STRIVE FOR EXCELLENCE: BUILDING A STRONG ETHICS AND COMPLIANCE FUNCTION
Business ethics is viewed with moral suspicion in the minds of many – an unfortunate by-product of regular salacious headlines highlighting crimes and misdemeanours perpetrated by a number of the corporate elite.
As a consequence of such negative perceptions – warranted or not – it can be a challenge for companies to establish an ethics and compliance function across the length and breadth of their organisation. This often complicated and time consuming task requires buy-in from a range of stakeholders, such as investors and regulators.
In a domestic context, building an effective function – one that can accommodate constantly changing laws and regulations, changes to company structure, as well as a seemingly never-ending list of third parties, each with their own degree of potential risk – is daunting in and of itself. For those companies that run global ethics and compliance programmes, the difficulties and risks multiply exponentially.
“Compliance is a global concern,” concurs Sterling Miller, senior counsel at Hilgers Graben PLLC. “Corporations can no longer focus solely on their home base, they need to be aware of compliance issues in every country where they operate or, more importantly, where their products and services can be found. Regulators are taking aggressive positions around the extent of their jurisdiction, which can come as a surprise to some companies. Smart enterprises are putting more resources and people into a compliance programme, as its cost is usually far less than the cost of dealing with a problem.”
Ideally, a compliance-driven ethics function should promote ethical standards while enhancing the working environment – addressing fundamental risks residing at the apex of business success and stakeholder value. In an increasingly complex and uncertain world, companies simply cannot afford to stint and settle for second best. On the contrary, they should be striving for excellence.
Oct-Dec 2020 Issue
Fraser Tennant