A strong corporate culture and open lines of communication go a long way when it comes to developing and running an ethical organization.
Ethics programs have been praised for the effect they have had on the engineering and construction (E&C) industry, shoring up the reputation of firms, and bringing stricter oversight and regulation of work practices.
But all ethics programs are not equal. In a firm dedicated to promoting lasting cultural change through the ethics program, reporting rates will be higher, and incidences of ethical violations will be lower. Conversely, it is possible to have in place the facade of an ethics program, and yet harbor a dishonest and retaliatory culture that discourages ethics reports. In this case, your last line of defense is your anonymous hotline.
The performance of your ethics program depends on how engaged your employees are with the company in general and ethics in particular. This in turn depends on how your company seeks out and responds to reports of ethical misconduct. Here’s a list of five ethics program best practices, and the reporting mechanisms that underpin them.
Continuous improvement: An informed executive team can make informed decisions about training, risk mitigation and management issues. The more intelligence they are able to gather through any means — employee feedback, questions, hotline reports — the better they can understand and proactively address the challenges of the workplace for their employees. Promoting an “open-door” policy is the easiest way to ensure a transparent ethical culture, and ensure policies are up to date, deterring fraud and dishonesty in the process.
Prepare your employees: Once a company makes ethics the lynchpin of its culture, customers, employees and contractors respect those standards. A holistic commitment to ethics, though driven by management, requires the entire employee base to be literate in the code of conduct and operational guidelines. Ongoing training, updated to reflect new risks, will impress upon employees the importance of ethics to the company, and their role within that structure.
Promote your hotline: While management may promote an “open-door” policy, the specifics of employee or hierarchical relationships may prevent a face-to-face report. It is therefore crucial that an alternate and inviolable mechanism for feedback exists. The hotline must be anonymous, accessible and secure. Employees should be encouraged to use the hotline for queries as well as reports to familiarize them with the system.
Ensure a thorough investigation: Nothing will dissuade future reporting behavior than a report that goes ignored or unaddressed. Ensure the veracity of the investigative process, as well as adequate oversight by a board or committee, so nothing goes unchecked.
Prepare for the next report: Even a report that is ultimately dismissed can shine a light on an area of vulnerability or ambiguity. It is the responsibility of the investigative parties or ethics/compliance officer to ensure that the system (training, materials, processes) is updated to actively prevent future incidents.
In spite of the technological underpinnings of hotlines and fraud detection systems, the best defense against wrongdoing remains old fashioned — a strong corporate culture and open communication. This does not devalue the role of the hotline. Rather, by providing a hotline and associated reporting infrastructure, a company demonstrates to its employees that it is absolutely committed to safe and confidential reporting behaviors.