When reviewing an organization’s ethics and compliance (E&C) program, regulators look to codes of conduct to ensure that policies and procedures are up-to-date, accessible and that they really reflect the business. Yet a surprising number of companies with otherwise robust E&C programs leave themselves vulnerable on the code of conduct front. A sound benchmarking framework can help you assess the quality of your company’s code of conduct and determine whether it’s time for a refresh.
Publicly traded companies have been required to adopt and disclose codes of conduct since 2004. Initially, many codes of conduct were created primarily to meet “check the box” regulatory obligations, rather than empower employees to do the right thing when faced with ethical dilemmas. As a result, early versions of codes were boilerplate legal documents filed with a stock exchange and then often pushed aside.
During the past 20 years, codes of conduct have evolved in tandem with both Federal Sentencing Guidelines and a growing awareness that well-designed codes of conduct programs mitigate risk by reinforcing a culture of ethical decision-making. The U.S. Department of Justice (DOJ) continues to place increasing emphasis on the scope, substance, and dissemination of company codes and companion training. At this point in time, from the DOJ’s point of view, codes of conduct serve as a bellwether of overall ethics and compliance program effectiveness.
In this paper, we’ll highlight new standards in codes that are emerging in the face of updated DOJ (and other) guidance and maturing compliance practices. We’ll also share our framework to help you determine how your company’s code stacks up against today’s expectations from regulators (including the DOJ), employees at all levels, and outside parties who may review it.
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