While 82% of ethics and compliance leaders surveyed say ethical culture is better, several areas of opportunity for E&C have emerged.
NEW YORK (Feb. 1, 2022) – Entering the third year of a pandemic, more business professionals responsible for ethics and compliance worldwide say that their ethical culture is more potent as a result of the COVID-19 pandemic, according to the latest annual Ethics and Compliance Program Effectiveness Report from LRN.
But, while values and ethics helped sustain companies during the pandemic, new areas of concern have emerged. And, there is a significant gap between companies with high-impact ethics and compliance (E&C) programs and those with low-impact ones. The top-ranked programs were proactive, utilized available resources, and made their programs more accessible to employees High performing organizations also scored 27 percentage points higher than low-performing ones when it came to weathering COVID.
The report, titled “The 2022 Ethics & Compliance Program Effectiveness Report: Rising to the Challenges of the New Normal,” comes from a survey of nearly 1,200 ethics, compliance, and legal executives, and other professionals at companies from around the world. Most of the participants are from organizations with more than 1,000 employees. The annual report provides a benchmark to evaluate E&C programs.
Here are some of the key takeaways:
- 82% of the executives and experts we surveyed reported that their ethical culture is stronger as a result of their experience with coping with the COVID-19 crisis.
- 78% of respondents reported that their firms relied upon company values rather than rules and procedures to weather the COVID crisis.
- 83% reported that ethics and compliance considerations played an important role in shaping their organization’s response to COVID-19.
- 66% of respondents said senior leaders integrated ethics and compliance considerations into their decision-making during the crisis.
- 64% reported their executive leadership communicated candidly about challenges facing the organization.
- High-ranking E&C programs had nearly three times more engagement from the board of directors in supporting ethics and compliance.
Several areas of weakness or opportunity emerged during the pandemic for E&C programs:
- Only 40% indicated their E&C team, in the face of the pandemic, strengthened risk controls in critical areas such as cybersecurity, privacy, and donations of critical equipment or third-party compliance (that’s down 5 percentage points from last year).
- Only 35% reported their firms simplified or modified compliance procedures to meet the new challenges (also down 5 percentage points from last year).
- Just 25% reported their organizations are using mobile devices to deliver E&C training.
“The insights in this new report offer important benchmarks organizations can use as they evaluate and enhance their own E&C programs and meet the ongoing COVID challenge,” said LRN senior advisor Susan Divers, JD, a former chief ethics and compliance officer for several Fortune 500 firms. “This year’s report also answers critical questions posed by government regulators. The expectation is that an organization’s ethics and compliance program works in practice—not just on paper.”
This 2022 report comes on the heels of a two-part publication for the 2021 Ethics & Compliance Program Effectiveness Report. Part one, Meeting the COVID-19 Challenge and a part two, Leading the Way: How Boards of Directors Can Engage in Ethics and Compliance, helped to set the baseline for E&C program effectiveness at the outset of the pandemic and the impact boards have on shaping direction.
The report methodology differs from most surveys of E&C programs, as the majority focus on measuring activities rather than impact and ethical culture.
“Five years ago, we took a radical approach and started asking about ethical culture to measure E&C programs,” Divers added. “It allows us to not simply look at ethics and compliance as a box to check, but a system of values interwoven into the DNA of an organization.”
“The 2022 Ethics & Compliance Program Effectiveness Report: Rising to the Challenge of the New Normal” survey was conducted during the second half of 2021 with respondents representing 21 countries and 22 fields. The report can be viewed in full here.
About LRN
LRN's mission and purpose is to inspire principled performance and help people around the world do the right thing. Since 1994, LRN has worked to propel organizations forward with the partnership, knowledge, and tools to build ethical culture. More than 1,000 companies and 30 million learners worldwide utilize LRN services and take LRN e-learning courses to help navigate complex regulatory environments and foster ethical, responsible, and inclusive cultures. In partnership with LRN, companies translate their values into concrete corporate practices and leadership behaviors that create sustainable competitive advantage. By acting upon shared values, companies and their people find the means to outbehave and outperform. Learn more at https://lrn.com and follow on Twitter, LinkedIn, and Facebook.
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