LRN’s annual Ethics and Compliance Program Effectiveness Report is an important yearly event. The report is often filled with important trends and observations. For compliance officers, there is always important trends and information to review.
As we know, however, 2021 was no ordinary year. Instead, for many companies, the challenges of COVID-19 split the year into two – and LRN has followed suit. Its first report, which was recently released, assessed ethics and compliance program performance in the COVID-19 environment, when companies were tested (like our country) by the COVID-19 pandemic. LRN plans to issue a second report relating to program performance later this year.
COVID-19 was an unusual crisis (to say the least) and it is fair to guess that companies faced unprecedented challenges. Of course, COVID-19 tested corporate crisis management plans. But even more so, COVID-19 was a crisis stress test on a company’s culture, values and ethics and compliance program.
LRN conducted a survey of 650 ethics, compliance and legal professionals employed by global companies. And the results were positive with a number of key observations.
Two significant findings:
With respect to ethics and compliance programs, LRN noted the following findings:
LRN noted a number of findings that corporate boards and senior leadership “stepped up” to the challenges their organizations faced during the COVID-19 pandemic. Overall, corporations’ ethical cultures and frameworks were resilient and supported efforts by key stakeholders to adapt to the challenges posed by the pandemic.
While ethics and culture were tested and appeared to perform well, the picture was not so bright for ethics and compliance programs, meaning the policies and procedures and controls guiding the organization’s conduct.
LRN listed several key findings indicating the challenges that ethics and compliance programs experienced during the pandemic:
LRN also found that most ethics and compliance programs did not pivot quickly in response to the pandemic, the change in working conditions, and the overall impact of the pandemic.
Many compliance and legal professionals who responded specifically noted that the pandemic was likely to have a continuing negative impact on their compliance program, citing the difficulty to conduct remote internal investigations, the increase in misconduct linked to remote work arrangements, their expectation that ethics and compliance oversight and monitoring efforts will be less effective and the pressure to relax risk-mitigation procedures as business resumes.