Tone at the top. We've all heard of it by now. (If you haven't, check out this short video to catch up.) And we pretty much universally accept that executive involvement is critical to creating a healthy, vibrant culture for any business.
In fact, the Association of Certified Fraud Examiners (ACFE), the U.S. Department of Justice (DOJ), the U.S. Securities Exchange Commission (SEC), and the Organization for Economic Co-operation and Development (OECD) all cite tone at the top as a primary ingredient for creating an ethical corporate atmosphere.
Is your compliance program struggling? Read: Why Do Employees Make Unethical Decisions?
But while we recognize the value that executive-driven compliance can offer, businesses far too often fail to establish a clear compliance leader within the organization or neglect to provide sufficient authority or resources to effectively support compliance efforts.
In a 2016 survey of worldwide compliance, audit, risk, and ethics officers, Deloitte found that 21 percent of businesses did not have a dedicated compliance leader, and among businesses with less than $1 billion in revenue that figure jumped to 30 percent. In addition, less than half of these surveyed companies -- 43 percent of respondents — provided their chief compliance officer (CCO) or equivalent with regular access to the executive board.
Obviously, if your business doesn't have a defined CCO or an executive-driven compliance program, that's a great place to start. But assuming your company has crossed that bridge on the journey to creating an ethical culture, what else can your business and your CCO do?
For a culture of compliance to thrive within your organization, every employee needs to be acutely aware of their personal responsibility in creating a safe, ethical, and inviting workplace. Not only does your business need to thoroughly document what is and is not appropriate behavior in a corporate code of conduct, but the expectations of this code (as well as the consequences of violating it) need to be communicated to your workers on a regular basis.
Business ethics, and its impact on day-to-day activities, should be a reoccurring topic in your staff meetings and planning sessions. Provide employees with ongoing compliance training, particularly with a focus on empowering them with the knowledge and tools to identify and root out potential corruption or other unethical behavior. Restructure your employee review and hiring process, incorporating compliance and ethical behavior into your decisions.
In all honesty, these efforts may sound a bit repetitive, but when your employees are inundated with the message that ethical behavior is a priority for your business, they are much less likely to even bend the rules, let alone break them.
No one likes to be told "no," and if compliance becomes synonymous with what "can't" be done at your company, you're going to have problems. Managers and employees will actively look for ways to bypass working with your compliance team to avoid having their new program or process shut down before it can even begin. And as this attitude takes root, corruption will have ample opportunity to bloom.
Instead, when discussing issues or problems with new processes or strategies, rather than simply saying "no," offer alternatives and focus on what can be done. Better yet, bring the compliance team into planning discussions from the start. When compliance is viewed as an integrated part of the development process rather than a potential roadblock, your business will be able to more easily develop and maintain a healthy corporate culture.
According to the previously mentioned Deloitte study, only 30 percent of the surveyed compliance experts stated that they were using available technologies to manage compliance efforts. Conversely, 50 percent stated that they were not, and 20 percent didn't know if they were.
This low technology use is particularly troubling since according to research conducted by the Association of Certified Fraud Examiners (ACFE), fraud that was detected through active surveillance methods (e.g., data analytics, account reconciliation) reflected a lower median loss and shorter duration than fraud identified through passive methods (e.g., accidental discovery, notification by police).
Fostering a healthy corporate culture is an ongoing process, and your business will only succeed in this effort if you dedicate the time and resources necessary to build an effective compliance program. When everyone in your company -- from the executive board to front-line staff -- realizes their personal responsibility in maintaining corporate standards and is empowered to identify and root out corruption, your business will much more easily avoid critical ethics lapses.
To learn how we can help your CCO and your business develop an effective, well-rounded compliance training program, check out a demo of our courses today.
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