Compliance and Ethics Program - Effective Program Implementation

Effective Program Implementation

Implementation is often the most difficult aspect of any program. This is the juncture where most failure occurs. However, if executed well, it can represent the biggest opportunity for positive influence on the organization’s performance and culture.

The engaged involvement of key stakeholders is critical to a successful implementation or major enhancement of a compliance and ethics program, i.e. the dialogue and agreement up front, by all the major parties, regarding the objectives, goals, and overall purpose of the program will be critical to the project’s eventual impact. By working together, compliance and ethics officers, executive management, and the board can help ensure a compliance and ethics program not only contributes to the improvement of the organization’s governance practices but the success of its company’s strategy as well.

Integrate compliance and ethics - Address the “letter of the law” while promoting the “spirit of the law”. For some companies this means making a breach of company policy as serious as breaching laws, resulting in “internal” standards being as important as ‘mandatory’ standards.

Embed compliance and ethics risk management processes into the business - Organizations must systematically assess and prioritize present and emerging compliance and ethics risks. Such analysis should take into account the organization’s culture, compliance and ethics history, as well as industry issues. Business processes should incorporate compliance and ethics program needs. Boards should routinely discuss these risks, and how they are addressed, with management.

Demonstrate leadership - The board should ensure senior management consistently communicates and models the organization’s values and behavioral expectations identified in the compliance and ethics program.

Require accountability and ownership - In order to have the compliance and ethics program “make a difference”, it should foster a corporate culture that places responsibility on individuals for their actions and motivates everyone. The board and management should ensure employees have appropriate training and information and should participate in such training themselves.

Provide an open culture - Issues and problems should be, and in some cases are, required by law to be investigated and proactively managed to resolution. Unethical or illegal behavior should be addressed promptly. Employees must be required to raise and resolve violations of compliance or ethics standards. To do so, they must feel confident that they can take action without fear of retaliation. Such fears have been reduced, but not eliminated, with the introduction of the “whistleblower” protections of the Sarbanes-Oxley Act and the Canadian equivalents. The board should inquire of management the steps they are taking to create this open culture.

Measure performance and results - Compliance and ethics processes and results should be monitored and measured. Objective data should support evaluations that are more subjective. Evaluation results should provide the basis for continually improving the program.