Ethics and Compliance Programs – Leading Practices

Leading practices of prior years have become today’s standards,

and new best practices continually redefine the profession.

–Ethisphere, 2015

One of the best ways to keep up with best practices in ethics and compliance is to learn from leaders in the field. We can learn a lot from the Ethisphere Institute’s 2015 World’s Most Ethical Companies (WMEC) honorees, courtesy of Ethisphere’s whitepaper Actionable Insights from the 2015 World’s Most Ethical Companies®. In it, Ethisphere identifies the following emerging trends:

* The process and rigor supporting the targeting and delivery of training as well as the associated training and communications plans will continue to increase

* Incentivizing employees who engage in ethical conduct or actively support ethical conduct will continue to increase

* Leading programs will increasingly codify practices to establish formal process

* The compliance function will continue to become more visible and independent, and more involved in business decisions

The whitepaper goes on to examine the following four areas in some detail:

1.  Next Practices – The Evolution of Compliance & Ethics Programs

2.  Data the Board and Executive Managers Should See

3.  Governance and Transparency Driving Trust Among Employees, Owners, and the Public

4.  Measuring Up? Understanding Your Company’s Culture and the Effectiveness of Your Compliance Program

In this blog post we will examine the first topic—the evolution of compliance and ethics programs.

Training and communication was a major topic in this section. Of the 2015 WMEC honorees, 95% collaborate across functions in developing their training curriculum and 78% develop a multi-year training curriculum. For communications effort more generally, 94% develop a communications plan to organize their compliance and ethics messages across the organization, 81% use video and/DVD as part of the communications programs, and 63% use company-wide initiatives or programs to communicate with employees.

In addition to offering general code of ethics training, these WMEC organizations offer wider range of targeted training than do non-honorees, on such topics as data privacy, diversity and discrimination, social media, and intellectual property.

Organizational compliance initiatives can sometimes be viewed as the “stick” in a carrot and stick approach to influencing behavior, with many focusing on “thou shalt not’s.” Ethisphere’s WMECs, however, “are increasingly leveraging performance reviews and awards to incentivize employees who engage in ethical conduct or who actively support compliance initiatives.” An impressive 66% use employee evaluations or annual performance reviews to recognize ethical conduct and 55% offer awards and recognition to showcase ethical business conduct.

The ethics and compliance functions of WMEC honorees are becoming better integrated into business decision-making separate from compliance issues, according to Ethisphere, which reported the following in its whitepaper.

In 97% of 2015 WMECs, the ethics and compliance function has primary budget responsibility for all ethics and compliance programs, 96% invite the ethics and compliance function to design audits and receive audit results, and 92% give the ethics and compliance function primary hiring authority for all positions within its function.

Other related areas in which WMEC honorees lead non-honorees include the extent to which they have final approval for field compliance operations, input into product and service decisions, and input into procurement decisions.

The whitepaper provides additional details about the evolution of ethics and compliance programs as demonstrated by companies deemed “the world’s most ethical.” It also provides details about the remaining three topic areas, which were identified above. We will examine those in future blog posts.

Ethical Advocate provides leading governance, risk and compliance solutions. It provides custom designed live ethics trainings and seminars. For more information, visit the website at


Actionable Insights from the 2015 World’s Most Ethical Companies. Ethisphere Institute, 2015.

Note: The 2016 World’s Most Ethical Companies were recently announced, and the “actionable insights” from these honorees will be published later this year.