Best Practices for Business Ethics and Compliance

It's important to showcase companies that respond to wrongdoing well — dare we say successfully. It creates a roadmap other companies can follow, and is helpful (even critical) to all C&E/risk professionals who must make the case for compliance resources and influence leadership to make good decisions with investigations and remediation. Kyle Brasseur, EIC at Compliance Week, provides helpful examples for practitioners in his year-end roundup of 5 companies: ➡️ Discover Financial Services, whose CFO publicly admitted that the company had "historically underinvested" in compliance resources and was "paying the price right now," after an FDIC investor lawsuit and consent order. ➡️ Albemarle Corporation, who earned the highest ever reduction in FCPA enforcement penalties — 45% — due to their cooperation and significant remediation, which included 11 terminations, 16 bonus clawbacks, extensive training, and incorporating data analytics into its anti-corruption program. ➡️ Lifecore Biomedical, who proactively handled their self-reporting of FCPA violations to the U.S. Department of Justice so promptly (within three months of initial discovery and hours of conclusion of their internal investigation) and thoroughly (disgorged $406K in profit attributed to the bribery) that they received a declination of prosecution. ➡️ Construction Specialties, who rectified retaliation against an internal whistleblower by one of its affiliates — restoring their job and later, promoting them (the whistleblower's report had saved the company a base penalty of approx. $1.1M with OFAC). ➡️ Perella Weinberg, whose self-reporting to the SEC regarding violations of off-channel communications for conducting business, along with its proactive remediation plan, resulted in the lowest SEC fine to date for this type of misconduct, $2.5M. 👉🏼 Read the full article here: https://lnkd.in/guSkbxsz #management #business #compliance #ethics #culture Kaplan & Walker LLP Megan Reitz Amy Edmondson Ron Carucci Richard Bistrong Rebecca Walker Jeff Kaplan Joe Murphy, CCEP Andrea Bonime-Blanc, JD/PhD Nick Gallo Kristy Grant-Hart Mary Shirley Kim Yapchai Melanie Sponholz, MSPT, CCEP, CHC, CHPC Gitanjali Sakhuja Gautam Ganglani Diana Wu David Chris Moon Michael J. Gelb Rita McGrath

Of all the charts I've presented to boards and business executives over the years (and there have been many), THIS is one of my favorites. It helps to make the case that senior leaders have a powerful influence on culture and conduct throughout their organizations. This chart shows data collected through Ethics & Compliance Initiative (ECI)'s Global Business Ethics Survey, but a similar pattern generally appears when charting employee survey data from an individual organization. Leaders’ commitment to integrity, as ECI defined it in this study, is a rollup of a series of measures; among them are employees' perceptions of top management's communications, the behavior they model to others, the extent to which they encourage employees to raise concerns, and whether they are perceived as holding people accountable to the values and standards of their organization. I don't know any organizations that aren't interested in reducing the pressure employees feel that they must break the rules to get the job done. Most businesses also want to reduce misconduct and increase reporting when things go wrong. And retaliation? This chart shows a 76% difference in the percentage of people who said that they experienced retribution for raising suspected violations to someone in their organization. That's remarkable. Importantly, this chart shows correlations between employees' perceptions of leaders and conduct in the organization; it's not making a case for causation. And focusing on the words and deeds of top management is not the sole solution to all ethics and compliance challenges. But if an organization wants to establish a strong ethical culture where employees raise concerns, or reduce its risk of noncompliance, it is clear that the personal commitment of senior leaders to integrity is paramount. This post contains an image of a PPT slide. If it would help you in your work to have the actual slide, let me know…I’m happy to share! #ethicalleadership #toneatthetop #businessintegrity

Throughout my career, I have had the pleasure of working with some of the most amazing mentors and leaders in business. What sets them apart from all others is their ability to be honest with each others perspectives and doing what they say. You may be laughing; but you would be surprised by the number of companies that stretch the facts. Being honest in business is crucial for several reasons: 1. **Trust Building**: Honesty fosters trust between businesses and their stakeholders, including customers, employees, partners, and investors. Trust is the foundation of long-term relationships and loyalty. 2. **Reputation Management**: An honest business is likely to build a strong, positive reputation, which can attract more customers and create goodwill. A damaged reputation due to dishonesty can lead to loss of customers and revenue. 3. **Legal and Ethical Compliance**: Honest practices help businesses comply with laws and regulations, reducing the risk of legal penalties and fines. Ethical behavior is also important for maintaining integrity and avoiding a bad reputation. 4. **Employee Morale and Retention**: A culture of honesty promotes a positive work environment. Employees are more likely to feel valued and respected, leading to higher morale, job satisfaction, and retention. 5. **Decision Making**: Honest communication ensures that decisions are based on accurate information. This leads to better business strategies and outcomes. 6. **Customer Loyalty**: Customers are more likely to remain loyal to a business they perceive as honest and transparent. This loyalty translates into repeat business and positive referrals. 7. **Conflict Resolution**: Honesty brings clear and effective communication, making it easier to resolve conflicts and misunderstandings quickly and fairly. In summary, if you can remember this: “honesty in business is essential for building trust, maintaining a good reputation, ensuring compliance, boosting employee morale, making informed decisions, retaining customers, and resolving conflicts efficiently.” It’s not the same as trying to make everyone happy. 😃

