Three Ethics & Compliance Program Insights You Can’t Afford to Miss


In the first half of this year, I interviewed and conducted focus groups with hundreds of line employees, professionals and managers on four continents and—regardless of country, culture or industry—three themes came up again and again. These themes go to the heart of establishing a truly effective ethics and compliance or business conduct program.

1) Nothing— Nothing—Communicates Values More Clearly than Actions

A company can have the most sophisticated ethics and compliance program and spend millions of dollars on it annually, but, in the end, what employees notice the most are the actions of their managers and senior leaders.  

If managers pressure their employees to bend—or even break—rules in order to “get the job done,” it won’t matter that the company has a best-practice code of conduct.  If finance directors employ extreme tactics to make quarterly results look robust, then employees will learn that “fudging” to achieve the “right” result is acceptable.  And, if high-performing employees or senior executives are caught breaking the rules but are not punished, the company’s “dedication” to ethical business conduct will be revealed as a sham. 

2) The Little Things Really Matter 

Employees have a more expansive view of business ethics than many companies (or at least more expansive than their compliance officers).  Employees view ethical business conduct as more than high-risk, headline-grabbing issues such as bribery and corruption or company-centric issues such as conflicts of interest.  For them, ethical business conduct includes how a company treats its people.

As a result, even the smallest things can affect the employee’s view of whether the company is ethical—and therefore whether it is important that they act ethically also. Time and time again, employees pointed to abusive managers as evidence that a company pays only lip service to being ethical.

Employees also focused on things such as executives having limousines on call during times of austerity and layoffs, and the fact that in headquarters, corporate staff have an expensive espresso machine in a subsidized break room while in the business units, employees are told it would be “too expensive” to buy a refrigerator to store their lunches. Conversely, they raved about executives who ate in the cafeteria with employees and companies that allowed flexible work hours.  In short, employees put great weight on fairness and whether they are treated with respect. (See number 1 above.)

3) Constant Communication Works

Employees often view annual training and certification as “ticking the box,” “CYA” or “going through the motions”—and all the more so when the annual training is exactly the same, year in and year out.

By contrast, employees who receive training throughout the year and whose managers engage employees in discussions of ethical business conduct during routine meetings and conversations were far more likely to have a strong, positive view of their company’s commitment to responsible business conduct. It’s rather like saying “I love you” to someone. If you say it only once a year on a set schedule, the impact is minimal (and maybe even negative).  But if you say it frequently, at appropriate times in a natural way, your sincerity is apparent—and   more likely to be reciprocated.

The Takeaway

Employees are perceptive. They want to work for companies that do the right thing. As a result, companies that are striving for a truly effective ethics and compliance/responsible business conduct program need to invest substantial time and resources into helping managers and senior leaders develop the skills needed to live the company’s values day in and day out.

(To learn more, download our complimentary white paper Creating a Culture of Ethics, Integrity & Compliance: Seven Steps to Success)


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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