10 Ways to Save Money With Proactive Ethics and Compliance (Part 1)

10 Ways to Save Money With Proactive Ethics and Compliance (Part 1)

Some people question whether or not investing in an ethics and compliance program is worth it. I think the answer is pretty obvious. With thelatest round of Federal Sentencing Guidelines amendments now in effect, the recent passing of Ontario's Bill 168 and other legislation, companies are more liable than ever before. A lot of people think ethics and compliance is too costly. To those people I ask, is it more cost effective to have an effective ethics and compliance program in place to deter workplace misconduct, or pay one of the astronomical fines we've heard about in the news this year?

I attended a seminar conducted by David Griffin of HR Proactive, where he discussed the importance of being proactive when it comes to ethics and compliance. Here are justfive of the many costs your company will save by taking a proactive approach to ethics and compliance, as outlined in Mr.Griffin's presentation:

1. Productivity

Ethical misconduct can be distracting and difficult for employees to deal with. When misconduct is present in the workplace, employees find themselves focusing on the misconduct as opposed to their work. When ethics and compliance are viewed as important in the workplace, employees can focus on their job and perform at their best.

2. Reputation

Ethics and compliance have become part of the purchase decision process for many consumers. When news breaks about an investigation, lawsuit or criminal charges, you can bet that the company's name is going to be raked through the mud. Many companies rely on the power of their brand. When consumers have negative associations to particular brand names, they will go elsewhere to get what they need. Your reputation is probably the hardest thing to gain back after an ethics and compliance violation has been uncovered.

3. Liability

Failing to comply to industry laws and regulations opens up a whole new can of worms for companies- andit comes with a heftyprice tag. Negligent manufacturing results in product recalls. Unsafe workplaces result in injuries and lawsuits. Ethics and compliance programs help decrease liability on a number of levels, asthese programshelp mitigate risks.

4. Fines and Legal Fees

If your company is found guilty of violating the law, you can expect that fines and legal fees are only going to continue to increase in the coming years. In the US, companies cangain credit and reduced fines if they cooperate and can prove that an effective ethics and compliance program is in place within their organization. This is a welcome change for many companies that have robust ethics and compliance programs in place butlands inhot water because of the actions of a single or group of employees who made poor choices.

5. Employee Turnover

People don't want to work for companies that have unethical reputations. The Reliable Plant article, "Survey: Ethics Impact Employment and Productivity," states that findings from a study by LRN shows that 1/3 of employed persons left a job because they disagreed with a company's ethics. Employee turnover costs can really hurt a company, as the cost of training new employees adds up quickly.

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