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Business Ethics Program Benefits

SUMMARY: The U.S. Federal Sentencing Guidelines and, more recently, promulgations by the Organisation for Economic Co-operation and Development (OECD) Good Practice Guidance, have called for organizations to develop effective compliance risk mitigation programs and internal safeguards to protect against internal and external threats of corruption and fraud. Despite decades of experience in developing such practices, the results appear to remain uneven at best, which is especially concerning at a time when risks are increasing. The stunning growth of social media, mobile technologies and big data has ushered in a new era of transparency, exposing illegal transactions and raising profound new ethical questions in the way business is conducted. Ethics and compliance executives have come a long way in developing sophisticated measures to prevent, detect and mitigate risk of malfeasance in their organizations. Meanwhile, those who wish to violate the rule of law and gain unfair advantage are using more sophisticated tactics. "Good enough" today just is not good enough. Organizations should continuously strive for "great" in their ethics and compliance program. What separates a "good" ethics and compliance program from a "great" one? How does an organization's investment in compliance and reputational risk mitigation systems and processes measure up against leading practices? At a time when risks are increasing, what are the building blocks upon which to build a world-class program that not only protects an organization from internal and external threats, but also enhances its brand and strengthens its relationships with all stakeholders? While there are a number of factors that separate the "good" from the "great," following are five factors that are key differentiators in the highest-performing compliance programs: tone at the top, corporate culture, risk assessments, testing and monitoring, and a chief ethics and compliance officer.

QUESTIONS:
1. What are the key benefits of having a strong corporate ethics program?

2. How does the company know if the costs of developing an ethics program outweigh the benefits of having an ethical culture?

3. Why is tone at the top so important to have an effective ethics program?

Solution Preview

Business Ethics, Ethical Compliance, ethics officer, ethics program, tone at the top
SUMMARY: The U.S. Federal Sentencing Guidelines and, more recently, promulgations by the Organisation for Economic Co-operation and Development (OECD) Good Practice Guidance, have called for organizations to develop effective compliance risk mitigation programs and internal safeguards to protect against internal and external threats of corruption and fraud. Despite decades of experience in developing such practices, the results appear to remain uneven at best, which is especially concerning at a time when risks are increasing. The stunning growth of social media, mobile technologies and big data has ushered in a new era of transparency, exposing illegal transactions and raising profound new ethical questions in the way business is conducted. Ethics and compliance executives have come a long way in developing sophisticated measures to prevent, detect and mitigate risk of malfeasance in their organizations. Meanwhile, those who wish to violate the rule of law and gain unfair advantage are using more sophisticated tactics. "Good enough" today just is not good enough. ...

Solution Summary

A company should create an ethics program to serve as a guide for appropriate behavior at all levels in the company. Also, the ethics program has to start at the top of the company and flows to all of the other employees. By doing so, the company will gain specific benefits that are needed for growth, continued success and attracting appropriate stakeholders.

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