Thursday, February 18, 2010

Every Company Needs an Ethics Programs

If your company does not have a Business Ethics and Compliance program, its time to change the situation. Right now, the FAR threshold for implementing a mandatory program is a $5 million contract that lasts for at least four months. However, many of the companies that have been suspended or debarred from Government contracting because of ethical lapses have had contracts much smaller than $5 million.

The Defense Industry Initiative on Business Ethics and Conduct has developed a tool kit to help Government contractors develop an ethics program. This toolkit is available at their website which has many other resources to help contractors develop robust ethics programs. For example, the toolkit will help contractors identify risk areas such as
  • sloppy timekeeping practices
  • business courtesies
  • supplier kickbacks
  • environmental protection
The kit will also help companies
  • establish procedures to detect and prevent occurrences of unethical activities
  • establish internal compliance programs
  • set up training programs.
One of the most important elements to an effective business ethics and compliance program is to set a proper "tone at the top". According to the Association of Certified Fraud Examiners, "tone at the top"

refers to the ethical atmosphere that is created in the workplace by the organization's leadership. Whatever tone management sets will have a trickle-down effect on employees of the company. If the tone set by managers upholds ethics and integrity, employees will be more inclined to uphold those same values. However, if upper management appears unconcerned with ethics and focuses solely on the bottom line, employees will be more prone to commit fraud because they feel ethical conduct is not a focus or priority within the organization. Employees pay close attention to the behavior and actions of their bosses, and they follow their lead. In short, employees will do what they witness their bosses doing.

No comments:

Post a Comment