In this episode Susan Divers, Senior Advisor at LRN returns to talk about LRN’s 2018 Program Effectiveness Report. Divers noted that in 2017, in its Evaluation of Corporate Compliance Programs and new FCPA Corporate Enforcement Policy, the DOJ refocused ethics and compliance programs on outcomes, not procedures. The 2018 Program Effectiveness Report demonstrates that, programs focused on values outperform those based primarily on checklists and rules. Divers believes this has only become more important in the wake of the Weinstein scandal and the #MeToo movement, as sexual harassment scandals continue to erupt in companies with programs that may well have codes of conduct and reporting procedures, but apparently lack traction in preventing and dealing with actual misconduct.

We discuss some of the Report’s key findings the most effective E&C programs – and the ones that meet the 2017 DOJ criteria engage in the following:

  • “Operationalize” ethics and compliance using principles and values that inform all organizational decisions, not just those made in a legal or regulatory context.
  • Ensure that the company analyzes the root cause of misconduct, rather than simply punishing misconduct.
  • Embrace accountability and transparency – even if it means holding senior leaders or successful performers fully accountable for their actions.
  • Make sure senior leaders, middle managers and boards of directors are engaged in preventing misconduct, and that the function isn’t left exclusively to lawyers or compliance staff.
  • Are continuously reviewed and improved to ensure they remain value-focused and effective in terms of influencing workplace behavior in a positive way.

Those which fall short have the following characteristics:

  • Fewer than half of the E&C professionals who responded – 49% – said senior leaders in their company get actively involved in and take responsibility and action in instances of compliance failures.
  • Only 38% said their organization’s leaders support appropriate sanctions or penalties on senior-level top performers involved in misconduct.
  • Only 43% said leaders consider E&C factors in business and planning decisions such as new business ventures, mergers and operations reviews.

For LRN Corporation’s 2018 Program Effectiveness Report go to: