Singapore organisations outpace their global peers in areas including ethical governance, employee experience enhancement, and proactive responses to global risks, setting new benchmarks for corporate excellence
SINGAPORE (February 14, 2024) – LRN Corporation, the leader in ethics and compliance solutions that inspire principled performance, has published its 10th Annual Ethics & Compliance (E&C) Programme Effectiveness Report that provides insight into the foundations of ethical culture in organisations and highlights the critical differentiators that make some ethics & compliance (E&C) programmes more effective than others.
LRN’s Report found that organisations in Singapore compare favourably to global counterparts on ethics and compliance - amongst several key areas, they were found to be more effective at improving their E&C programmes and adopting new training methods, took action on ethical issues more frequently, hold values and compliance in higher regard during their decision-making processes in comparison to the global average.
Singapore's commitment to ethical governance, regulatory compliance, and continuous improvement
The Report found that 90% of organisations surveyed in Singapore reported making difficult decisions that were consistent with the organisation’s values in the past year — 20% higher than the global and APAC averages. Further underscoring their commitment to E&C, especially in critical business decisions, over two-thirds (72%) indicated that their boards have actively modified or abandoned business initiatives based on compliance factors - also 20% higher than the global and APAC averages. This could include walking away from business deals with customers or business partners with questionable ethical practices, demonstrating a commitment to ethical considerations when making business decisions.
Singapore organisations significantly outperform global and APAC programmes in the implementation of incentives and disincentives for ethical behaviour - factoring these considerations into measuring management performance (87% for Singapore; 79% globally), hiring (82% for Singapore; 72% globally), promotion (79% for Singapore; 67% globally), and bonus awards (73% for Singapore; 60% globally). 75% reported that they factored ethical behaviour into their promotion and bonus consideration, and 60% terminated or disciplined an executive or high-performing employee over unethical behaviour in the past year; the global and APAC averages stand at only 40%.
As the world becomes more complex with increasing business risks, respondents from Singapore respond more dynamically to changes than global and APAC peers around addressing risk controls, analysing regulatory requirements, and focusing on risks posed by overseas operations. While E&C programmes continued to cover standard issues like bribery and corruption, Singapore organisations have reported placing more emphasis on addressing risk controls in topical areas such as sanctions and trade controls (60%) and supply chain risks (43%), analysing regulatory requirements (43%), risks posed by overseas operations (52%), and supply chain risks (43%) compared to global and APAC peers.
Areas for Improvement in Singaporean Organisations
Even as many continuously seek to improve their E&C programmes, Singapore organisations still face several challenges in doing so. These challenges include the need to upgrade internal systems for better training (81%), the integration of compliance after merger & acquisition activity (75%), addressing staff shortages for compliance (73%), budget constraints (69%), and increasingly complex regulations (70%).
The Report identified a gap between senior and executive managers and middle managers with regard to E&C. Only roughly one-third (34%) have reported taking on difficult decisions based on company values and purpose as compared to 90% of senior and executive managers who have done so. Middle managers also lag behind in identifying E&C risks and challenges, integrating E&C into decision-making, and ensuring that high performers are held accountable for misconduct.
Key standouts of high-performing E&C programmes
In Singapore, high-performing E&C programmes show significant differences when compared to low-impact ones. The Report identified that 100% of high-performing programmes in Singapore report that the compliance function has resources comparable to other key risk functions, whereas less-effective programmes report parity only 77% of the time. High-performing programmes are also 1.2 times more likely to have the resources, authority, and reach to effectively mitigate risk and raise concerns directly to their board, with the former 2 times more likely to report to the chief executive officer of their organisations.
Apart from resources, continuous improvement is a hallmark of a better-performing E&C programme. In Singapore, high-performing programmes update their codes based on lessons learned from investigations at a rate nearly 30% greater than less effective programmes. Additionally, 98% of high-performing programmes report making changes to their E&C programmes to adapt to remote and hybrid working environments — twice more than less-effective programmes that report the same (50%).
This Report from LRN marks the 10th anniversary of the landmark report and is based on a survey of more than 1,400 E&C professionals at companies and organisations in 19 different countries and 26 industries across North America, Europe, and Asia-Pacific, including 112 companies in Singapore.
Other notable findings from this year’s Report include:
- Singapore organisations adopt new training tools and techniques, such as “test out” quizzes and links embedded within a course, up to 33% more frequently than their global and APAC peers.
- High-performing programmes in Singapore were 5 to 7 times more likely to address topics like ESG and harassment with “a great deal of effort” than less effective programmes.
- Compared to poor-performing programmes, high-performing programmes have hotlines that are more encouraging of a speak-up culture as they are 1.4 times more likely to provide anonymous reporting, 1.5 times more likely to link to non-retaliation policies, and 1.2 times more likely to clearly explain how reports will be handled by their organisation.
“This year’s report shows that companies in Singapore are committed towards maintaining high E&C standards. They have taken action on ethical issues at a higher rate than worldwide peers and lead their global counterparts across several E&C metrics,” said Eric Morehead, Director, Advisory Service Solutions at LRN and lead author of the Singapore report. “With organisations in Singapore continuing to adapt to the emergence of artificial intelligence tools, hybrid working models, as well as an increasingly complex regulatory environment, it’s clearer than ever before that high-performing E&C programmes must focus on values, adapt to change, and emphasise personal accountability.”
“Businesses globally are facing numerous challenges from a regulatory and technological perspective, and it’s important that their E&C programmes anchor board members and employees alike to company values and missions,” added Kevin Michielsen, CEO of LRN. “Each year, the findings of the E&C Programme Effectiveness Report showcase a link between fostering ethical cultures and business performance. The more adaptable, organised and clearly communicated an E&C programme is, the more prepared a company is to face the everchanging industry and regulatory challenges that lie ahead.”
About LRN Corporation
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 organisations forward with the partnership, knowledge, and tools to build ethical culture. More than 2,800 companies and tens of millions of learners worldwide utilise 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 behaviours that create sustainable competitive advantage. By acting upon shared values, companies and their people find the means to outbehave and outperform. Learn more at LRN.com and follow on Twitter, LinkedIn, and Facebook.