a robust approach to E&C and reinforces its values. Another challenge is how to incorporate ethics into the workplace and operationalize E&C into decision- making. While most senior leaders are seen to be “walking the walk” in terms of dealing with compliance risks by making difficult decisions that are consistent with company values and purpose, it seems that middle managers are finding that much harder to do. In fact, the gap between middle management and leadership is widening when looking at ethical decision-making involving trade- offs, with this year’s data having the largest differential between the two since we have been tracking this topic. Given the enhanced focus on personal accountability and organizational risk, and the fact that middle managers are such visible role models to colleagues, this is clearly an area that needs to be addressed. Global standards are converging Organizations with a global footprint must ensure E&C programs are applied consistently and appropriately across all their operations and that their values and standards are shared in all their locations. That requires investment of time and resources. Many are taking steps to scale their E&C functions wherever they do business, for instance by setting up regional committees, creating ambassadors or appointing compliance officers in countries where they have a significant presence.
“Going forward, when prosecutors evaluate the strength of a company’s compliance program, they will consider whether its compensation systems reward compliance and impose financial sanctions on employees, executives, or directors whose direct or supervisory actions or omissions contributed to criminal conduct.”
— Deputy Attorney General Lisa Monaco
other E&C programs, which can often provide a global as well as industry-specific context for an organization’s program design. By measuring performance against peers around the world, they can learn lessons from others, build on areas where they are excelling and continuously improve. What we are seeing today is a return to basics on the one hand with the renewed attention on risk and plenty of innovation on the other, as evidenced by attitudes toward incentivizing good behavior and disciplining misconduct and seeking to reach workers where they are to maximize impact. Inspiring the right values, holding people to account and strengthening global standards are all powerful dynamics in the drive to enhance the effectiveness of E&C programs worldwide as we look ahead. Many organizations are in a good position, but there’s no time even for those high performers to rest on their laurels: Good E&C programs constantly have to keep moving with the times.
Interestingly, as the global risk landscape becomes increasingly interconnected, with geopolitical, regulatory, technological and other common challenges affecting companies in all geographies, a convergence in E&C best practices around the world is becoming noticeable. E&C leaders largely agree on what the fundamental components of an E&C program are, including the need for policies, a code of conduct, training, regular audits, a clear tone at the top and support from the board of directors. Regional differences in how these foundational elements are implemented exist, as is to be expected, but in the main, there are no alternative models of what E&C programs should look like and no divergent ideas around what they are designed to do. This degree of harmonization suggests that ethical culture is now more widely embraced and that standards across the board are leveling up. It’s notable that high-performing programs are nearly three times as likely to benchmark against
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