Sustaining an Ethical Corporate Culture

zEthics rapidly deploys innovative new diagnostic tools to actively engage employees as an independent 3rd party to help corporations and investment companies sustain an ethical corporate culture and improve performance.
By: Mark Rome
Dec. 22, 2010 - PRLog -- For the second time in a decade we’ve witnessed some spectacular corporate failures.

Most corporations and investment companies are successful at operating robust internal compliance programs to maintain high ethical standards and compliance with applicable laws and regulations.  However, due to recent corporate culture failures at a number of corporations and investment companies, the U.S. Congress has passed the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In the interest of shareholders and for the protection of investors, the U.S. Securities and Exchange Commission has recently proposed rules to implement the Whistleblower Bounty provisions of the Dodd-Frank Act.

In response, the National Association of Corporate Directors (NACD) has submitted a comment letter to the SEC requesting substantial revisions to the proposed rule, stating that such rules could jeopardize robust internal compliance programs.

In the meantime, attorneys are running advertisements at Manhattan movie theatres to entice Wall Street employees to file whistleblower complaints to report securities violations in hope of sharing the rewards for blowing the whistle on their employers.

In the center of this perfect storm are corporations and investment companies trying to navigate through one of worst recessions since the great depression.

So what’s the secret formula for sustaining an ethical corporate culture during tough economic times and new regulations?

The simplest answer is to actively engage employees in the process of sustaining an ethical corporate culture.  To engage employees in the process, you need a culture based on honesty, loyalty, mutual trust and respect.

The mere existence of a Code of Conduct or Ethics Code is no longer sufficient to demonstrate to organizational stakeholders that an ethical corporate culture exists or is effective.  Sustained ethical corporate culture can be achieved with a continual and systemized process to monitor, evaluate, and internally adjudicate those who engage in risk behavior that does not conform to the defined risk appetite and risk tolerance of the organization.  

Boards and Directors must identify, quantify, and mitigate cultural risk and play an active role in accepting or rejecting individual or group behaviors.  With respect to stakeholder relations, Boards and Directors must also consider how to substantiate their commitment to an ethical corporate culture by disclosing the method of measure and findings, and how results compare with other companies within their industry.

Many corporations and investment companies may have to turn to independent 3rd parties to provide the mechanisms to engage employees in the process, as a number of employees are hesitant to utilize the company’s Ethics Helpline.

It’s unfortunate that the masses have to pay for the transgressions of a few, yet there are options available to corporations and investment companies that did not exist just a few years ago.  Online diagnostic tools and new knowledge sources are now available to aid management in engaging employees to sustain an ethical corporate culture.

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zEthics actively engages employees as an independent third party to work in conjuction with internal compliance programs to capture whistleblower complaints. The zEthics corporate culture surveys and reports provide the organization the knowledge and power to validate and continually improve the integrity of the most important part of the internal control system – the people.

zEthics addresses a number of shortcomings in the market place to help corporations stay in compliance with applicable laws, rules and regulations - monitoring the effectiveness of internal compliance programs to prevent fraud and corruption.

zEthics Corporate Culture Benchmarks guide corporations in implementing change management strategies; incident management tools assure corporations that they have the right tools and the right team in place to manage risks; institutional investors have greater visibility into external investment managers.
Source:Mark Rome
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Tags:Sec, Whistleblower, Wikileaks, Nacd, Board of Directors, Ethics Helpline, Corporate Culture, Risk
Industry:Accounting, Business, Financial
Location:Sacramento - California - United States
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