With additional financial compliance regulations being enforced, it’s increasingly important that employees at all levels adhere to a company’s ethics and compliance program. However, it’s no longer enough simply having those programs in place. Find out how corporate culture plays a vital role in enforcing an ethics and compliance program within an organization.
Compliance Programs and Ethical Behavior
According to LRN’s 2016 Program Effectiveness Index Report, financial firms with the most effective compliance programs use the presence or absence of ethical behaviors to measure the effectiveness of their programs. For example, measuring ethical decision-making, organizational justice and freedom of expression helps determine the efficiency of a compliance program much more effectively than counting the number of training courses or hotline calls that occur within those programs. After all, the financial meltdown of 2008 happened despite rules, policies, codes of conduct and controls being in place at the financial institutions that were involved.
Within the most ethical organizations, middle managers and executives are responsible for communicating the company’s code of conduct to all other levels of the firm. Messages and channels used for communication should be tailored to each group of workers for maximum effectiveness. For example, administrative employees may participate in a meeting about ethical behavior whereas production workers may receive a newsletter about the same topic. When employees at all levels exhibit the same type of ethical behavior, the firm is more likely to remain compliant with regulations. If issues arise, they’re typically taken care of quickly.
Core Beliefs Expressed as Behaviors
When employees at all levels show ethical behavior as part of corporate culture, they promote the fact that ethics are highly valued in the firm and serve as a foundation for how business is conducted. This provides a competitive advantage over other organizations.
Buy-In From Managers and Executives
Since behavior in an organization is often learned from the top down, top-level employees must support the company’s ethics and compliance standards and act accordingly. Also, managers and executives need to take immediate action upon learning of a compliance violation so the issue can be resolved as efficiently as possible.
Partner With a Leader in Financial Compliance Recruitment
Having an ethics-based company culture is much more effective in maintaining financial compliance than simply having compliance programs. To further assist with your financial compliance needs, reach out to the financial compliance recruiting experts at CarterWill Search and Flex today!
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