A critical element for any organization to thrive over the long-term is a well-supported and robust ethics and compliance program.
This ethics and compliance program must be focused on ensuring that every member of the team, across the enterprise, is reading from the same page when it comes to a culture of:
- Legal Compliance
As a four-time World’s Most Ethical Company honoree, a recognition made possible by the daily commitment of our entire global team to conducting business with ethics and integrity, here are a few things we’ve found at Kennametal to be successful in maintaining organizational focus on ethics and compliance:
Culture is Key
If instilling ethics and compliance is little more than an on-boarding exercise for new hires, your company will never sustainably instill the tenets of a culture of ethics and integrity across your enterprise. Indeed, your commitment to the mission of operating your business along ethical lines will only succeed if this enterprise-wide commitment is established and continually maintained at all levels of the organization, including by the executive management team. Embedding core principles throughout every aspect of the business decision-making practices underscores that every employee is responsible for picking up the company’s ethics mantra and entwining the concepts in everything that they do on behalf of the firm.
Encouraging a “speak up” culture from the lowest levels of your organization, to the CEO, is a core part of a successful ethics and compliance program.
Embedding this mindset across the organization is essential to a healthy culture of ethics. Empowering all team members to “speak up” not only helps manage compliance risk, but can also yield dividends in driving corporate innovation and employee engagement.
Clear and Simple Communication
Communication is the lifeblood of any relationship.
Therefore, a company’s Code of Conduct, a bedrock ethics and compliance document, must be as clear, concise, and engaging to employees as possible.
Best practices suggest that a Code of Conduct be written with an eye towards simplicity. Rather than utilizing overly legalistic terms, and employing complicated wording, a successful Code of Conduct outlines company expectations, and portrays the firm’s guidelines in clear and relatable language. Employees should be referred to specific policies and procedures for more complex issues or additional guidance. The Code of Conduct is not an all-encompassing document.
The language should address the challenges that your employees will face in their positions whether designed to guide their conduct with co-workers, or the myriad of interactions that governs their professional relationship with customers, suppliers, vendors, shareholders, and community stakeholders.
Tearing Down Silos: Cross-Functional Approach
While functional silos may exist within your corporate structure, there remain opportunities for taking cross-functional approaches to building a strong and effective ethics and compliance program. Assessing emerging risks, effectively communicating with employees, and establishing effective mitigating strategies are all best accomplished when utilizing a cross-functional approach. Cross-functional relationships also serve as a key force-multiplier to embed a culture of ethics and integrity into enterprise-wide business processes.
Today’s complex ethics and compliance issues are best confronted by a collaborative cross-functional approach.
Indeed, from human resources to the information technology department to the firm’s legal team, an array of teams exists that are natural cross-functional platforms and collaboration points. This approach will amplify your program’s success and facilitate more effective and focused risk management strategies.
Benchmark, Benchmark, Benchmark
Taking the time to compare your ethics and compliance program to programs outside your organization is a necessary and valuable exercise to identify opportunities for improvement.
This process also helps focus resource and personnel deployment to the program elements most in need.
At Kennametal, we regularly benchmark our ethics and compliance program against best in class and world class organizations. In addition to the comparative benefits, benchmarking often provides useful insights to help keep your ethics and compliance program fresh, current, and engaging for employees.
Did we catch your attention?
Rewind to our last article, featuring “How To: Use Analytics to Grow Your Ethics & Compliance Program” and revisit our entire Ethics Series with past articles including: The Culture of Ethics, Breaking Down the Basics, Corporate Citizenship and Responsibility, and Reputation, Leadership and Innovation in Ethics.