- Eighty five per cent of respondents say instilling a culture of integrity, ethics and respect is their number one priority for the compliance role in 2017
- Board level reporting means senior leadership can play a major role in ethics and compliance engagement
Establishing a culture of integrity, ethics and respect is the number one priority for companies in 2017, according to a new Report published today by NAVEX Global®, a leading ethics and compliance software and services firm.
The Report, titled 2017 EMEA & APAC Culture & Compliance Programme Benchmark, shows that, in common with a 2015 report, getting an organisation’s culture right is the main objective for compliance professionals in the year ahead, with 85 per cent of respondents saying it is one of their three main goals.
However despite this, only 32 per cent of firms indicated that they are planning to undertake a culture or ethics assessment in the next twelve months. In addition, workplace behaviour was rated as the lowest area of risk receiving attention by stakeholders (29 per cent).
“It’s really encouraging that so many firms believe that getting their organisational culture right is key to getting their overall compliance programmes right. The question for me is – how do the words and actions connect?” said Carrie Penman, Chief Compliance Officer at NAVEX Global. “With less than a third of companies planning to undertake any assessment of culture or ethics in their business, and with workplace behaviour seen as a low risk consideration, it seems that they are missing an opportunity to follow strong words with positive action”, Penman continued.
In a related finding, complacency about employee retaliation remains a big concern, with the Report highlighting that only 19 per cent of firms plan to take action to prevent retaliation against employees in the next 12 months. Only 24 per cent of respondents rate supervisors mistreating an employee after a report is made as a significant worry. A study conducted in the UK financial services sector by NAVEX Global last year found that fear of retaliation is the number one reason why employees do not speak up about unethical behaviour. In response, firms must have a written and enforced policy against retaliation for reporting misconduct and for participating in investigations into misconduct. “Providing specific training on identifying and avoiding incidents of retaliation can and should be an element of an organisation’s culture initiatives” Penman advised.
The Report also finds that there has been a significant increase in organisations reporting regularly to their board of directors, with the majority of respondents saying that their organisation now provides ethics and compliance reports to the board on a regular basis (73 per cent). Significantly, this has increased by 28 per cent from the 2015 report. Only seven per cent stated that their organisation does not provide any type of report to the board on ethics and compliance matters down from 20 per cent in the 2015 report.
While the improvement in board level engagement has been significant since the last report, there remains an opportunity to do more. Penman said: “Providing a compliance report is a very positive development, improving board engagement and giving them a better view of the firm’s ethics and compliance programmes. Part of the compliance role is to ensure the board understands its responsibilities and has the intelligence to drive positive cultural change throughout the organisation. Organisational culture needs top-down support and bottom-up buy-in to be credible and to effect improvements.”
In addition, the Report found that:
- Increasing awareness of ethics and compliance policies and regulations across an organisation is the top compliance activity planned over the next 12 months (80 per cent of respondents).
- Satisfaction concerning the management of third party risks receives the lowest performance rating, with 63 per cent of respondents seeing this as ‘Poor’ or ‘Fair’.
“Our Report highlights the good progress being made by many firms in taking seriously issues relating to ethics and compliance, driven by a better understanding than ever about the potential reputational risks of failing to do this. However, to drive lasting and positive change, this cannot be a tick-box exercise – it must be real, aligning programme activities to core objectives and risk areas, as well as come from the top and be adopted at every level of the business”, concluded Penman.
To download, NAVEX Global’s 2017 EMEA & APAC Culture & Compliance Programme Benchmark Report follow the link [here].