Creating Ethical Culture

The following steps can be effectively used to create an ethical culture in an organisation:

Step 1: Company Values

Every organisation must have values that are clearly stated to create a culture of compliance and ethics. Values that shape the ethical culture of a company through daily work practices can include respect, integrity, diversity, conscientiousness, safety, and creativity, among other things. For example, a manufacturing or construction company can focus on safety as one of the foremost values of the company since the employees would be working in construction and manufacturing worksites and nuclear plants, which may involve working with dangerous and hazardous substances. Hence, the safety code form one of the top values that is fundamental to the company ethics program and is prioritised the daily work practices of the employees or workers.

Step 2: Code of Conduct and Code of Ethics

The values that have been chosen in the above step must be incorporated into the code of ethics of the organisation. The code of ethics shall contain guidelines regarding behaviours and principles that would govern decision-making. The code of conduct shall have ways to apply the code of ethics to a range of actions and situations. Both Documents must include guidelines pertaining to compliance and ethics risk areas. Code of conduct directions to the employees to apply the code of ethics to the various issues that are valuable to the company. However, an understandable formal code of conduct will not guarantee real-world compliance. A code of conduct audit shall assess whether the code of conduct and code of ethics that exists in material form has been understood and internalised by the employees in their daily experiences. In an internal ethics audit, you must ensure that all the directors, employees and agents are provided with the code of conduct and to assess steps being taken to make sure that the code of conduct is understood by the employees and that they are familiar with what is required from them.

Step 3: Assessment of risk

Once the company has a code of ethics which is understood and believed in by the employees, the next step shall be to understand the risk areas pertaining to compliance along with the risks and the guidelines and the code of conduct that was provided by the company.To complete this task, the company should conduct a risk assessment to assess whether it has been focusing on the current risks to business due to changes in business practices, organisation, laws and regulations. When preparing the risk assessment with respect to compliance for each business unit with applicable laws and regulations, it is imperative to include issues that are addressed in the code of conduct like harassment issues, protection of assets of the company, anti-kickback, and anti-bribery, among other things.

Step 4: Ethics and Conduct of Business Policies

An effective compliance and ethics program must include procedures and policies that address specific risks that a company is facing. For instance, procedures and policies that are relevant to international trade risks that are related to necessary export, money laundering,and anti-boycott measures, among others.

An ethics audit and business conduct policies audit shall assess whether all the employees are aware of these policies, have understood them and on implementing the min their daily work life.The internal audit must examine the list of policies to check if high-risk areas from the code of conduct and the risk assessment have been addressed.For existing policies, the company should conduct employee interviews to examine awareness of these policies. It should ask employees how well they understand their responsibilities with respect to the business conduct policies and ethics policies.In case an employee says that they are unaware of the guidelines of the company on a particular policy, they must meet made aware of the same by referring them to the specific section of the code of conduct and the respective policy. A company must also identify policies which the majority is not familiar with so as to provide additional training in those areas.

Step 5: Awareness training audit

It is not sufficient enough for a company to simply have policies. It is imperative also to have a training program that helps employees be aware of compliance and ethics issues. While creating or evaluating a training programme, things like the following must be considered:

• The mode of delivery of the training to the employees. Whether it will be a live session or will it be an online programme. Whether the delivery method is sufficient enough for all the employees that are required to take up the ethics and compliance course.
• Ways in which the completion of a course shall be assessed, like a quiz with the minimum score requirement after the training course ends.
• Percentage of employees that have completed the required courses after tracking the completion status of the requisite course. The company must also consider the records that it shall take to follow up with those employees that have not passed training or completed the course.

Step 6: Mechanisms for inquiry and reporting

The ethics and compliance programme of a company must include the process of asking questions or reporting their concerns about violations of company policies, laws and regulations, and ethics for employees, customers, suppliers and other persons carrying business with the company. To examine the above mentioned process reported through mechanisms like the company hotline, the audit must consider the below mentioned:

• Whether there is a prioritisation of concerns that have been received based on the severity of the issues
• Whether there exists a former protocol on how investigations shall be conducted and by whom.
• whether there is a formal protocol to make sure that the investigations are conducted, consistent standards and guidelines to ensure thoroughness
• whether the investigations were formally Documented in reports
• whether the investigations were completed well within the established timeline
• whether the investigations were thorough enough to reach a decision with respect to the validity of the concerns
• whether there were any explanations for actions that what taken or not taken based on the concerns received and the subsequent investigations conducted
• whether any ensuing action was taken up after appropriate management approvals and consultation with experts like the HR or the legal team
• whether the callers were made aware of the investigation results.

Step 7: Communication program

a communication plan must be developed to increase awareness inspector the ethics of the company and remind employees that compliance and ethics are essential to the company. For the communication programs to be effective, they should engage the audience with particular messages about ethics through our variety of media. Effective communication programmes can include the below mentioned:

• Individual pages on compliance and ethics on the internal and external websites of the company.
• Ethics blogs from senior management and executives to help set the tone
• incorporating messages, Q & As, and short videos with respect to ethical issues in the newsletter of the company.
• Ethics posters must be displayed prominent locations of the office space which the contact details of the ethics officer and a toll-free hotline number. These posters must clearly state that concerns about whether respect to ethics and compliance can be reported anonymously and that there would be no retaliation for reporting even unsubstantiated concerns.
• The company must ensure that the code of conduct, code of ethics and ethics messages are provided in the native language of the employees.

A strong communication programme will help keep ethics and compliance the top priority for all employees.

Step 8: Assessment and Evaluation of the Ethics and Compliance Program

When implementing the culture of ethics and compliance, it is imperative to conduct conference program evaluation and assessment. There must be regular external and internal audits programs of the company, and evaluation of the internal controls must be tested. The company must conduct focus groups and employee surveys to assess employee impressions of the company’s ethics and compliance culture. Program evaluation and constant vigilance are essential to maintain a robust culture of ethics.

Step 9: leadership commitment

In order to achieve and maintain an ethics and compliance culture in the company, there must be a strong commitment five from the top management to instil a perception that compliance and ethics-related issues are essential to the company.It is fundamental that the leadership and the top management take responsibility throughout the above-mentioned steps to demonstrate the importance of ethics and compliance through their actions. There are many ways the activities and organisational structure can depict leadership commitment:

• The CEO can make a formal statement of the commitment of the company to the highest ethical conduct with respect to all aspects of the business
• the leader of the ethics organisation can directly report to the CEO or the board of directors
• The ethics and compliance committee, with a senior executive like the committee chairman, can provide oversight and leadership to the ethics programme and assess the status of the activities conducted under it. The committee should include senior leaders from human resources, legal, communications, internal audit, security, IT, operations and other departments.