An Ethics and Compliance Programs is a set of principles, norms, and procedures aimed at establishing guidelines for the conduct of employees, who represent an organization’s most valuable asset.
This program is based on honesty, ethics, compliance, commitment, and respect towards owners, shareholders, employees, and stakeholders related to the organization.
A fundamental part of ethics and compliance programs is the ability to make decisions that align with these principles, and fulfilling them is considered an action guided by ethical and moral principles.
For these policies to be effective, it is essential that they have clear procedures, effective communication, and an organizational culture that supports them at all times.
What are ethics and compliance programs?
The implementation, measurement, and evaluation of Ethics and Compliance Programs allow organizations to demonstrate to society and their community the level of health in administrative, operational, financial, labor, commercial, and image-related aspects defined as Corporate Governance in recent years.
The objective is for all organizations, large or small, to follow the international guidelines of the Organization for Economic Cooperation and Development (OECD) and the laws of each country in their business.
Ethics and Compliance Program Officer may also receive support from relevant Compliance areas to carry out the performance of their duties and will be responsible for performing the following functions within their activities:
- Implement internal policies, procedures, and protocols to manage conduct and compliance risks, following the framework policies for risk management, anti-fraud, and anti-corruption.
- Create a verification process for regulatory compliance, focused on the main legal obligations identified within the organization, based on materiality criteria, risk level, or similar.
- Implement continuous training programs to raise awareness within the organization about ethical and compliance risks.
- Systematically document the ethics and compliance program, allowing for tracking of its execution.
- Incorporate monitoring indicators to monitor and measure the implementation of the ethics and compliance program.
- Present written periodic reports to the Ethics Committee on the management of conduct and compliance-related risks, in line with the Framework Policies for Risk Management, Anti-Fraud, and Anti-Corruption, among others.
- Evaluate reports submitted by the internal auditor and other third parties and take appropriate measures to address reported deficiencies.
These programs aim to regulate the behavior of the governing and administrative bodies of organizations, including:
- Shareholders.
- The board of directors.
- Senior management.
- Employees.
- Third parties related to the organization.
To achieve this goal, policies and procedures are created based on OECD principles and country laws to establish transparent business relationships within a clear legal framework. It is essential for modern global business relationships.
How to design this kind of programs?
It is necessary to include various ethical activities in compliance programs, such as bribery prevention, data protection, human rights, occupational safety, product quality, human resources management, legal compliance, and corporate social responsibility.
The following elements are important to consider when defining a successful compliance program:
Risk assessment in the organization:
Comparing risk maps and profiles with audit or risk management reports requires detailed reports and discoveries from expert organizations that help analyze the assessment and scope, and identify areas to be corrected.
Commitment of Senior Management and Board of Directors:
It is important to understand the senior management’s stance on the risk landscape, analyze compliance policies, and understand strategic objectives, achieving their effective commitment through the implementation of compliance policies and procedures.
Structure the compliance program guidelines to make it operational:
Establish SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) policies and objectives, avoiding lengthy or ambiguous statements, and seeking transformational statements that attract people’s attention.
Measure and monitor:
It is important to adjust according to results, for example, monitoring expenses, periodic evaluations of the compliance system, analysis of audits, compliance training, and monitoring of reports in the whistleblowing channel.
Define accountability mechanisms and sanctions:
Defining violations and illegal behavior discourages employees and makes them aware of the implications of their conduct. The compliance team must differentiate between incidents and crimes, reporting and treating them legally.
Define structure, Corporate Governance and Compliance Team:
The integration of business units and the corporate governance model saves resources and improves management. Assigning cross-functional roles integrates more and improves the business’s vision, increasing compliance productivity.
Develop a roadmap:
Defining the roadmap of business units and improving compliance involves aligning them with corporate needs. Addressing the most urgent issues in stages and providing appropriate training and awareness is an effective strategy.
How important is Research Compliance?
Compliance helps prevent misconduct, criminal behavior, and effectively comply with external regulations, internal policies, commitments to third parties, and ethical codes.
Within an organization, Compliance plays three essential roles:
- Prevention seeks to prevent situations of non-compliance by early identification of associated risks and implementation of controls to minimize their likelihood.
- Detection involves discovering failures or deficiencies in established controls designed to prevent non-compliance risks. Once such failures are identified, it is crucial to adjust or implement new controls.
- Notification aims to timely and regularly communicate updates in regulations, risks derived from non-compliance, and measures to improve the compliance system to company executives.
Ethical and business conduct
Business ethics encompasses a set of principles and rules that guide the performance of an organization in the business realm, based on morality to differentiate between what is right and what is wrong.
Likewise, it is governed by ideals and values, and its application encompasses all aspects of the organization, including the individual behavior of its members.
Business and professional ethics of employees increase the value of the organization for customers and collaborators, ensuring quality and trust in the services or products offered.
EthicsGlobal and its differentiating value
At EthicsGlobal, we strive to create a culture of ethics and compliance based on corporate governance, adhering to best practices through prevention and detection of unethical conduct.
We have developed practical tools and systems that offer our clients the possibility to work in highly customized environments.
This includes various aspects such as questionnaires for reporting, applications, protocols, communication channels, user structures, corporate branding, and more.
The multiple benefits of using EthicsGlobal’s services include:
- Improvement of working conditions for all employees.
- Encouragement of individual development and respect for colleagues.
- Continuous improvement based on suggestions to enhance organizational processes.
- Establishment of brand recognition and trust in the market.
- Prevention of economic losses due to unethical behavior.
- Significantly reduces fraud and corruption within organizations.
Our aim is to promote a moral culture in all areas, both internally and externally of each entity, with the goal of establishing principles of trust, transparency, intolerance to corruption, and honesty.
We invite you to learn about the Ethics Line that EthicsGlobal can implement in your organization according to its needs and characteristics. Contact our advisors – we are experts in what we do.
