One of the more cynical “commitments” to compliance occurs when a company embraces compliance for the first time in response to a government investigation.  I call this  — finding “compliance” religion. When a company is under investigation or potentially under investigation, senior management embraces compliance and allocates resources to “protect” the company. We all know this is short-sighted thinking.

A number of companies through the years will ramp up compliance programs while under investigation, argue for remediation credit, promote compliance during a monitorship or other court supervision program, if required under a government settlement.

When the government or the court leaves the scene, the company’s commitment to compliance is put to a real test. This kind of varying commitment to compliance can be devastating to corporate culture.

I am reminded of a white collar client who, in anticipation of sentencing, sought out a psychiatrist for treatment and donated more time to charitable functions. When asked if the therapy was helpful, he responded, “Yes, but I was only doing it to help my cause when the judge sentenced me.” Well, that is the exact type of thinking that judges observe in defendants all the time and you can imagine how disappointed the judge is when he or she observes a phony commitment by a defendant.

The analogy partially applies to corporate compliance that is only motivated to mitigate the harm from a government enforcement action and/or court supervision. Once the dust settles, if the company starts to dismantle the compliance program or cut resources assigned to the program, it is clear the company does not understand the purpose of compliance.

I have written over and over that compliance is not solely motivated to prevent government enforcement actions. Yes, that is one purpose, but there are many more upsides to an effective ethics and compliance program.

First, and most importantly, an effective ethics and compliance program leads to increased profitability and sustainability of a company. When a company is committed to ethics and compliance, its employees are more productive and there is less employee turnover. Employees have more pride and commitment to the company and productivity increases and misconduct decreases.

Second, an effective ethics and compliance program creates competitive advantages because of public perception – there is no question today that consumers value companies with strong ethical cultures, especially in those industries where ethics is a key part of the sales ingredient.

Third, shareholders and other stakeholders in the company will assign greater value in the trust and integrity of the company. A trust factor can add to the overall stock price of a company committed to ethics and compliance.

When a company abandons its commitment to compliance after the government is no longer a threat, employees, shareholders and other stakeholders naturally develop a cynical attitude toward the company. Employees may feel less committed to the organization, the incidence of misconduct will rise, and overall performance of the company may decline.

It is easy to imagine senior management walking this cynical line when life gets a little easier. Unfortunately, such an attitude is likely to boomerang into increased misconduct and a greater possibility of recidivism. It is an unfortunate result of senior leadership’s failure to understand the purpose of compliance and how important a culture of compliance is to a company’s livelihood.