Every company has a code of conduct that governs the operations in one way, or another. In fact, each company shares its values and rules to gauge the behavior of all employees. Scholars and non-scholars define ethical compliance as due diligence and the promotion of organizational culture, which encourages ethical conduct and commitment to compliance as required by the law.
Compliance is a program that ensures employees in different institutions conduct their operations and activities in an ethical manner as stipulated by the set standards. The assertion implies that workers have to carry out duties with the greatest level of integrity as well as in accordance with the regulatory and legal requirements. However, the top management in an organization ought to be committed to ethical compliance given that whatever they do is what other workers are bound to follow.
Top management commitment to ethical compliance
Globally, a number of companies acknowledge that it is important to publish the code of conduct or ethics in order to communicate the approved values and guiding laws. Reports show that the top management should be liable by ensuring that such is the case. The codes aid in constructing a values-driven company and deals with business standards, employees commitment and its relationship with the society.
The company needs to put across procedures and standards to detect and prevent criminal conduct. Such accepted procedures and standards are what scholars’ term as the code of ethics given that they describe the company’s foundation principles. In most cases, the principles can be important in determining what one must do and what they must not do during operations. As a result, the employees who are affected by the stipulated codes are supposed to understand the rules established.
Effective ethical compliance is a key quality of any good business. The integrity and good conduct expressed during business operations aid in marketplace success. For instance, it leads to a high performing organization, which in turn generates the anticipated financial performance. Thus, ensuring ethical compliance helps to defend the company’s reputation and shows commitment of the company towards responsible practice.
The upper management has a responsibility in ensuring that codes of conduct are executed to the latter. It is the determinant of the tone of any organization. The top management includes the top-level executives and managers involved in making the decisions that are business related.
Each organization has a full board that is answerable for the conduct of the organization and its employees. The commitment of individuals and groups will determine whether the ethical compliance will be effective or not. Such commitments can influence the company’s culture and behavior (Wulf 27).
A senior manager should be assigned by the board to oversee the development of the ethical compliance program. The upper management will act as examples to the fellow employees. Hence, to ensure that the program is successful, they have to demonstrate and communicate to the organizational members on the engagement in ethical compliance in every activity the company undertakes.
As a result, top management has to put into practice the values for the employees to see. They must act ethically and always talk about the company’s ethics and values. The managers should also help the organization and its individuals to adhere to the values. The upper management should reward integrity as a way of motivating other employees to ensure ethical compliance.
All workers at every stage have a role to play in the realization of the corporation’s moral compliance platform. Assimilating the program at every stage enables the information to be passed across the organization’s hierarchy. In many companies, the middle-level has a problem with ethical compliance. The supervisors should be similarly dedicated to moral compliance as most of the workers report to them.
Thus, the executives may find ways of supporting the supervisors in comprehending their duties in ensuring a moral workstation. They must find out the challenges that the middle managers face in implementing ethical commitment and guide them on how to overcome these challenges (Wulf 32). They have to make interim administrators aware that they are graded based on the principled output just as their monetary yields, moral ability, and obligation became a portion of the efficiency appraisal.
Ethical compliance: Case study
Doing business with integrity each day is the Gap Inc.’s way. In fact, Gap Inc. is a retail industry that was founded in San Francisco, California by Donald and Doris Fisher. Most of this corporation’s products are clothing and accessories. From business reports, the corporation is one of the most ethical companies.
The corporation was established on the basic code of carrying out trade ethically, honestly and responsibly. It has a detailed commercial compliance policy, which they are bound to follow. The corporation’s corporate compliance program is designed to ensure that all workers and directors operate with integrity and are responsible for whatever they do.
Strong corporate compliance is a way of doing business at Gap Inc. The corporation has a business behavioral code, which forms the building stone for their compliance program, and each employee and director must comply with it (Mishra n.p).
The corporation has senior officials who certify the employees’ compliance annually. The corporation has an international integrity unit whose main aim is to fix the compliance set-up as well as the corporation’s obligation to honesty into the universal laws and resolutions.
The department promotes the company’s endeavors to endorse and enforce compliance with the business code of conduct. However, this is done under the supervision of the chief compliance officer (Mishra N.p). The officer has to be actively involved as an example to the other employees who have agreed to the compliance. The department works closely with other departments.
Gap Corporation had in place an international integrity board that consists of top managers from different segments of the corporation. The top managers mainly function to monitor the effectiveness of the company’s code of conduct compliance program. The managers help in implementing the compliance act and advising on what to do when various challenges arise.
The managers take part in the governmental and supervisory procedures, and thus have a partisan commitment philosophy. The aim is to ensure good relationships between the government and the company (Welch 470). The audit and finance committee is where the chairperson of global integrity reports to always since the committee has the overall responsibility of compliance.
The Gap Inc. managers act, lead with integrity, and have a clear understanding of the code that they often review it with their teams. The managers allow the employees to raise questions and concerns about the policies and ensure that they are attended to in time. The relationship creates an environment that encourages the employee to act with integrity while following the ethical compliance standards. All the commitments from the upper management have made Gap Inc. one of the most ethical companies in the world.
Ethical compliance is often for the benefit of both the employee and the organization. It helps create a friendly work environment and reduces the chances of a lawsuit from the employees. The top management or executives are the people mandated to watch out for since they establish the tendency of the corporation and its ethical attitudes. Thus, for ethical compliance to be effective to the workers, ensure that the senior leaders are in check, and they represent the values of the company.
Mishra, Rajiv. Business Ethics. New Delhi, India: Rupa Publications, 2012. Print.
Welch, Patrick. Economics: Theory and Practice. Hoboken, New Jersey: John Wiley & Sons, 2009. Print.
Wulf, Katharina. Ethics and Compliance Programs in Multinational Organizations. Dordrecht, Netherlands: Springer Science & Business Media, 2012. Print.