How to Build a Business Ethics Program
Recent corporate financial scandals have highlighted the importance of business ethics and legal compliance. Yet a recent National Association of Corporate Directors (NACD) survey of 280 corporate CEOs and directors found that “only one of three directors felt that they were highly effective in ensuring legal compliance”.
Building an Ethics and Compliance Program
Most companies realize that they need to develop and implement a business ethics and compliance program.
An effective program can:
- Establish a code of conduct that reduces risk of criminal behavior
- Detect wrongdoing, foster quick investigations, minimize consequences
- Demonstrate company’s ethical/legal philosophy during an investigation
- Reduce fines if company is found guilty of wrongdoing
- Enhance company reputation and stature
Looking at the Options
But how do you build an effective program? Companies find themselves with three options to build the program:
- Develop in-house from scratch
- Hire an external consultant
- Use a pre-written manual
And most of these companies learn a few lessons - sometimes the hard way.
Making a Strong Decision
Developing a program from scratch can be very time consuming and costly. Also, the company might not have the knowledge or understanding of the complexity involved. But hiring an external consultant is not always a cost effective option either. So what’s left?
Developing Your Ethics Program
By using a pre-written template or manual, many companies have found it easier to develop their business ethics program. And to do this, they look for what a strong program needs.
A highly effective tool for creating, organizing and implementing a sound business ethics and compliance program should provide:
- Sample policies and procedures
- Step-by-step instructions for the development of a program
- A business ethics training program outline with classroom materials and a detailed session leader’s guide
- Business ethics and compliance officer position description
- Templates for employee involvement
- Sample code of conduct
Implementing Your Ethics Program
If the company board has committed to a strong business ethics and compliance program, the next step is to put the manual in the hands of corporate executives responsible for implementation. Used properly under advice of legal counsel, this efficient tool will yield a solid program that the board can understand, endorse, and monitor for effectiveness.
With step-by-step guidelines and accompanying examples of policies, procedures, a training program and an employee survey, such an effective tool provides an excellent road map for implementing an ethics and compliance initiative.
Maintaining a Culture of Integrity
Companies should make certain that their ethics compliance manual provides fully editable MS Word files with sample policies, surveys, forms and training session outlines. Also, businesses should ensure their ethics compliance system manual is fully endorsed by The National Association of Corporate Directors (NACD) as a tool to maintain a culture of integrity.
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May 31st, 2007 at 11:50 pm
Hello, i’m a student in Master 2 at a university in Cambodia. I had 1 couse about business ethic last year and this year i had a quest from France to present about Fair Trade. I’m not clear about what is the different between ethical trade and fair trade.
June 4th, 2007 at 11:18 am
I understand your confusion. According to English-language dictionaries, “fair trade” and “ethical trade” are the same thing – trading honestly and impartially, according to accepted rules or standards of conduct. Your contact in France is probably referring to the “fair-trade movement” which has sprung up in the last decade or so.
That kind of “fair trade” is based on dialogue, transparency and mutual respect and seeks greater equity in international trade. Fair trade organizations support producers in less-developed countries, raise awareness of fair trade issues, and work for changes in international trade rules and practices.
Fair trade organizations seem to be concentrating their efforts on agricultural products for the time being. In particular, fair trade coffee seems to be gaining in popularity in the U.S.A.
I recommend that you visit such sites as The Fairtrade Labeling Organizations (FLO) at http://www.fairtrade.net/, the International Fair Trade Association (IFAT) at http://www.ifat.org, the European Fair Trade Association (EFAT) http://www.european-fair-trade-association.org/ and TransFair USA at http://www.transfairusa.org/content/about/overview.php for more information.
And best of luck to you.