The Effect of an Ethics and

Compliance Program
Promoting a Positive Ethical Environment

Industry Facts
1. Issues faced by
companies
2. Effects on corporations
3. Ensuring an ethical
workplace

Primary
Research
1. Internal controls and
policies
2. Management and
employee training
3. Dealing with issues of
non-compliance

Recommendations

Industry Facts
Issues faced by companies

Issues Faced by Companies

Deceptive sales practices

Unsafe working conditions
Mishandling of confidential information
Discrimination
Sexual Harassment

Deceptive Sales Practices

Misrepresenting promotions/upselling
Not informing about policy/pricing changes
Not disclosing all contract information
Making promises that cannot be kept

Unsafe Working Conditions

Reduces illness/injury rates by at least 20%
Returns $4 to $6 for every dollar invested
Boosts employee morale

Mishandling Confidential Information

Only viewed by authorized individuals

Apply the need to know principle
Password protect information
Continuously change passwords

Discrimination
Anti-discrimination policies should:
Explain/define discrimination
Inform employees it will not be tolerated
Show employers how to respond
Cover all forms of discrimination

Sexual Harassment
Unwelcome verbal or physical sexual
attention
Inappropriate language
Suggestive jokes
Unwelcome touching

Industry Facts
Effects on corporations

What are the effects?

Turnover rates
Absenteeism
Public Image

Turnover Rates
Turnover costs range from 25% to 200%
annually
1 in 3 employees have ended their
employment due to ethical issues

Absenteeism
17% higher in companies with fair or poor morale
Fear retaliation as response to expressing concerns
Increased chances of employees calling in sick to
work

Public Image
Establish a companys reputation
Attractive to investors and consumers
Social responsibility

Industry Facts
Ensuring an ethical workplace

Steps in Reporting an Issue

Document Evidence
Report to Superiors
Contact Ethics
Department
Report to Human
Resources
Data source:

Training Programs
Online
Modules

Inexpensive
Least effective

Print
Material

Moderately expensive
Moderately effective

Face-to-Face
Source:

Most expensive
Most effective

12 Ethical Principles
Honesty
Caring

Integrity

Fairness

Keeping
Promises
Loyalty

Source:

12 Ethical Principles
Respect
Accountable

Law Abiding

Morale

Excellence
Leadership

Source:

Steps to Ensure Effective Program

Clear code

Continuous
communication

Enforce in
uppermanagement

Data source: Barman and

Retrain and
reinforce

Provide
practical use

Benefits
Employees

Source:

Management

Guide

Loyalty

Morale

Employees

Pride

Environment

Loyalty

Legalities

Primary Research

EMPLOYMENT DURATION OF SAMPLE

Over 10 years; 11%

Under 1 year; 23%

Between 6 and 10 years; 20%

Between 1 and 5 years; 46%

Source:

Internal controls and policies

Management and employee training

Dealing with issues of non-compliance

Internal Controls and Policies

Effectively addresses:
Trust, honesty, and accountability
Confidentiality
Discrimination
Employee behaviour

EMPLOYMENT DURATION OF EMPLOYEES UNAWARE OF PROGRAM

7
6

Only 69% are aware of program!

0

Source:
Primary

Internal Controls and Policies

1
7

Source:

Used
Not used

Internal Controls and Policies

59% of 17
Used and
satisfied
Used and
unsatisfied
Not used

Source:

Training
Management

Annual online training

modules
64% of employees believe
management is well-trained
Approachability
Fear of retaliation

Company-wide

75% of employees want

regular training

Issues of Non-compliance
11 respondents have purposely not followed policies.

Management rarely receives complaints.

Does not mean breaches do not exist!

Recommendations

Training Program
In-person training sessions
Increase employee
awareness
Should be led by
managers
Manager training
Follow the 12 ethical
principles

Honesty, integrity, promisekeeping, fairness, caring,

loyalty, respect for others,
obeying the law, committing to
excellence, leadership, morale,
and accountability

Reporting Issues
81% aware of procedure
Streamline current process
Document
Evidence

Report to
Supervisor

Contact
Ethics
Department

Ethics helpline
Significant benefit

Explain investigation
Follow-up

Report to
Human
Resources
Data source:
Richards

Industry Facts
1. Issues faced by
companies
2. Effects on corporations
3. Ensuring an ethical
workplace

Primary
Research
1. Internal controls and
policies
2. Management and
employee training
3. Dealing with issues of
non-compliance

Recommendations

Works Cited

Barman, Tanya, and Samantha White. "Implementing an Effective Corporate Ethics

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Discrimination." Nolo. Nolo, 1 Oct. 2012. Web. 18 Nov. 2014.
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Works Cited

"Human Rights Policy: Preventing Discrimination in the Workplace." B.C. Human

Rights Coalition. AMGMedia Works Inc., n.d. PDF. 20 Nov. 2014.
Investopedia. "Sarbanes-Oxley Act of 2002 (SOX)." Investopedia. Investopedia,
LLC, n.d. Web. 29 Nov. 2014.
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Josephson Institute Reports."The Hidden Costs of Unethical Behaviour." Business
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Mohr, Angie. "5 Most Publicized Ethics Violations by CEOs." Investopedia.
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Works Cited

Nelson, Debra L., James Campbell Quick, Ann Armstrong, and Joan Condie.
"Challenges for Individuals." ORGB. Canadian ed. Toronto: Nelson Education,
2012. 30-67. Print.
Nish, Steve. "Ten Benefits of Having an Ethics Code." Business Ethics and
Leadership. Wordpress, 30 Dec. 2013. Web. 25 Nov. 2014.
Richards, Francine. "How to Report Unethical Behavior in the Workplace." The
Nest. Demand Media, n.d. Web. 27 Nov. 2014.
Serviere-Munoz, Laura, and Michael L. Mallin. "Protect and Prevent:
Neutralizations and Unethical Sales Behavior." Baylor Business. Baylor University,
1 Sept. 2014. Web. 17 Nov. 2014.
"Why Is Safety Important?" Safety Management Group. Safety Management
Group, n.d. Web. 19 Nov. 2014.