Ethics & compliance

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Building world-class ethics and compliance programs

Five ingredients for your program

What has become abundantly clear is that when it comes to creating ethics and compliance programs, organizations today cannot afford to settle. “Good enough" simply isn’t good enough. Rather, organizations should continuously strive for great. Our report on building world-class ethics and compliance programs looks at how to achieve this.

After a number of well-publicized financial scandals and the tech- and housing bubble, ethics and compliance functions found themselves front and center. In addition to this, the stunning growth of social media and big data has ushered in a new era of transparency and raising profound ethical questions about the way new business is conducted.

What has since become abundantly clear is that when it comes to creating ethics and compliance programs, organizations today cannot afford to settle. But what separates a “good” ethics and compliance program from a “great” one? How does an organization’s investment in compliance and reputation risk mitigation systems and processes measure up against leading practices?

These and more questions were explored in a series of articles about the ingredients of a world-class ethics and compliance program. All of these articles have since been combined in a compendium to allow for easier reading and reference.


What are the ingredients of a great ethics and compliance program?

While there are a number of factors that separate the good from the great, there are five factors that are key differentiators in the highest-performing ethics and compliance programs.

 
Tone at the top

The starting point for any world-class ethics and compliance program is the board and senior management, and the sense of responsibility they share to protect the shareholders’ reputational and financial assets. The board and senior management should do more than pay “lip service” to ethics and compliance. They need to empower and properly resource the individuals who have day-to-day responsibilities to mitigate risks and build organizational trust.

 
Corporate culture

A culture of integrity is central to any effective ethics and compliance program. Initiatives that do not clearly contribute to a culture of ethical and compliant behavior may be viewed as perfunctory functions instilling controls that are impediments to driving the “value change” of the enterprise.

 
Risk assessments

Ethics and compliance risk assessments are not just about process—they are also about understanding the risks that an organization faces. The risk assessment focuses the board and senior management on those risks that are most significant within the organization, and provides the basis for determining the actions necessary to avoid, mitigate, or remediate those risks.

 
The Chief Compliance Officer (CCO)

The CCO has day-to-day responsibility for overseeing the management of compliance and reputational risks, and is the agent for the board’s fiduciary obligations in this regard. A skilled CCO can create a competitive edge for their organization.

 
Testing and monitoring

A robust testing and monitoring program can help ensure that the control environment
is effective. The process begins with implementing appropriate controls, which should be tested and ultimately monitored and audited on a regular basis.


More information

Would you like to know more about how to create a great ethics and compliance program? Find more information on the above mentioned elements in our compendium on this topic.

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