preach, and the more likely the organization is to be fair, research shows. Where there’s significant fear of retaliation and discomfort with speaking up, misconduct is more frequent.
- E&C leaders work with company leaders to simplify and “operationalize” E&C policies and codes of conduct. Figuring out how to turn laws and rules into policies and procedures that help everyone comply is no mean feat. Many company policy guides constitute a “kitchen sink” filled with every conceivable legal requirement and caveat. People are likely to follow policies and procedures when they are simple, straightforward, understandable.
- The E&C program should be “localized,” but the values must be global, consistent throughout the organization. The more a program is tailored to the local jurisdiction where it operates, and its nuances, the more effective it can be. At the same time, E&C leaders must stay focused on and be uncompromising about fundamental values, such as integrity, respect and transparency.
Too many E&C programs focus mainly on rules and checklists–the skeleton that outlines the program's structural components. When they shift focus to elevating behavior, implementing organizational justice, and developing a speak-up environment, they help to establish and enhance an ethical culture, which is really the heart of every company with an effective E&C program.