Compliance is expensive. But non-compliance can cost you even more. Businesses paid nearly $26 billion in compliance-related fines globally in 2017, aside from the severe reputational damages that accompanied those monetary losses. That’s according to a recent article in Forbes by Julie Myers Woods, CEO of Guidepost Solutions.
All global companies should have a comprehensive compliance program in place, says Myers Woods, but the program’s success depends on individual employee behavior worldwide. That means establishing a universal culture that recognizes positive contributions and encourages ethical behavior every day. It also means empowering front line employees everywhere in addition to management to help enforce the policy.
Myers Woods says there are three pillars to making this reality.
#1: Establish Clear and Actionable Company Principles – 3M, for instance, has established a six-principle Code of Conduct to govern its operations globally. The code is easy for all employees to understand and follow.
#2: Reward Ethical Behavior at All Levels – Leaders are expected to set the tone and lead by example, but they should also recognize managers and others who embody the company’s mission statement or have made sound ethical choices.
#3: Hold All Employees to the Same High Standards – The approach to compliance and ethical conduct, especially in multinational companies, must be consistent across the entire enterprise. Anything else is problematic and leaves your organization open to substantial risk.
To learn more, read Myers Woods article “Establishing a Global Culture of Compliance” in Forbes. And find out how MCO can help companies better identify and manage potential Conflict of Interests.