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Five Ways to Build an Ethical Culture

This article accompanies Balancing Act.

Friday, December 9, 2016
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An ethical corporate culture doesn't develop by accident -- it takes planning and effort, experts say. A recent report by the Washington-based Ethics & Compliance Initiative identifies key ways that organizations can integrate ethical behavior into how their people work.

Researched and written by a blue-ribbon panel that included many ethics and compliance officers from major companies, as well as lawyers and scholars, the April 2016 report -- Principles And Practices Of High-Quality Ethics & Compliance Program -- highlighted five principles:

1 Make it strategic -- Integrate ethics and compliance into the organization's business strategy. That means, for example, giving the ethics office sufficient resources, independence and access to both senior leadership and the board.

2 Plan around risk -- Risks are identified in a continuous process and assigned to so-called "owners" who are accountable for managing them.

3 Make leaders responsible -- "Leaders at all levels across the organization build and sustain a culture of integrity," the report concludes. For example, executives are expected to "personally act with integrity and are held accountable if they do not."

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4 Encourage reporting -- An organization with an effective ethics program "protects and values the reporting of concerns and suspected wrongdoing," the authors say. This means, for example, that "raising difficult issues is expected and recognized as excellent performance."

5 Enforce accountability -- "The organization takes action and holds itself accountable when wrongdoing occurs," the report concludes. This includes being as transparent as possible in internal communication. For example, senior leaders may regularly talk about incidents that have occurred and how violators were held accountable.

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