Leveraging Leadership At All Levels In An Organization’s Ethics & Compliance Program One of the most effective ways to support an effective ethics and compliance program is to engage leadership at all levels in an organization. Leaders, managers and supervisors have to ability and voices that will determine for the rest of the organization what matters, what is a priority and what isn’t. While the impact of leadership engagement and alignment with the compliance program can have a huge impact, the time and effort required by leaders to make this difference is minimal. Here are six easy ways leaders can make a difference to their teams and broader organization: 1. Use your voice by regularly talking about the importance and relevance of ethics and integrity with your team and any new hires. 2. Provide feedback both when employees exceed and when they fall below expectations when it comes to integrity. 3. Promote the resources available to support employees (and where to find them), including the code of conduct and the various speak-up channels. 4. Be an example by demonstrating organizational values (including speaking up), as well as promptly completing requirements such as online training or certifications. 5. Proactively build trust with your team by sharing stories of the ethical dilemmas you have faced in your career and regularly asking them if they have any concerns or matters they would like to discuss or need guidance on. 6. Be genuine and confident in knowing which matters you can handle and which you need to engage other people to help with. Leadership engagement matters and makes a difference, and it also isn’t a complex or time consuming task. Need more tips on how to engage leaders in your organization - check out Chapter 11 in my book for more tips and practical advice. My #SundayMorningComplianceTip series will be taking a summer break for the month of July. More tips to follow in August. Reach out if you have a topic you would like me to cover in one of my tips. _____ Corporate Compliance Insights #SundayMorningComplianceTip #EthicsAndComplianceForHumans 📚 To read more of my #SundayMorningComplianceTips, connect with me on LinkedIn, visit CCI’s website and get your copy of Ethics & Compliance For Humans (available in print and kindle format on Amazon and various other online book stores)

💡 Insightful conversation with Penny Kozakos, Alison DaSilva & Paul Holmes on how companies should navigate stakeholder expectations in light of social & political activism. Thankul to work with smart people. 👀 My take below: 1️⃣ Issue Preparedness Companies must be better prepared before engaging in social or political issues. This includes having formal processes to evaluate potential backlash and the impact of their actions on their reputation and stakeholder relationships. 2️⃣ Core Value Alignment Companies must ensure that their engagement in societal issues aligns with their core values, mission, and business relevance. This alignment helps maintain authenticity and consistency. 3️⃣ Navigating Regional Differences Multinational brands must understand and respect geographic and cultural differences in stakeholder expectations. Tailoring responses to fit local contexts can prevent conflicts and be more impactful. 4️⃣ Use Data & Analytics Leveraging data and analytics is critical to guide corporate decision-making. Narrative intelligence can help brands anticipate issues, tailor personalized responses, and see around corners. 5️⃣ Balancing Risk & Reward Companies must learn to balance the risks and rewards of engaging in social issues. This involves careful consideration of potential backlash versus the benefits of being seen as a proactive, socially responsible brand. 6️⃣ Strategic Business Imperative Social responsibility should be viewed as a moral obligation and a strategic business imperative. Effective engagement in social issues can enhance a company's competitive advantage, employee satisfaction, and customer loyalty. 7️⃣ Dynamic and Ongoing Evaluation The corporate approach to social issues should be dynamic, involving ongoing evaluation and adaptation to changing circumstances and stakeholder expectations. This agility helps companies stay relevant and effective in their social engagements. Full video discussion below 👇🏼 https://lnkd.in/eG4uTPUC ~~~~~~~~~~~~~ #brandmanagement ‣ #brandreputation ‣ #dataanalytics ‣ #corporateresponsibility ‣ #crisimanagement ‣ PRovoke Media

Compliance programs have come far over the last few decades, but there is still more that they could do to elevate their performance. In this podcast, Alison Taylor, Clinical Associate Professor at NYU Stern School of Business and author of the book Higher Ground shares some intriguing and provocative ideas for improvement. She is a strong believer in what she calls “firm foundations”. These foundations avoid having too many rules which can, inadvertently, have a negative impact, causing employees to abdicate responsibility for their action and grow overly reliant on following rules. Instead, she argues for simplifying and being attuned to human behavior and the role of incentives. Be wary too, she advises, of mixed messages and potentially pernicious effects when it appears, whether true or not, that the rules for the rank and file do not apply to leadership. It degrades trust and the culture. To get more employees to speak up when they see wrongdoing, she advises investing the time in understanding why they don’t raise their hands more. When it comes to measuring the impact of the compliance program, she is a strong proponent of measuring the ethical culture. Do employees feel safe speaking up? Whom do they speak to when there is a problem? Do they believe the whistleblower line is truly anonymous? Is leadership looking out for them? The answers to these questions, and how they change over time, can illuminate how well the program is working. Listen in to gain more insights, including how to build a common ethical foundation and the importance of adequate authority for the compliance and ethics program. https://lnkd.in/g6CNJtnc

While the foundation of any business partnership is trust and shared values, ensuring compliance with both external regulations and internal policies cannot be underplayed. Whether it’s Sarbanes-Oxley, GDPR, HIPAA, or the new Corporate Transparency Act, navigating the complexities of compliance is essential not just to avoid penalties, but to safeguard the future of your business partnership. Compliance isn't merely about adhering to legal requirements; it's about demonstrating commitment to operating ethically and responsibly. This commitment is crucial for protecting your operations, reputation, and ultimately, your business partnerships. Additionally, internal compliance measures such as financial policies, social media guidelines, and conflict of interest policies are integral in mitigating risks and building trust. Effective compliance is not a one-time task but an ongoing process that demands rigorous systems for continuous monitoring. A solid compliance program ensures operational consistency, supports your company's values, and strengthens partnerships. In my latest Forbes article, I highlight the importance of due diligence and the mutual sharing of compliance practices with your partners to foster a culture of transparency and integrity. Read more below. #Compliance #Partnerships #Ethical