Ethics & Culture

Image: This week Compliance Week starts a series on corporate sustainability, asking the most basic question of all: Will sustainability reporting ever be required? Yes, at least in the European Union. Inside we look at the state of CSR in Europe, and what role compliance officers are likely to play. “It’s one of the most difficult areas, in the sense of access to information as well as control over improvements,” says Wim Bartels of KPMG in Amsterdam.

Five years ago, the Dodd-Frank Act imposed new rules governing everything from derivatives trades and mortgage lending to disclosures about executive compensation and conflict mineral usage. Have all those requirements really helped companies master a stronger ethical culture? Inside, we look at what steps some companies have taken to promote a culture of compliance, and which outside stakeholders are lobbying the most for still more.

Sure, compliance officers do not have to fulfill their company’s ethics and compliance mission alone, but building a network of compliance ambassadors (or champions, or liaisons, or whatever you call your helpers) can be laborious. Inside, we asked compliance officers from Lockheed, GenCorp, DTE Energy, and elsewhere how they built their networks and what strategies they recommend to others.

More news from the groups formerly known as the Ethics & Compliance Officer Association and the Ethics Resource Center: The two have been subsumed into a new “Ethics & Compliance Initiative,” which has spawned a third wing, the Ethics & Compliance Certification Institute, to certify compliance professionals. More inside.

Image: SEC Enforcement Director Andrew Ceresney recently dropped new hints on FCPA risks for pharma and medical devices, plus suggestions on how to avoid those risks. “Our FCPA focus obviously covers many industries,” he said. “But the pharma industry is one on which we have been particularly focused in recent years.” His three warnings are inside.

A new report from NAVEX Global says the “substantiation rates” for employee hotline calls—that is, the number of complaints found to be worth investigating—more than doubled from 12 percent in 2013 to 27 percent in 2014. “This significant increase may be a sign that ethics and compliance program leaders are taking a more serious approach to investigating allegations of retaliation,” NAVEX Global said.

Image: Title: BaileyThe U.K. Prudential Regulation Authority says individual senior managers of financial firms could face sanctions if a breach occurs in their area of responsibility and it’s proven the manager took no reasonable steps to avoid it. “Our new accountability regime will hold all senior managers, including non-executive directors, to a clear standard of behavior, and we will take action where they fail to meet this,” Bank of England CEO Andrew Bailey said. Details inside.

Effective case management is crucial to a compliance program, but developing a process—flexible enough to juggle different types of issues, systematic enough to resolve cases in a timely manner—is the tricky part. This week in a guest column, Marita Janiga, director of the National Special Investigations Unit and the Compliance Hotline team at Kaiser Permanente, shares how Kaiser works to triage cases and track issues for better reporting and analysis.

The European Commission estimates that roughly €120 billion is lost annually to public procurement corruption. While the competition for government contracts continues to intensify, there are more opportunities for companies and potential clients to engage in unethical business practices, which can result in serious penalties and reputational damage. Here are four ways compliance officers can get a grip on public procurement corruption. Details inside.