The role of a Code of Conduct has shifted dramatically over the past 20 years, evolving from rigid rulebooks to flexible, values-driven frameworks that reflect a company's ethical culture. However, recent data suggests that while innovations in compliance programs are accelerating, employee engagement with these modernized codes remains a challenge. LRN’s 2024 Code of Conduct report sheds new light on this gap, revealing how employees actually engage with these codes and highlighting critical trends, particularly in the Asia-Pacific (APAC) region.
In a recent LRN-International Compliance Association (ICA) webinar, senior compliance professionals, including Tim Tyler (ICA), Jim Walton (LRN), and Subramaniam Natarajan (Otis APAC), gathered to discuss these findings and offer insights into how organizations can strengthen their Codes of Conduct to enhance workplace ethics.
The surprising preference for PDF and tangible formats
One of the most unexpected findings from the 2024 Report is that employees continue to prefer traditional formats for their Codes of Conduct. While many companies have adopted interactive, web-based codes, 1.7 times more employees expressed a preference for PDF formats, which have been a staple for decades. Only 27% of employees said they preferred a web-based code, and just 10% were interested in newer technologies like chatbots.
During the webinar, Subramaniam Natarajan noted that while this finding was surprising, it underscores the importance of simplicity and ease of access. "While the trend may be moving toward digital platforms, employees still value something tangible, something they can reference quickly," he said. Natarajan also pointed out that an online system with data analytics capabilities could provide insights into which parts of the code employees reference most, enabling companies to tailor future training.
Regional and generational differences in code engagement
The report also highlighted striking differences in how employees across regions and generations engage with their Codes of Conduct. APAC countries like India, China, and Australia had the highest reported use of codes as a resource, with over 60% of employees in these regions regularly referencing their company’s ethical guidelines. By contrast, European countries showed much lower engagement, with only around 10% of employees in some regions using their codes regularly.
Generational gaps also emerged, with Millennials and Gen Z employees more likely to use the code as a resource compared to older generational cohorts. However, there’s a paradox: while younger employees are consulting their company’s code more often, they are also more likely to "bend the rules" to achieve their objectives, suggesting that deeper engagement doesn’t always translate to stricter adherence.
The critical role of managers in ethical communication
One of the most actionable takeaways from the webinar was the role of managers in embedding ethical behavior into daily operations. Employees often turn to their direct managers for guidance on ethical dilemmas, making it crucial for middle management to be actively involved in communicating and reinforcing the Code of Conduct.
Natarajan emphasized the importance of “tone from the middle,” suggesting that while tone from the top is essential, it’s the daily interactions with managers that shape employees' ethical behavior. Practical steps like referencing the code during performance reviews and ensuring managers lead by example can have a profound impact on how the code is perceived and practiced within teams.
The impact of hybrid work on ethical engagement
Another key finding from the report is the impact of hybrid work models on Code of Conduct engagement. Surprisingly, hybrid workers—those who split their time between working remotely and in the office—reported the highest levels of code engagement, with 67% of hybrid employees stating they use their company’s code as a resource. In comparison, only 60% of fully in-office employees and 50% of fully remote employees reported the same.
This trend suggests that hybrid workers may feel more trusted by their employers, which could enhance their commitment to upholding company values. As Jim Walton explained, the flexibility of hybrid work appears to foster a stronger connection to the organization’s ethical framework, possibly because these employees benefit from both in-person interactions and the autonomy of remote work.
Leveraging AI and innovation in compliance training
The webinar also explored how innovations like artificial intelligence (AI) can enhance compliance programs. AI’s ability to detect patterns of misconduct, streamline document analysis, and provide dynamic Q&A features in digital Codes of Conduct offers promising solutions for the future. By using AI, companies can gain real-time insights into which sections of the code are most frequently accessed and where additional training might be needed.
Gamification of compliance training, another innovative approach, was discussed as a way to make learning more engaging, particularly for younger employees. Training programs that incorporate ethical dilemmas and allow employees to "score points" based on their decisions can make compliance training feel more interactive and relevant.
Conclusion: Strengthening ethical culture in APAC
The 2024 Code of Conduct report and the insights shared during the LRN-ICA webinar highlight both the progress and challenges organizations face in fostering ethical workplace cultures. The data suggests that while innovation is crucial, companies must also ensure that employees have access to Codes of Conduct in formats that work for them. Additionally, involving managers in ethical communication, tailoring programs for different generations, and leveraging AI can significantly enhance how employees engage with and adhere to their company's ethical guidelines.
For organizations looking to stay ahead of these trends, the key is continuous improvement—building on the foundations of strong ethical culture by remaining responsive to employee needs and the evolving landscape of compliance risks.
To learn more, download LRN’s 2024 Code of Conduct report or access the on-demand version of this webinar.
