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Establishing an ethics and compliance programme within a company is not a straightforward project. Companies have thousands of employees and business partners and operate across the globe, frequently in emerging markets. A programme is tailored to an organisation’s size, business relationships, industry, geographical foot-print, the nature of the business transactions, its mission and values. Every business has a unique risk profile and corporate culture and there’s no generic template to follow.

As with most projects, it’s important to have a plan and create long and short term goals for a programme.

Before you can think about your long and short term goals, you’ll need to establish where you are right now. That means having a good understanding of both the internal and external context of the company’s compliance structure as it stands.

External context: what is the regulatory environment surrounding the company? Understand the regulations, standards and laws that apply to the industry and what it means in terms of the way the company can conduct its business.

Internal context: have there been any breaches of regulations in the past? What policies and systems does the company already have in place that can be part of the compliance programme? Do they work? Are they used? Do people know about them?

What drove the company to ask you to establish a compliance programme?

This will impact how the programme is perceived internally and therefore is very important. Programmes can be reactive i.e. they are created in response to a compliance failure; they can be preventative i.e. to avoid a compliance failure or in an ideal world it would be proactive i.e. because the leaders are inspired to create a culture of ethics which reflects the values and purpose of the company. 

Knowing the motivation behind having an ethics and compliance programme can inform you how successful, or effective, your compliance programme will be in the long term.

It’s now fairly well established that there are 5 essential elements for an ethics and compliance programme. These 5 essential elements are common factors in the guidelines that have been offered by the US Sentencing Guidelines, the OECD and the Ministry of Justice following the enactment of the UK Bribery Act:

Leadership

Risk Assessment

Policies and Procedures

Training & Communication

Monitoring & Evaluation

If the leaders are setting an inspirational example, then this is one of the best indicators of an ethical corporate culture that you could ask for. The message from the top becomes part of the company’s DNA and employees will know exactly what is expected of them i.e. to behave according to the values of the company. They will know to do the right thing because that’s part of what the company stands for, not just because they are following the rules.