Today’s guests are Jon Feig and Andy Reisman, who both work in the Integrity section of Ernst & Young. They are part of a group that published an article in Fraud Magazine entitled: What’s your integrity agenda? Bridge the gap between intentions and behavior, which was an astounding piece in the area of innovation and compliance. What is integrity in an organization? Why do companies need to confront integrity risks directly? Andy defines integrity around actions: bridging the gap between the promises a company makes to act ethically, and its actual behavior to the stated promises. The main question is: “Are we doing what we said that we would do?”
What is the issue of compliance?
It’s both an art and a science. There are policies, systems, programs, and processes that control the integrity agenda. And these have to relate to helping leaders face issues and not shy away from tough questions and establishing compliance officers as trusted advisors. These pieces sit together as four interrelated elements of the integrity agenda.
The four elements of the integrity agenda
- ‘Governance’ is where it starts. It makes sure that integrity function design is present, roles and responsibilities are outlined, and that there exists a proper vision mission to ethical obligations. Jon goes into more detail about what questions the ‘Governance’ element answers to ensure the business is accountable.
- ‘Culture’ asks: do you have open and transparent communication? Does the organization feel protected? People should feel like they can talk to management about things that may be wrong or that they don’t like. Research shows that people want to do the right thing, and the culture needs to support that.
- ‘Controls and Procedures’ covers things like third-party due diligence and management, identifying what characteristics may come forward through technology-enhanced procedures and data analytics about performance, and making sure there’s continuous improvement of controls.
- ‘Insights’ is a broad category, but its main question is: “Where is it that we’re trying to go and how can we find insights from whatever data exists?” It looks at the data from the above three categories and tries to prevent and detect problems. Jon digs deeper into the different questions and problems clients face, and how insights might help them uncover the answers and understand what’s possible.
Final thoughts:Andy shares that the anti-fraud professional (whether a fraud examiner, an auditor, or a compliance professional) has made a commitment. They care not only about the losses to the company, but about ethical lapses that could corrode the culture of the company and undermine it. They understand the purpose of protecting the company, keeping it on course, separating those who are truly bad apples, guiding people who may be under conflicting partners, and empowering people.
Jon leaves us with the compliance dilemma: how do we comply with various laws and regulations, as well as company policies and codes of conduct with decreasing budgets and higher scrutiny? It’s a very difficult position for compliance professionals to be in. So how do we use the integrity agenda to help solve the compliance dilemma?
(Authored by Vince Walden, Eugene Soltes, Jon Feig, and Andrew Reisman in the September/October 2018 issue of Fraud Magazine)