LRN survey: Compliance and ethics rose to challenge of COVID-19

That’s according to the “2021 Ethics & Compliance Program Effectiveness Report” by LRN. The advisory firm surveyed nearly 650 ethics, compliance, and legal executives from a cross-sector of industries around the world during the second half of 2020.

Among the findings, 79 percent of respondents reported their company or organization’s ethical culture was strengthened during the COVID-19 pandemic, which LRN described as the ultimate “stress test.”

Further, 87 percent of respondents reported leadership rose to the challenges posed by the pandemic. And, 85 percent said their boards of directors effectively supported ethics and compliance during COVID-19.

Additionally, 82 percent said their organizations emphasized not just rules and procedures but also company values in motivating employees to do the right thing under difficult circumstances. Another 68 percent said leadership helped employees cope with the negative effects of the pandemic in their personal lives, and 79 percent said they believe their company’s ethical culture is stronger for the experience.

“Our key overall finding was that programs played a critical role in helping organizations keep their ethical culture intact, operate according to their values, and focus on employee well-being and needs,” says LRN Senior Advisor Susan Divers. “The findings show that ethical culture, by and large, grew stronger during the pandemic crisis.”

Divers says two other central themes that emerged were 1) a focus on streamlining ethics and compliance program components to make it easier for employees to get guidance and 2) the critical role of values meeting the challenges posed by the crisis.

“Employees went above and beyond rules and requirements to ensure that critical infrastructure remained intact and medical supplies were produced and delivered,” Divers says.

Areas in need of improvement

Just 40 percent of respondents said their organizations simplified or modified compliance procedures to meet the new business challenges of 2020, according to the report. Additionally, only 45 percent indicated their ethics and compliance team strengthened risk controls in areas like cyber-security, privacy, and donations of critical equipment.

The survey further showed most ethics and compliance programs did not pivot quickly in response to the pandemic and the way the crisis changed working conditions. For example:

• 24 percent reported their firm’s programs responded to pandemic conditions by using mobile devices to deliver training.
• 36 percent said their program began using shorter, more targeted training courses or videos.
• 47 percent said their programs revised training schedules and the rollout of the training curriculum.
• 52 percent said customized training and communication to address risks specific to the COVID crisis were put in place.

Most respondents also expressed concerns about potential negative effects of the pandemic on their programs and on conduct, including difficulty conducting effective investigations and audits; increased misconduct linked to remote work; less effective oversight and monitoring; and increased pressure to relax risk-mitigation procedures as business resumes.

Nonetheless, optimism prevailed. “Despite findings that suggest companies and E&C programs may not be responding nimbly enough,” LRN stated, “E&C and legal experts and professionals believe that there were many improvements that will endure—and that the pandemic will engender some very positive changes.”