Recommitting to integrity

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Print this page by Candy Duncan

Some experts on the economy sense that the worst days of the recession may be behind us and a slow recovery has begun. As we prepare our businesses for a new and even more demanding marketplace, it’s also the perfect time to rethink our approach to ethics and compliance issues. We should make sure they are the foundation for, and are embedded into, everything we do.

Our constituents — customers, clients, investors, employees and members of our communities — have been deeply disappointed not only by the turbulent economy, but also by what they perceive as a shocking lack of values by certain institutions and leaders.

A critical starting point for strengthening or rebuilding an organization is creating an environment in which every individual feels personal responsibility for the integrity of the business.  Corporate culture and corporate strategy align effortlessly when executives ask, “Are we doing the right things in the right way?”

Other recommendations for a vital, holistic ethics and compliance program include:

• Make those responsible for ethics organizationally separate from the operations of your business, and don’t base their compensation on business results.  This ensures they have the independence and objectivity needed to champion integrity.

• Likewise, strengthen the independence of your board of directors.

• Ensure your code of conduct directly relates to practical everyday issues.  Involve experts from key functions to help craft or update the code.

• Embed ethics and compliance in the heart of your business and in all phases of career development.  Recruiting, orientation, internships and exit interviews offer excellent opportunities to underscore and explore integrity issues.  Similarly, integrate ethics into technical training, linking the “what” and “how” of business performance.

• Give the ethics and compliance program stature.  This doesn’t simply refer to the level of people in charge of the program, but also to having visible leaders accountable for integrity whose experience and knowledge garner the deepest respect and highest confidence.

• Related to that, know that the “tone at the top” is often set by an employee’s peers or immediate supervisor.  Learn who in your organization is most admired for guidance on a day-to-day basis and engage them.  In addition, others who lead geographic or functional teams may serve as highly credible “relay stations,” reinforcing and localizing crucial integrity messages.

• Provide multiple channels for raising issues without fear of retaliation.  One or more of those channels should ensure anonymity.

• Consistently investigate and resolve reports, and communicate the results.

• Constantly evaluate the effectiveness of the ethics and compliance program.

Whenever the economy rebounds, all of us will need to have rethought basic assumptions about our businesses, our products or services, and our customers.  Rebuilding a healthy organization on all fronts calls for marrying the “what” of the greatest profitability with the “how” of the highest principles. 

Candy Duncan is KPMG area managing partner for the firm’s Mid-Atlantic Region. This article represents the views of the author only and does not necessarily represent the views or professional advice of KPMG LLP.

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