How can you work to operationalize the Code of Conduct as articulated in the Department of Justice (DOJ) Evaluation of Corporate Compliance Programs? The Evaluation focuses not on whether a company has a paper compliance program but whether a company is actually doing compliance. A company does compliance by moving it into the functional business units as a part of an overall business process. That is what makes a compliance program effective at the business level. There are several different parts of the Evaluation that touch upon your Code of Conduct.

Prong 2, Senior Leadership and Middle Manage states the following:

Shared Commitment What specific actions have senior leaders and other stakeholders (e.g., business and operational managers, Finance, Procurement, Legal, Human Resources) taken to demonstrate their commitment to compliance, including their remediation efforts? How is information shared among different components of the company? 

The Code of Conduct process should involve these corporate disciplines. Your Code of Conduct should enshrine your company’s values. Those are set by senior management and their input and support for any Code of Conduct project, whether initial draft or update, is critical.

Prong 4, Policies and Procedures states the following:

Designing Compliance Policies and Procedures What has been the company’s process for designing and implementing new policies and procedures? Who has been involved in the design of policies and procedures? Have business units/divisions been consulted prior to rolling them out? 

This question gets to the heart of operationalization and demonstrates how a Code of Conduct can work to meet the DOJ requirements. As an early part of your design and drafting process, you should assemble a cross-functional team. This is important for several reasons. First diversity in your team will help produce a more well-rounded final product. But having such team diversity will also assist in your benchmarking effort, coupled with those who are going to help you out looking at designs and maybe helping forge the design of the Code. Finally, you can use a group to help in the drafting, redrafting and editing process. This diversity will help you to answer all of the three DOJ questions from the Evaluation in a manner consistent to support operationalization.

This project team diversity will also help to operationalize your Code of Conduct after implementation. You will have various business unit members invested in your new or revised Code of Conduct. This ownership will help not only in your internal marketing but demonstrate to employees the commitment to doing business ethically and in compliance to your entire workforce.

Prong 6, Training and Communication, states:

Form/Content/Effectiveness of Training Has the training been offered in the form and language appropriate for the intended audience? How has the company measured the effectiveness of the training?  

There are several different types of training, including live, interactive and online training. But in addition to training, your Code of Conduct can form the basis of ongoing communications throughout the organization. Through a Code of Conduct, a company has acknowledged certain risks and it can communicate those risks through effective use of a Code of Conduct. It can also serve as a jumping off point for training and communications about more focused topics and discussions led by employees outside the compliance department.

You can measure the effectiveness of your training through a variety of mechanisms including knowledge assessments, culture surveys, focus groups, tracking your internal intranet training, reporting of trends and even hotline calls. These techniques can help to drive compliance into the very fabric of your company by operationalizing compliance. Another important consideration around effectiveness for training, and the text of the Code of Conduct, is translations, or as the DOJ stated, “Has the training been offered in the form and language appropriate for the intended audience?”

Three Key Takeaways

  1. What has been the role of senior management in the creation or update of your Code of Conduct?
  2. How have you worked with employees outside the compliance function to lay the groundwork for fully operationalizing your compliance program?
  3. How have your measured the effectiveness of your Code of Conduct training?

 

This month’s sponsor is the Doing Compliance Master Class. In 2018 I am partnering with Jonathan Marks and Marcum LLC to put on training. Look for dates of one of the top compliance related training going forward.

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