Code of Conduct Enforcement

code2The bulk of company internal investigations are devoted to human resource and code of conduct violations. Of course, there are always potential legal violations but these are far smaller in number but could have disastrous consequences depending on the nature of the violations.

A company’s Code of Conduct is its cultural foundation. A CEO should know it backwards and forwards, and be able to refer to it, cite it and promote adherence to it. It is the Company’s equivalent of our country’s Constitution. Authorities and activities are derived from the Code of Conduct.

As a consequence, enforcement of the Code of Conduct is a critical and vibrant part of a company’s commitment to its Code and to communicating the importance of the Code to company employees. A company has to promote its vigilance in promoting its Code. That does not mean that they have to publicize the violators, or name names. Privacy laws and general sensitivities prohibit such disclosures and no one would benefit from it anyway.

Code of conduct enforcement is promoted in several specific ways – the CEO and senior managers have to reiterate the ia4importance of the Code, the use of the Code as a guiding force for employees, and their respective commitment to enforcement. That does not mean they have to adopt a zero tolerance enforcement policy, or commit to harsh penalties for violating the Code; rather, the CEO and senior managers have to articulate their commitment, and the unified support of lower level managers, to pursue potential violations of the Code, to investigate them fairly and promptly, and to impose appropriate discipline for any violations of the Code.

The CEO and senior managers have to back this policy commitment up by providing adequate resources and authority to the Company’s investigative function, ensure that investigations are conducted fairly and promptly, and monitor the overall performance of the Company’s investigative function.

It is one thing to say that potential violations will be investigated fairly and promptly. It is another thing to actually conduct such investigations fairly and promptly.

The CEO and senior managers have to commit to encouraging reports of potential violations by assuring employees that no retaliation will occur, subtle or overt, to ensure that employees feel safe to report Code violations.

It is much easier for an employee to report potential legal violations because of the clear threat to the Company from such behavior. It is another matter all together for company employees to feel safe to report potential Code violations where there is a low likelihood of a legal violation. Employee commitment to reporting potential Code violations is an important reflection of employee recognition of a culture of compliance.

holistic4If the culture message is permeating the work force, Code violation reports will probably be larger. When employees share in valuing a Company’s culture of ethics, they are far less likely to look the other way when they see a colleague engaging in misconduct.

Companies are putting more time and emphasis on their respective Codes of Conduct. With the design and adoption of much improved Codes of Conduct, companies are also increasing Code of Conduct training. It is important to make sure that everyone is training on a Code of Conduct. It promotes the overall culture of a company and sets basic conduct norms for everyone, as well as encouraging employees to trust the system and report potential violations.

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