66% of U.K. respondents reported that senior leaders integrated E&C considerations into their decision-making during the pandemic.
As we enter another year of the pandemic, more business leaders had to upgrade their ethics and compliance initiatives. Leaders say that their ethical culture is more potent as a result of the COVID-19 pandemic, according to the latest annual Ethics and Compliance Program Effectiveness Report from LRN.
But, while values and ethics helped sustain companies during the pandemic, new areas of concern have emerged. And, there is a significant gap between companies with high-impact ethics and compliance (E&C) programs and those with low-impact ones. The top-ranked programs were proactive, utilised available resources, and made their programmes more accessible to employees.
The report, titled “The 2022 Ethics & Compliance Program Effectiveness Report: Rising to the challenges of the new normal” comes from a survey of nearly 1,200 ethics, compliance, and legal executives and other professionals at companies from around the world. Most of the participants are from organisations with more than 1,000 employees. The annual report provides a benchmark to evaluate E&C programs.
Here are some of the key takeaways specifically from the U.K. market:
- 91% of UK E&C programs reported that their organisations’ ethical culture emerged stronger as a result of coping with the COVID-19 crisis. This is 11%-points higher than US programs and 9%-points higher than the global average. This is a striking and significant finding demonstrating the strength of UK programs.
- 83% reported making significant changes to meet the needs of employees working remotely. This is 10%-points more than US programs and 8%-points more than the global average.
- 71% reported that their middle managers increased engagement with employees to help them meet the challenges of remote work— 10%-points more than US programs and 12%-points more than the global average.
The research revealed that the top three areas of E&C programmes that improved in 2021 were: training delivery (45%), employee surveys (45%) and training content (33%). However, training delivery (32%), training content (30%) were also in the top three in need of further improvement as well as code of conduct (26%).
Although there were significant improvements in UK E&C programmes as noted above, the UK is behind the curve when it comes to assessing ethical culture. Global regulators increasingly highlight the importance of measuring a company’s “culture of compliance” and the example set by leadership, yet the majority of UK E&C programmes (58%) are still relying on employee engagement surveys with only a few E&C-related questions as their primary measurement of culture.
UK respondents reported significantly less frequent use of key metrics in evaluating their programmes’ effectiveness in comparison to global data and US data. Specifically, UK programmes were less likely to use or measure the following indicators to gauge programme impact and identify areas for improvement: employee engagement with ethics and compliance resources; root cause analysis for compliance lapses; misconduct trends and patterns; speaking out data and hotline complaints.
LRN’s research shows that an organisation dedicated to sustainable human values will exhibit superior performance across operations and be significantly more successful at integrating ethics and compliance into its day-to-day operations. Values-based governance is also a foundational part of ESG (environmental, social, and governance objectives), an area of increasing importance for organisations.
This key insight has been validated again and again during the ongoing COVID-19 crisis and racial and political unrest of the past two years. The pandemic, in particular, has challenged organisations to respond, adapt, and pivot to meet unprecedented challenges to their operations, the health and safety of their employees, and financial viability in a manner consistent with their values and culture.
In sum, UK E&C programmes weathered the COVID-19 crisis effectively, continued to strengthen their programmes, and helped employees cope with the consequences. Now that the dust has settled somewhat, UK programmes would benefit even further by bringing a greater focus on using data, drawn from a wide variety of sources, to guide continued programme attention and enhancement
Ty Francis MBE, Chief Advisory Officer, LRN Corporation said, “I think what’s important to note here is that out of all of the countries we’ve surveyed, the UK led the pack in taking an employee-centric approach in key elements of E&C programme design, delivery, and implementation.”
The 2022 Performance Effectiveness Report leverages LRN’s Performance Effectiveness Index. PEI is a proprietary framework for analysing the impact of E&C programmes to gain insight into ethical culture and how the programme works “in practice.” The report methodology differs from most surveys of E&C programs, as the majority focus on measuring activities rather than impact and ethical culture.
About LRN
LRN’s mission and purpose is to inspire principled performance and help people around the world do the right thing. Since 1994, LRN has worked to propel organizations forward with the partnership, knowledge, and tools to build an ethical culture. More than 1,000 companies and 30 million learners worldwide utilize LRN services and take LRN e-learning courses to help navigate complex regulatory environments and foster ethical, responsible, and inclusive cultures. In partnership with LRN, companies translate their values into concrete corporate practices and leadership behaviors that create a sustainable competitive advantage. By acting upon shared values, companies and their people find the means to outbehave and outperform. Learn more at https://lrn.com and follow on Twitter, LinkedIn, and Facebook. For more insights from LRN on ethics, compliance, corporate culture, and reputation subscribe to our newsletter and look for the Principled Podcast by LRN wherever you get your podcasts.