Questions for Self-Governing Organizations

 Particularly over the early 1980s, a body of “best practices” or “benchmarks” have emerged.  These best practices have developed through research and practice.  Ethics centers including Bentley College, the Ethics Resource Center, Warwick University, Boston College, the Responsible Business Institute, the Ethics Officer Association, Business for Social Responsibility, the Health Care Compliance Association, and the Ethis & Policy Integration Centre have developed or researched these best practices.  Reflecting a strong compliance mode, most follow from the underlying logic of the USA Federal Sentencing Guidelines for Organizations (FSGO).

It is helpful to organize these emerging standards and best practices as eight questions that any self-governing organization (SGO) should ask.  The questions themselves do not set standards.  If the SGO is concerned only primarily with legal compliance, its standards and practices will reflect that concern.  The RBE, however, seeks to fully embrace appropriate levels of responsibility to all its stakeholders.  The answers, then, are necessarily broader, more creative, and based upon emerging global standards and best practices.

The eight questions themselves are set forth in the table below followed by the provisions of the FSGO as compliance minimums and example global standards.  The FSGO requirements for an "effective program to prevent and detect violations of law" are included because they compose a well-reasoned framework.  They also establish well-recognized program minimums for ethics and compliance program design, implementation, and enforcement.  The answers to these eight questions will form the basis of any responsible business initiative.

 

FSGO Elements of an “Effective” Compliance Program
Sample Emerging Global Standards and Best Practices

Q.1 What norms, values and standards should we set to guide our members and create reasonable expectations among our other stakeholders?

FSGO.1  Standards and Procedures to Reduce Misconduct  Establish mandatory business ethics and legal compliance standards and procedures or employee and agent behavior that are reasonably capable of reducing the prospect of misconduct. 

Standards and procedures should reflect industry norms and government regulations.

Standards should reflect the size of the organization and its prior history of misconduct.

If because of the nature of an organization’s business there is a substantial risk that certain types of offenses may occur, management must have taken steps to prevent and detect those types of offenses. 

·                            Sound set of beliefs
·                            OECD Guidelines for MNE
·                            OECD Guidelines for Corporate Governance
·                            US Federal Sentencing Guidelines for Organizations
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Q.2 What style, structure, and systems of authority, responsibility, accountability—at all levels—should we exercise? 

FSGO.2  High Level of Accountability Appoint and empower one or more high-level managers to oversee compliance with the standards and procedures.

No individual within substantial authority personnel may have participated in, condoned, or been willfully ignorant of the offense.

·         Leadership styles

·         Board-level committees

·         High-level person responsible for program

·         Executive-level ethics committee

·         Ethics Office

·         Individual duty to report misconduct

·         Australian criminal code corporate culture approach
   

·          

Q.3  How can we most effectively communicate our standards and establish reasonable expectations among our stakeholders?

FSGO.4  Effective Communication  Effectively communicate the standards and procedures by, for example, conducting training programs and distributing practical written materials.

·         Executive Modeling

·         Formal communications

·         Orientation

·         Ethics training

·         Ethics Games

·         Posters

·         Newsletter

·         Stakeholder engagement/dialogue

Q.4 How can we know that our members follow our standards and reasonable stakeholder expectations are met?

FSGO.5  Auditing/Monitoring  Take reasonable steps to achieve compliance with the standards and procedures by, for example, using auditing and monitoring systems, and by establishing a misconduct reporting system that employees can use without fear of retribution.

·         Independent Audit Committee

·         Audit Department

·         Quality monitoring

·         Ethics Office investigation resources/availability

·         Mechanism(s) free for fear of retaliation

·         Organizational ombudsman

·         Policy on retaliation

·                            Policy on confidentiality and privilege
 

Q.5 How can we ensure that our members have the right skills, knowledge, understanding, and attitudes (SKUA) to pursue our organizational purpose in accordance with our standards?

FSGO.3  Due Diligence  Use due care not to delegate substantial discretionary authority to individuals who are likely to engage in illegal activities.

·         Recruiting

·         Hiring

·         Skills training

·         Assignment

·         Promotion

·         Termination

Q.6 How can we encourage our members to embrace our standards and manage our stakeholder expectations?

FSGO.6  Enforce Standards Consistently Enforce the standards consistently through appropriate disciplinary measures, including, as appropriate, discipline of individuals responsible for the failure to detect an offense.

·         Recognizing ethical behavior

·         Rewarding ethical behavior in challenging situations

·         Punishing behavior not to standards

·         Standards-consistent compensation schemes, esp. bonuses, incentive pay

Q.7  How should we respond to mistakes, misconduct crises, and involving our  standards?

FSGO.7  Respond Appropriately and Learn through Experience  After an offense has been detected, take all reasonable steps to respond appropriately to the offense and to prevent further similar offenses—including any necessary modifications to the program to prevent and detect violations of law.

Where violations of law or significant individual misconduct have been substantiated, report to appropriate government authorities for further action. Organization should cooperate with appropriate government agencies.

·         Voluntarily reporting mistakes and misconduct

·         Cooperating with proper authorities

·         Correcting harm caused

·         Conducting require skills and knowledge training

 

Q.8 How can we continually expand our capacity to create the results we truly desire, nurture new and expansive patterns of thinking, set collective aspiration free, and continually learn to see the whole.

·         Establishing program goals and objectives

·         Developing appropriate action plans

·         Establishing performance indicators

·         Developing performance measurements

·         Instituting data recording, collection, and analysis

·         Establishing reporting frameworks and schedules

·         Identification of reporting targets

·         Global Reporting Initiative standards

·         Developing individual skills of generative learning

·         Building a culture of knowledge sharing and quality