Ethics and Compliance Programs
Ethics and compliance programs have become an important tool for evaluating and mitigating noncompliance and fraud risks, to improve operations and protect company reputations.
- Compliance as a Trend
- The Culture of Ethical Conduct and Compliance
- Building an Ethics and Compliance Program
Compliance as a Trend
In a scenario of constant management changes and increased complexity of domestic and international risks and regulations, ethics and compliance programs are becoming increasingly dynamic, complex, strategic and flexible, without, however, failing to keep their essence or the acculturation of ethical conduct by employees, representatives and suppliers.
Deloitte combines actions to implement codes of conduct from compliance programs focused on regulatory and operational risks, implementation of a robust denunciation channel, development of policies and procedures, adoption of certificate-granting training programs, compliance tests focused on applicable risks, controls and regulations, work synergy with internal audit departments and risk management, client, supplier and employee due diligence, forensic activities and advanced data analysis by means of compliance analytics, as well as ethical conduct and compliance remediation plans.
In Brazil, Deloitte actions to develop a program of ethics and compliance are fully based on and adhere to the provisions of Law No. 12846/2013 (also known as the Anticorruption Law) and Decree 8420/15 that requires adoption of a range of internal mechanisms and procedures of integrity, auditing and incentives for reporting irregularities and for effective application of codes of ethics and conduct, in addition to policies and guidelines designed to detect and correct deviations, frauds, irregularities and illegal acts practiced against the public administration. In the international setting, the U.S. federal law against corruption, the Foreign Corrupt Practices Act (FCPA), and the British Bribery Act (UKBA) are relevant.
The Culture of Ethical Conduct and Compliance
An ethics and compliance program is a centralized and coordinated approach for several business units within an organization. It is a programmed approach, designed based on the vision of board and committee members, as well as operational managers, and focused on the specific risks faced by the organization.
Recent domestic and international trends indicate an increase in administrative and criminal suits, internal and external investigations, application of inspection penalties and media attention to compliance violations by companies in all economic segments.
Regulators around the world are expanding their operational reach beyond their jurisdictions while public prosecutors are becoming more involved in their investigations and application of penalties.
Consequently, it appears that regulators, inspectors, clients, employees, suppliers and the social surroundings of the company consider the “culture of ethical conduct and compliance” more important today than in the past.
Curbing noncompliant decisions and doing business in compliance in accordance with corporate ethics are currently the foundations of sustainability for companies in the world of business.
Structuring the Ethics and Compliance Program
An organization’s global ethics and compliance program can be based on a number of internationally-recognized guidelines, such as the U.S. Federal Sentencing Guideline or the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and encompasses both operational ethical compliance and risks of legal and regulatory compliance.
A diversified compliance approach considers:
- Addressing compliance for everyone;
- Addressing compliance for a particular industry;
- Addressing compliance for a specific geographical area;
- Addressing compliance focused on strategic or operational excellence.