The LRN ethics and compliance risk management practices report

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EXECUTIVE SUMMARY Another critical step forward is that organizations appear to recognize the importance of making their ethics and compliance programs compelling, engaging, and comprehensive from the boardroom to the break room. • Boards of Directors are increasingly involved in participating in educational activities and monitoring the ethics and compliance actions of their companies. • Senior leadership, management and supervisors are being educated on the responsibility of being the preferred channels for reporting violations, and with it, the importance of awareness and education for their direct reports. • Employees require that education be relevant to their work and learning style. As a consequence, we witnessed an emerging trend toward interactive educational learning methods such as interactive gaming and facilitator-led workshops to appeal to today’s workforce. With increasing numbers of Millennials joining companies, organizations will need to offer more comprehensive, blended educational methods. We have seen businesses make significant steps toward an optimized approach for managing ethics and compliance risks. Nevertheless, a concerted effort is needed to make the leap from a reactive approach to a strategic, values-based program that increases awareness and understanding of governance, risk management and compliance issues across the enterprise for a competitive advantage. An integral component of enterprise risk management is to holistically build a strong control environment with a culture of corporate ethics, by defining, preventing, detecting, responding and evaluating as part of five key steps for building a sustainable compliance risk management process: • Define business ethics and corporate compliance risks to create a comprehensive risk profile. • Prevent ethics and compliance lapses/failures with hard and soft controls, including business ethics and corporate compliance training. • Detect noncompliance with the law, regulations, company code of ethics and corporate governance practice via multiple reporting methods. • Respond swiftly and publicly to allegations and potential violations. • Evaluate results and make continuous improvements. LRN | 2008 Ethics and Compliance Risk Management Practices Report | 4
EXECUTIVE SUMMARY LRN’s Approach to Ethics & Compliance Risk Management It is imperative that companies establish a well defined approach for managing their ethics and compliance program. LRN developed and refined this process incorporating over 14 years of experience and proven best practices. Working throughout the enterprise, each step is essential when developing a holistic approach to your program. PREVENT • “Tone at the top” • Online Education • Facilitated workshops • Communication DEFINE • Access risks • Align policies and porcedures to risks • Define risk profile • Map risks to job function DETECT • Controls for rapid detection • Employee certification • Self-reporting channels • Compliance auditing and monitoring EVALUATE • Metrics and benchmarks • Policies, practices and procedures • Reports and actions • System improvements RESPOND • Case identification, investigation and closure • Corrective actions • Root cause analysis • Communication resolution Ethics & compliance risk management process LRN | 2008 Ethics and Compliance Risk Management Practices Report | 5
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The LRN ethics and compliance risk management practices report

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