What are the guiding principles of compliance? Success and responsibility are essential to compliance and an organization's Code of Ethics. Doing business well therefore requires responsible action within the law.
Whatever its sector, a company needs corporate compliance and a Code of Ethics to operate effectively. What does that involve? Helping the company, its leaders, and employees consistently follow applicable laws, regulations, standards, ethical practices, and internal policies.
Corporate compliance should not be treated as an abstract idea but as a practical standard of conduct. It sets objective expectations for people in the organization, helping them focus on broader company goals and operate without unnecessary problems.
The purpose of a compliance program and Code of Ethics is to protect the company.
A serious risk arises when team members lack a culture of compliance and work informally or unethically, excusing it by saying, 'This is how we have always done things.' The following principles can help prevent that:
State objectives and consequences clearly and simply
A compliance policy should explain what the company aims to achieve by putting it in place.
It should set out a clear, concise commitment to legality and integrity. Everyone involved with the organization, from leadership to frontline employees and external partners, should understand why that commitment matters. The policy should also explain the consequences of conduct that violates it, regardless of the person's position.
Establish the foundations
Every policy should connect to a legal or regulatory requirement, a core value, or a performance objective.
Not every policy must originate in a regulatory requirement, although many do. Every compliance policy should explain why it exists and why it must be followed.
Refer to materials related to the Code of Ethics
Include written references or electronic links to the regulations or laws underlying the company's Code of Ethics , identified risks, or performance goals. The important point is to make clear what drives the compliance program and its supporting policy.
Define exceptions
A good compliance policy explains how someone affected by it may justify an exception to strict application, or when exceptions are not allowed.
A policy should not ignore requests for exceptions. Otherwise, employees may be too afraid to ask and might violate the policy without telling the company instead.
Encourage rather than discourage
A compliance policy should win the support and enthusiasm of employees, not merely their blind obedience. Its language, goals, and examples should emphasize what people can do rather than only what they cannot do.
At EthicsGlobal, we believe a good compliance policy requires careful respect for rules and standards. That helps prevent and detect violations, avoid fines, claims, penalties, and lawsuits, and improve the company's public image.