How to turbo charge your ethics and compliance program

It’s the stuff of compliance nightmares.

Stuff of nightmares C&EEver more demands for resources to counter the fear that something unexpected, such as the VW disaster “might happen here”.

From the Ethics and Compliance Initiative comes a useful discussion document.

It reveals how far even progressive programs are from being turbo charged—that is making a discernible difference to their companies.

Evidence continues to mount showing most compliance and ethics programs are mainly tick box affairs.

“Going through the motions” is perhaps a slightly unfair criticism of many good intentions, yet it is valid.

How to turn the E & C program into a powerful force for change seems beyond many firms. Too many see compliance as a chore, while “ethics remains an alien word “not used in our company.”

The Principles and Practices of High Quality Ethics and Compliance Programs is a commendably brief, thought provoking paper.

Packed full of practical advice, it describes what creating a turbo-charged process involves. So far, this remains only a consultation document and there is scope to refine it further and your suggestions are actively invited.

What is compliance based on?

In America at least, what is meant by an effective program largely rests on guidelines from the US Sentencing Commission.

But these are minimum standards. The essence of this new document is the one advocated here at www.ethical-leadership since our launch in 2013.–see for example:; and .

Namely, that what most companies should aim for is: “Beyond Compliance”. As the latest report puts it:

“Organisations who merely follow the minimum standard can and should do more”

The minimum standards followed in both the US and the UK have originally stemmed from regulatory or judicial responses to increasing evidence of compliance and ethical lapses.

But they do at least provide a starting framework to evaluate company cultures and current procedures to catch wrongdoing. But they are not a reliable guide for practical action.

In contrast, the new discussion document presents in admirably detailed action lists of what’s needed to turbo-charge an E&C program. Many though may baulk at the real life implications for action.

For example, there is the need to reconcile being compliant with the equally important demand to create an ethical culture. This is a difficult balance every company and leader must arrive at for themselves.

Do it now forcesForces pushing leaders to find this balance include:

  • A more intense regulatory environment
  • Ever stronger global standards
  • Rapidly expanding public scrutiny of business behaviour
  • Increased awareness of importance and costs of protecting reputation
  • Rising costs of misconduct with enforcement fines—increased by a factor of five in just two years.

Concerning the rising costs, research shows large indirect costs from misconduct. These are often discounted or not taken into account in company risk assessments.

They include employee turnover, lost productivity, external legal and consultant fees, decreased share price and reputational harm.


Raising the bar

The report explains what it means to raise the bar for ethics and compliance programs. There are essential actions which every company can take to create a high quality program. These “apply in any setting, large or small, highly regulated or not.”

To raise the bar means not being satisfied with a mere “check the box” effort. The five principles of a high quality programs are:

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Even at its most basic level, making these things happen is not easy. But it pays off and the report concludes:

“…when leaders in an organisation recognise and adopt a broader and deeper view of their E&C effort and invest accordingly, they see effective and transformative results.”

Report from ECI initiative at:

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