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SHRM Home > HR News

1/16/08 6:00 AM

Interest in Ethics and Compliance Programs Grows

By Bill Leonard

Following a rash of corporate scandals and enactment of the Sarbanes-Oxley Act, employer interest in ethics andcompliance training programs has never been higher, experts say. However, when it comes to committing resourcesand putting in the effort needed to make these programs truly effective, employer interest wanes considerably,

according to Ronald Berenbeim, principal researcher of global corporate citizenship for The Conference Board. Interest in ethics and compliance programs is very high among employers throughout the United States and acrossthe globe, said Berenbeim. The problem is that the businesses which are merely paying lip service to the idea vastlyoutnumber the employers that have taken the steps and made the commitments necessary to make these programstruly effective.

However, that could change soon, as the federal governments Office of Management and Budget prepares toimplement a set of rules requiring federal contractors to have an ethics and compliance training program in place.

The attitude is changing, and an increasing number of employers are making the commitment to develop effectiveprograms, said Alex Brigham, president and CEO of Corpedia, an ethics and compliance training firm. However, thesecompanies are still in the minority, and that should begin to change as more and more companies come to understandthe true value these programs provide. It will take time, though.

Brigham and other sources for this article say the value of having an ethics and compliance program is fairly obvious inthat businesses can avoid costly investigations and fines by adhering to ethical standards and complying with federaland state regulations. The harder sell, they admit, is showing top management that committing to an effective ethicsand compliance program is worth the resources and effort needed.

Training Is Expensive, Necessary

One of the most expensive aspects of an effective ethics and compliance program is providing adequate training toemployees. A good training program is a necessary component, says Frank Guglielmo, senior vice president of leadership and organizational development for the Interpublic Group of Companies.

You cant have an effective ethics and compliance program without good training, and that does take a significantcommitment of resources, Guglielmo said. The challenge is showing the training does add value, and that can betricky.

Tricky indeed, as one aspect of such successful training is an increase in the number of reported incidents of ethical

violations or noncompliance after completion of the program. The C-suite typically wants to know why theres anincrease in reported noncompliance, according to Guglielmo.

Its a natural question that upper-level managers may have if the number of reported incidents increases aftertraining, he said. The answer is to see this as a good indicator that the training program is working.

Peter Liria, director of global e thics and compliance for Avaya Inc., agrees with Guglielmo and says that an increase inreported incidents should be expected and a welcome result.

A good training program will raise awareness, but it wont change behaviors immediately, Liria said. By raisingawareness, you will eventually change behavior. When I have been asked why the number of incidents has increasedfollowing the training, I say that the behaviors have always been there, and the training shows we are addressing theissue.

Liria said that the importance of good training often is played down, and organizations that dont make it a highpriority are making a mistake.

The foundation of a good ethics and compliance program is training [that] engage[s] participants and ha[s] themthink about and understand the effect of ethical behavior in the workplace, Liria said.

After examining different training formats, Avaya settled on web-based training, Liria said, because it provided theflexibility and accessibility the company was looking for. He reviewed several training courses to find the best and mostengaging programs. Training that does not engage and merely lectures on what ethics and compliance should coverwill lose the interest of participants and wont have the impact employers want and need, he said.

Training that makes employees think and actually involves them in making decisions and seeing the impact of thosedecisions works best, he said. Its also important that employers review the training courses frequently and look forways to address new issues and to make these programs more creative and engaging.

Liria and Guglielmo agree that there are difficulties in measuring the true value of ethics and compliance training.However, the overall effect of ethics and compliance programs goes beyond just limiting legal liabilities and can help

shape employee attitude and corporate culture.

We have found through attitude surveys [that] our employees truly appreciate the fact that everyone within thecompany can be held accountable for their actions, regardless of their position or level, said Liria. It has definitelyhad a positive impact on our corporate culture.

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est in Ethics and Compliance Programs Grows http://www.shrm.org/hrnews_published/articles/CMS_024208.asp#P-8_0

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Bill Leonard is senior writer for HR News.

Related Articles:

Compliance Is Not Enough: Law Enforcement Looks to a Companys Ethical Culture , SHRM Legal Report ,December 2006

Experts: Ally HR with Ethics, Compliance Officers , HR News, May 26, 2006

The Ethics Squeeze , HR Magazine, March 2006

ABA Panel Addresses Best Practices in Corporate Compliance , HR News, Aug. 12, 2005

Business EthicsCodes of Conduct/Ethics Programs , SHRM Online

Briefly Stated, December 2004

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