I just returned from the latest ECI Fellows meeting, which focused on behavioral ethics. I will devote the next few posts to insights and lessons from the meeting.
Research from the Ethics & Compliance Initiative (ECI) has demonstrated that organizations with a robust compliance program and a strong ethical culture generate outcomes that reduce business risks.
That research, first published in 2007, also found that while a strong culture has a greater effect on the outcomes, that effect is manifested only when a robust program has been put in place first.
In a more recent report (2018), ECI demonstrated an additional benefit of starting with a robust compliance program: the stronger the program, the more employees perceive that they work within an ethical culture. In other words, without any effort towards improving your culture, you improve it by working on your program. As if this wasn’t cool enough, it means that your outcomes will also improve by an order of magnitude.
Let’s test this. Imagine two employees freshly hired in two different organizations where no effort is made on programs or culture, except that one of the organization has a code of ethics. Which employee is more likely to feel like they just joined an ethical organization? Which employee is more likely to pause before doing something that seems wrong to them?
Of course, a code of ethics alone does not make a robust compliance program, nor will it create an ethical culture. The hypothetical above was exaggerated for effect. But when an organization builds a program, drip by drip, with a code and policies and training and controls, etc., it sends a message that it cares about doing the right thing.
So while many organizations today are rushing to work on their culture because that’s what everyone is talking about, they should not neglect the importance of keeping their programs fresh and keeping them front of mind for all their employees.