Business integrity is not just a nice-to-have. At a time when risks are increasing and stakes are high, compliance and ethics are essential to business success. But even with a compliance and ethics program in place, internal controls can be undermined without proper support. So how do you demonstrate a commitment to ethical business practices?
Start At The Top
As great leaders know, management and the board of directors lead by example. Their personal conduct, operating styles, and attitudes toward risk set the tone at the top and show the degree to which ethical values are applied in business decisions. A strong tone at the top supports internal controls and promotes a culture of integrity, sending a message to employees that ethical behavior is valued and rewarded.
Set Expectations For Ethical Conduct
Expectations concerning business integrity should be understood at all levels of the entity and among external service providers and partners. When defining a code of conduct and company values, consider the expectations of your stakeholders and the ethical norms in the markets you serve. Once you’ve set standards for navigating ethical grey areas, reinforce them regularly in organizational communications and training.
Address Compliance Concerns
When difficult ethical scenarios arise, how will your employees respond? Empower individuals to report misconduct—such as bribery or falsifying numbers—without fear of retaliation by providing multiple ways for them to safely speak up: a whistle-blowing program, an ethics hotline, upward feedback processes, and/or regular staff meetings. Deviations from expected standards of conduct should be investigated and remedied in a consistent and timely manner to give employees the confidence that reporting will make a difference in their organizations.
Consider This Ethical Scenario
After being trained on the company’s code of conduct, an employee in the purchasing department reported to Human Resources and her supervisor that a vendor offered her a new car. In return, the vendor asked for her influence in allowing them to continue as a supplier of the company’s inventory products over the next few years. After investigating, the company validated the employee’s report. Investigators also learned that a former employee had in fact received a free car from this same vendor while employed at the company, though it had never been discovered. Following the investigation, this vendor was terminated and the company enhanced its competitive bid policies.
We Can Help
We understand that meeting today’s evolving ethics and compliance challenges can be difficult. That’s where we can help.
Accounting and Business Consultants, LLC offers a top down approach to internal control and compliance. Before we get started, we’ll examine how your organization operates in order to develop a custom-fit strategy that protects your entity from risk while enhancing its brand and strengthening its relationships with internal and external stakeholders.
Contact us today to learn more about our services in risk assessment and internal control design, implementation, and monitoring.