Heightened corp-behavior awareness elevates ethics concerns—key issues to watch

by | Apr 30, 2019 | Public Relations

With reputation sensitivity on red alert these days, companies have to tread lightly though controversies like data breaches, questionable sales practices and organizational misconduct—and ideally end them once and for all. New research from audit and advisory network KPMG reveals a cross-industry consensus that enterprises need to better detect and prevent ethical misconduct by enhancing key compliance areas—particularly investigations, monitoring and testing, due diligence and governance.

The new report, KPMG’s 2019 CCO Survey: Insights for the future of ethics & compliance, points out that most organizations, regardless of industry, are taking ethics and compliance risks seriously. Based on a survey of 220 chief ethics and chief compliance officers (CCOs), the report identifies mature ethics and compliance areas and offers guidance for improvement where necessary.

Heightened corp-behavior awareness elevates ethics concerns—key issues to watch

“There is a growing consensus regarding the key areas organizations need to focus on and enhance, not only in ethics and investigations, but also on the maturity of ethics and compliance programs,” said Amy Matsuo, KPMG principal and Regulatory Insights national leader, in a news release. “This is likely driven not only by a commonality of risks, but also converging business models.”

Top five areas where CCOs plan enhancements to their enterprise-wide ethics and compliance activities:

  • Investigations (65 percent)
  • Monitoring and testing (65 percent)
  • Data analytics (32 percent)
  • Regulatory change management (32 percent), and
  • Reporting and data visualization (32 percent)

Heightened corp-behavior awareness elevates ethics concerns—key issues to watch

The report found that Board of Director engagement in ethics and compliance oversight and supervision is strong, and that business line accountability for ethics and compliance is well-established. However, it also said the ethics function continues to need to work on achieving a “trusted advisor” relationship with the business front lines.

KPMG’s compliance program framework:

Heightened corp-behavior awareness elevates ethics concerns—key issues to watch

The research provides insights and suggestions that organizations can implement for more integrated and effective investigations programs in the areas of people and skills, process and data analytics, and technology, including:

  • Revamping investigations processes, case management, reporting and communication
  • Embedding accountability via ethics- and compliance-driven employee metrics
  • Continuing to drive integrated governance and reporting across Ethics & Compliance, Legal and Human Resources departments
  • Evaluating available data and the integrity of that data for use in predictive analytics enterprise-wide
  • Establishing guardrails and new risk processes for evolving business digitization, data analytics, and automation
  • Investing in technology and/or tools to drive greater data access, quality and automation to compliance monitoring, testing and enhanced data analytics
  • Continuing enhancements to scans and the inventory of regulatory changes and dynamically link to associated operational controls
  • Elevating and/or redesigning ethics and compliance to integrate with business operations

“Increased public awareness and regulatory focus—along with market pressures for greater agility and real-time responsiveness to identify misconduct—are driving organizations to improve their investigations function,” Matsuo said. “Integrating investigation activities more closely with ethics and compliance risk management by enhancing investigation reporting and investing in new technology, such as AI, can help to consistently identify and analyze root causes and trends and improve the production of investigation resolutions.”

Download the full report here.

Heightened corp-behavior awareness elevates ethics concerns—key issues to watch

Heightened corp-behavior awareness elevates ethics concerns—key issues to watch

The KPMG CCO survey was completed in January 2019. The survey asked chief ethics and chief compliance officers for their views on key areas of ethics and compliance focus and integration, as well as key program maturation areas relative to KPMG’s proprietary Compliance Program framework. Participants operate in the following industries: consumer markets; energy and natural resources; financial services, including banking, capital markets and insurance; healthcare and life sciences; industrial manufacturing; and technology, media and telecommunications.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter