By: Dr. Robyn S. Joppy| One Accord Consulting Firm

Why? Why? Why?

Often times when corporate compliance is the topic of conversation, many questions are generated such as: Why were compliance programs introduced into an organization’s corporate culture? Why are corporate compliance programs essential? Why are some non-profit human services organizations resistant to implementing a compliance program? Why is compliance education and training essential to compliance programs and can its impact on the culture be measured?

In the first decade of the 21st century, companies like Enron, WorldCom, HealthSouth, and Arthur Anderson were at the forefront of conversations regarding corporate scandals and business ethics (Mensch, 2006).  According to Arnold, Arnold, and Arnold (2010),

the epic failure of these former “corporate giants”

can be imputed to poor organizational culture, poor leadership, and the misconduct of a few bad employees.  While culture molds workplace values and standards, the ramifications of a bad or poor corporate culture can be negative as well as catastrophic.  Corporate or organizational malfeasance is attributed to a company’s culture so the federal government recommended the development of a corporate compliance program as a viable solution.

A compliance program, also known as integrity or ethics program, is an organization’s commitment to adhere to all laws, regulations, internal policies and procedures that govern its business.  Johnson (2004) defines a compliance program as a program an organization has to help guide them in accordance with established laws, regulations, specifications, and policies.

Assessing organizational culture is intended to indicate the significance of ethical conduct and values incorporated into legislative and regulatory reforms.  The United States Sentencing Commission (USSC) suggests the primary indicator of success in any compliance program is the culture of the organization (Johnson, 2004).  

A compliance program’s framework includes monitoring and promoting an organization’s established values and depends on hiring employees whose values align with the culture.  Moreover, it encourages employee education and training.  The premise behind this strategy is to cultivate a culture based on what is real and what is desired so there will be no deviation (Arnold et al., 2010).  Education and training, are critical to compliance in any industry.  Mensch (2006) states ethical training, along with other relevant forms, is imperative for all employees at every level throughout an organization.   

Up Next Month, we’re talking about Part 2, Why are compliance programs vital to an organization’s corporate culture? See you then!