We hear a great deal about corporate culture and its relevance to such matters as internal control, risk management, whether to pursue a merger or acquisition, and the effect on regulators’ investigations and enforcement actions. It seems we can’t get away from hearing about it, and we begin to wonder whether this thing called culture is real; and, if it is, what its effect is and whether it can be influenced in a meaningful way.
Much attention is given to culture’s effect on how well a company deals with legal and regulatory compliance. For years, regulators have been pushing the importance of a corporate culture that drives a high level of ethics and integrity. Securities and Exchange Commission and Department of Justice officials, speaking to compliance with such laws as the Foreign Corrupt Practices Act and avoiding related enforcement actions, have emphasized maintenance of a culture that does not tolerate illegal behavior. The head of the SEC’s Office of Compliance Inspections and Examinations adds that while a culture of compliance is an elusive concept and a significant challenge, it has a huge impact on how ethically a company performs.
