Ethics and Compliance Issues: Deciding Where to Focus

When designing a compliance program, it’s important that organizations decide which risks to focus their attention on, from a spectrum of many possible issues. But how do they know they are focused on the right issues? According to a new report released by Deloitte & Touche LLP and Compliance Week— In Focus: Compliance Trends Survey 2013— the areas that ethics and compliance departments focus on can vary depending on the size of the organization, with smaller companies tending to focus more on tactical issues such as regulatory findings, while the larger ones said they focused on issues such as codes of conduct and ethical standards.

Deciding on the right issues “starts with understanding the size and scale of the operations, and the risk profile of the organization,” says Tom Rollauer, a director with Deloitte & Touche LLP’s Governance, Regulatory and Risk Strategies practice and executive director, Deloitte Center for Regulatory Strategies.  To do that, companies should “start with a comprehensive compliance risk assessment process. Given the risk profile of the organization, the program has to be tailored to meet those challenges and risks,” Mr. Rollauer adds.

Surprisingly, more than 40% of companies indicated that they do not use employee ethics surveys to measure compliance program effectiveness. “Companies should consider conducting such surveys annually—ideally using an outside party—to get candid results that can be studied over time,” says Nicole Sandford, national practice leader, Governance and Enterprise Compliance, Deloitte & Touche LLP. The survey also found that 62% of respondents outsource ethics hotline operations.

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