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Governance, Risk Management, and Compliance: It Can't Happen to Us—Avoiding Corporate Disaster While Driving Success by Richard M. Steinberg

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Elements of an Ethics Program

Large companies typically have in place a range of elements dealing with ethics and compliance, including a code of conduct encompassing ethics, a whistleblower channel, an ethics or compliance or other officer overseeing the program, and possibly an ombudsman to provide additional support. There may be training for personnel when the policy is enacted or changed, and usually the program is monitored or audited by the ethics officer and the internal audit function, with direct reporting to senior management and oversight by the board of directors.

This sounds pretty good, doesn't it? The reality, however, is that many companies with all of these elements do not have truly effective ethics programs. We need only to look at companies that have had major ethical failures with disastrous results to know that form does not suffice where substance is lacking.

What then, is necessary for an effective program? We can first look back at Chapter 3 on compliance programs—as noted, compliance and ethics leaders and their programs often are combined, for good reasons, as many of the same success factors are relevant to both. So, as with compliance programs, we see ethics built into the business, a culture based on integrity and strong ethical values, effective use of technology, and a strong and effective ethics office.

Looking at the elements of effective ethics programs more directly, here's what we find is essential.

Code of Conduct

Historically too many companies' ...

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