We asked industry experts, colleagues and compliance officers what they believe will be the top issues impacting workplace ethics and corporate compliance programs in 2015. We gathered their best thinking and prepared our annual summary of trending issues and the steps you should consider taking as you plan for the coming year. We’ll share each of the trends here over the next few weeks
A few years ago it was common to remark on the two very different approaches to business ethics—one that was common in the U.S. and based on the eight-part compliance model promulgated by the U.S. Sentencing Guidelines for Organizations in 1991 (and the Defense Industry Initiative before that).
The other approach, more common in Europe, was based on the principles of Corporate Social Responsibility (CSR). There was overlap and many organizations managed to incorporate the best elements from both camps, but there was no question that the two approaches were largely distinct.
While CSR is still an enormously important force—especially in academia, non-governmental organizations and among social investors—within corporations the compliance model is now the dominant approach and, with some variation, defines corporate ethics and compliance programs worldwide. The new ISO Compliance Management System Standard (ISO 19600) is another example of the consequences of this movement toward uniformity.
As anti-corruption programs have taken root worldwide, so too has this compliance model. One result of the spread of a uniform, global approach has been the increasing cooperation among regulatory bodies. Most notably the U.K. Serious Fraud Office (SFO) has increased its cooperation with other governments to prosecute financial crimes.
Multi-national cooperation has led to greater access to evidence of wrongdoing that previously may have only been available to local authorities. Such cooperation would not have been as likely prior to the alignment of compliance models and the general acceptance of a uniform compliance philosophy. Given the underfunded status of some government regulatory authorities, and increased cross-border sharing, we should expect more such cooperation in the future.
Key Steps For Organizations To Take:
For compliance officers looking ahead to 2015, this trend means that in some respects, they now have an easier row to hoe. Senior executives—no matter where they’re located—are much more likely to understand the details and importance of an ethics and compliance program. Also, training, communications, auditing, documentation and reporting systems can be streamlined and better coordinated.
At the same time, it would be premature to think that we are truly at the point of one uniform global model. Important differences still remain and need to be accounted for:
- Strong differences of opinion continue, especially between the U.S. and the E.U. on issues of privacy and information sharing.
- Attitudes towards whistleblowing also differ. Evidence of the remaining differences includes the U.K.’s rejection of U.S.-style “bounties” for whistleblowers. The U.K. Financial Conduct Authority (FCA) rejected the approach on the grounds that “bounties” act as an incentive for employees to bypass company sponsored reporting systems and report straight to the government. The U.S. Securities and Exchange Commission had considered the same argument and though it made some concessions, it still came down on the side of “bounties.”
- And finally, even where laws and the compliance models are in sync, communications and training still must take into consideration cultural differences and norms.