Companies need to know

  • what the rules are that govern their activities,
  • how to behave in order to observe them, and
  • what the consequences are of compliance failure

Those compliance failures appear in the press every week, if not every day. Fraud, theft, bribery, price fixing, false accounting, money laundering, accidental loss of personal data….

Maxwell, Enron, Tyco, BAE Systems, Siemens, Alstom, Innospec…the list of corporate – and personal – casualties goes on.

The consequences for those caught out or simply under suspicion are severe on both the corporate and personal front – lengthy investigations consuming valuable company time, hefty legal fees, fines, imprisonment, civil actions, loss of reputation and, sometimes, bankruptcy and business collapse.

Because a company’s behaviour is only as good as that of its employees – it’s Joe Bloggs in the accounts department or Sarah Jones in Sales who tend to get things wrong, even if they deliberately make bad ethical choices or cut corners thinking they are doing the right thing for the company.

And training is not only for the company’s good, either. Employees themselves can incur personal criminal or civil liability if they break the rules, and put their own jobs and the stability of their personal lives at risk (the level of personal stress occasioned by mistakes at work is frequently overlooked).

So it’s actually the ordinary people in the organisation – not just senior management or the legal or compliance department – who need to know the three ‘what, how, what’ bullet points above.

Knowledge of the rules does not come through osmosis, and neither is ethical behaviour at work learned at mother’s knee – they have to be taught.

Employees need to be told that they must avoid common pitfalls, for example:

  • discussing prices with their friends in other companies
  • slipping an immigration officer in Africa a few dollars to ignore a lapsed visa
  • accounting for next month’s sale this month in order to hit a sales target
  • cutting corners on safety checks because it saves the company time or money
  • giving their sister’s cleaning company a contract in order to ‘keep it in the family’
  • passing out personal data to people outside the company without following company policy
  • copying another company’s invention
  • using secret information from their previous employment in their new employer’s business

These are only some of the drivers for training.  In my next look at the subject,  we’ll touch on other benefits to the company from demonstrating to the regulators it has made every effort within reason to provide ethics and compliance training to its employees and associates.