Question

In the past, SHR has relied on a collection of individual policies to communicate its expectations regarding
compliance with laws, regulations, and internal operating practices. The senior vice president – legal, who
also is designated as SHR’s CCO, has determined that the company has grown to a size and operating
complexity necessitating an integrated code of ethics and business conduct (the “code”). He has assembled
a team consisting of personnel from the legal, human resources, and internal audit functions to develop
this code.

Scenario 1 Activities
1. Explain why it is important to include representatives from the legal, human resources, and internal
audit functions in the development of the code. What other areas of the organization, if any, should
also be consulted when developing the code?
2. Based on the background and case facts describing SHR Corporation’s business, identify the types of
laws and regulations that the company is subject to and should consider for inclusion in the code.
3. Develop an outline for SHR’s code listing the sections that should be considered to create a robust,
comprehensive code. There is no need to develop any of these sections; simply create the outline.
4. Describe ways for communicating the new code and providing the necessary training to employees
and new hires.
5. There are other key elements to an effective compliance and ethics program. Discuss the value of the
following:
a. Annual certification of compliance.
b. Whistleblower hotline.
c. Escalation and investigation process.
d. Disciplinary action process.
e. Compliance program audits.

Answer 1

Answer to part: 1.

In any organization, legal compliance, human resource and audit function is a pillar of the entity and must comply and follow all aspect related to these areas. While developing a code all legal aspect should be considered so that it can not generate any problem in future related to legal aspects. Human resources is most important for any organization and can’t run without it, so developing a code it must be considered all aspect related to human resources. Internal audit function is a function of finding out any loopholes, discriminations, internal control weaknesses etc. in the organization and therefor it is very important to considered advice from the internal audit personal so that it can consider all important aspect related to internal control of organization in the code. Other areas like Information Technology, Marketing etc. also be consulted while developing the code.

Answer to part: 2.

Law and regulation that SHR corporation should considered while developing the code based on its types of business operation. It should follows Corporate laws, Income tax laws, Employment and labor laws Environmental Regulations, any State laws as applicable.

Answer to part: 3.

The following outlines should be in code:

• The work environment
• Conflicts of interest
• Attendance and punctuality
• Absence without notice
• Protecting company assets
• General harassment and sexual harassment
• Dress code
• Use of tobacco products
• Internet use at work
• Cellphone use at work
• Anti corruption
• Be respectful

Answer to part: 4.

After developing the code it is important to make such code operational. To make effective of the developed code it must be communicated properly to employees and other stakeholders. It can should be communicated by way that employees and others should impress and follows it like arranging convocations, by pasting it on notice board, personally mail, text massages to their cellphone etc.

Answer to part: 5.

There are other effective compliance and ethics program discussed as follows:

1. Annual certificate of compliance: it is very important to comply the laws and regulations properly and get certificate by the appropriate authority that will help organization to boost moral of the employees and other stakeholders.
2. Whistleblower hotline: A whistleblower plays an important role in any organization. It exposes any kind of information or activity that is deemed illegal, unethical within an organization and help organization to overcome such thing by taking correct measures at right time.
3. Escalation and investigation process: it is the process which help organization to find out any incorrect activities and things going on.
4. Disciplinary action process: it help to prevent any indiscipline activity in the organization.
5. Compliance program audits: It is an important to get audit of compliance program. It helps to find out whether compliance is appropriate, effective and sufficient.