Data Shows the Growing Influence of Ethics and Compliance in the C-Suite, the Cost of Compliance for Highly Regulated Industries and How Leaders Address Ethics/Compliance Across a Global Organization
NEW YORK, May 16, 2019 (Newswire.com) – The Ethisphere Institute, a global leader in defining and advancing standards of ethical business practices, announced today the launch of volume two of its World’s Most Ethical Companies Insights Report series, titled Structuring and Resourcing Your Ethics and Compliance Program Effectively. The latest findings will be introduced during a webcast today, May 16, at 1:00 p.m. EDT.
Key themes in the report:
- Overall Program Structure: Titles, Reporting Lines and Authorities Granted
- Informing the Governing Authority: Board Reporting
- The Resources Needed and Where to Place Them: Staffing, Centralizing Programs and Evolving Backgrounds for E&C Staff
“The most common requests we receive from compliance professionals revolve around how to structure a program to maximize limited resources, to whom should our Chief Ethics Officer report and what access and authorities should the ethics program be granted within the organization,” said Erica Salmon Byrne, Ethisphere Executive Vice President. “These questions and more are addressed in volume two of our Insights series.”
The report is based upon responses to the 2019 annual Ethics Quotient® Survey and focuses on the program structure and resources section of the questionnaire. To help identify developing trends, the report includes year-over-year comparisons for certain data points, focusing on interesting developments in the cornerstone area of how companies structure their programs. In addition to being the basis of determining the annual list of the World’s Most Ethical Companies, Ethisphere’s Ethics Quotient® Survey process is designed to capture information that leads to practical decision-making and the development of best practices in business ethics.
- A full 76 percent of the 2019 honorees designate a “Chief Compliance and/or Ethics Officer,” and only 26 percent maintain the familiar “dual-hatted” structure of giving the program owner both “General Counsel” and “Chief Compliance and/or Ethics Officer” titles. This decrease is a reflection of the growing recognition that running an ethics and compliance program is a full-time job and one that is worthy of the appropriate title.
- For companies where the individual overseeing the program is either the CEO or the General Counsel and dedicates less than three-quarters of their time to the role, almost all have designated another individual as responsible for the day-to-day operations of the program. Three-quarters of them include that day-to-day person in presentations to the board of directors or relevant subcommittee of the board.
- The median number of full-time employees (FTE) dedicated to compliance and ethics reported by honorees in highly regulated industries is 92.0, as compared to 14.8 at non-highly regulated companies. Similarly, the report reveals a chasm between those organizations that are publicly traded versus privately held or non-profit, reporting a median of 26.0 FTEs for public companies and just 15.0 as the median for privately held or non-profit organizations.
“Ethisphere’s research has long supported the notion that companies who are assets to their community do better business. This is confirmed by the insights gleaned from this report, as well as our proprietary Ethics Premium data, which shows how the World’s Most Ethical Companies regularly outperform key indices,” Byrne said. “Our World’s Most Ethical Companies process is built on this premise, and the data confirms the correlation between culture, community engagement, governance, and financial performance.”
Download volume two of the Insights series, Structuring and Resourcing Your Ethics and Compliance Program Effectively: https://events.ethisphere.com/events/data-programs-and-practices-of-leading-companies/
In April, Ethisphere released the first volume of the 2019 World’s Most Ethical Companies Insights Report series, which covered detection and monitoring, governance, and written standards.
All Ethisphere research, content, and expertise, such as a recent special report on root cause taxonomy and data-driven insights, can be found on the Business Ethics Leadership Alliance (BELA) member hub, which is made available to global members of BELA. To request guest access,please contact Executive Vice President Jonathan Whitacre at firstname.lastname@example.org.
The Ethisphere® Institute is the global leader in defining and advancing the standards of ethical business practices that fuel corporate character, marketplace trust, and business success. Ethisphere has deep expertise in measuring and defining core ethics standards using data-driven insights that help companies enhance corporate character. Ethisphere honors superior achievement through its World’s Most Ethical Companies® recognition program, provides a community of industry experts with the Business Ethics Leadership Alliance (BELA) and showcases trends and best practices in ethics with Ethisphere Magazine. Ethisphere also helps to advance business performance through data-driven assessments, benchmarking, and guidance. More information about Ethisphere can be found at https://ethisphere.com.
Director of Communications