Ethics and Compliance
The Ethics & Compliance Initiative (ECI), in the introduction to the final version of Principles and Practices of High-Quality Ethics & Compliance Programs: Report of ECI’s Blue Ribbon Panel, released their draft report late last year but sought public comment (which was received and incorporated) before releasing the final report:
We strongly believe that there are fundamental characteristics essential to high-quality programs that are scalable and apply in any setting, large or small, highly regulated or not.
In our overview of ECI’s draft report earlier this year, we shared the blue ribbon panel’s take on the purpose of ethics and compliance programs, the approach that high-quality programs take to achieve their objectives, and the five principles common to all organizations with high-quality ethics and compliance programs.
Here, are those five principles again, with several, but not all, of the report’s list of supporting objectives. See the full report (citation and link provided below) for the complete list of supporting objectives, leading practices, related examples from high-quality programs, and related pitfalls to avoid.
- Ethics and compliance (E&C) is central to business strategy.
- The E&C program is designed to integrate with business objectives;
- E&C is given the resources and access needed to ensure both proper integration with operations and an independent voice to leaders;
- The board of directors is knowledgeable about the impact of the E&C program and actively monitors its implementation across the business;
- The organization maintains rigorous third-party due diligence processes that screen for integrity; and more.
- Ethics and compliance risks are owned, managed, and mitigated.
- Leaders across the organization are assigned responsibility for the ongoing identification and mitigation of risks that are endemic to their operations;
- Self-assessment, early issue spotting, and prompt remediation of compliance gaps are recognized and rewarded;
- Guidance and support for handling key risks are provided to employees according to their role; and more.
- Leaders across the organization build and sustain a culture of integrity.
- Leaders are expected and incentivized to personally act with integrity and are held accountable if they do not.
- Leaders across the organization own and are accountable for building a strong ethical culture.
- Values and standards are communicated effectively through many channels; and more.
- The organization protects, values, and encourages the reporting of concerns and suspected wrongdoing.
- Leaders create an environment where employees are prepared and empowered to raise concerns and resources are provided to support employees in ethical decision-making;
- The organization respects all employees’ rights to report to government authorities;
- The organization provides a broad and varied number of reporting avenues, each with effective tracking for escalation and response of significant matters; and more.
- The organization takes action and holds itself accountable when wrongdoing occurs.
- The organization maintains investigative excellence, and disciplinary action is consistently taken when violations are substantiated;
- Systems for escalation and response are well developed and regularly tested, and leaders are held accountable for compliance;
- Appropriate disclosures are made to regulatory or other government authorities; and more.
The principles and supporting objectives identified in the ECI report, bolstered by related examples and pitfalls, will provide every organization insight into how to improve their own programs.
Ethical Advocate works with ethics and compliance officers on ethics hotline implementation and management, training, and related ethics and compliance issues. We welcome your questions.
Ethics & Compliance Initiative. Principles and Practices of High-Quality Ethics & Compliance Programs: Report of ECI’s Blue Ribbon Panel, April 2016. http://ethics.org/certification/blue-ribbon