Brands and businesses need to be paying even more attention to their ethics and compliance (E&C) efforts to ensure resilience and optimal performance, especially as global economic and geopolitical threats loom large, asserts new research from ethical culture firm LRN Corporation.
The 2023 edition of the firm’s E&C Program Effectiveness Report reveals that 85 percent of respondents report their ethical cultures were stronger as a result of their experiences meeting the challenges of the past year, with more than half giving their executives high marks for taking ethical considerations into account in business decision-making.
More widely, a majority of respondents (84 percent) said their organizations relied on values, rather than rules, to motivate their employees to “do the right thing.”
Obstacles to program effectiveness:
Other notable findings from this year’s report:
- Only a quarter (25 percent) of respondents said that they plan to enhance their trade controls and sanctions training and just under half (45 percent) have strengthened risk controls in this area
- Most respondents (60 percent) felt that their board of directors actively ensures that executive misconduct is effectively addressed, with three-fifths reporting that their organization has formal requirements to take into account executives’ and employees’ ethical behavior in performance evaluations, promotion decisions, bonus awards and hiring for key control functions
- More than two-fifths (44 percent) of respondents say that their organization has disciplined or terminated the employment of a senior executive or top performer for unethical behavior in the past year—with three quarters (76 percent) of those respondents saying that the individual was subject to financial “claw back”
This report is based on survey responses from more than 1,850 ethics and compliance professionals at companies and organizations with at least 1,000 employees, across 26 industries and in 10 different countries – making it the largest and most comprehensive research of its kind.