Question

Explain how and why the compliance and ethics programs of most companies fall short of addressing global business ethical responsibilities

Answer 1

Currently, most corporations ' enforcement and ethics systems fail to address the core obligations of multinationals — such as training their employees or producing high-quality products— let alone such vexing problems as how to stay competitive in markets where competitors follow different rules. Instead of stepping up their emphasis on compliance, organizations must apply the same success strategies and principles they use to control quality, creativity, and financial results to business management. Leaders need a global standard-based approach, guided by quantitative data, based on the business context, and focused on optimistic objectives.

Generally, those at the top of the corporate hierarchy have a more positive view of the actions of their businesses. For the majority of metrics, respondents who described themselves as corporate or division-level managers registered narrower differences between "should" and "do" than those who identified themselves as middle managers, junior managers, or non-managers. Regarding employee-related issues, the altitude impact was most pronounced, but it was also strongly proof of basic standards of corporate ethics such as fair dealing and promise keeping and basic standards of human welfare such as health and safety security.

A traditional compliance program includes elements of best practice— from a specified set of standards and rules of conduct to a system of enforcement and supervision that goes all the way to the board of directors, often through the audit committee of the board or a compliance committee. Organizations that implement these systems disclose their requirements to staff, appoint ombudsmen, set up confidential hotlines, and develop mechanisms for monitoring and auditing to prevent code violations and risks. Through tracking the causes and the suspects, they are quick to respond to violations.

Managers also need to look at core business and organizational issues and develop a performance-improvement plan tailored to those specifics using the full range of management tools at their disposal— from product, process and plant design to employee training, growth and motivation; marketing strategy; public relations; and community engagement. Leaders need to shift the context in which people work. To do so, the tasks undertaken by the traditional compliance and ethics role will need to go well beyond them.