U.S. multinationals report confidence in managing ethics and compliance risks, but recognize challenges in their global operations, LRN study findsAccess report >> LOS ANGELES, CA – May 22, 2007 – Multinational companies headquartered in the U.S. rate themselves as above average in the overall management of their ethics and compliance risks, but recognize challenges in their ability to assess, prevent, detect and investigate violations across their global operations, according to new research from LRN. Companies rate themselves as 7.5 out of a 10-point scale in their ability to manage ethics and compliance risks timely and accurately at headquarters versus 6.7 in global operations. Further, in some areas of risk management, companies express a high degree of concern for both headquarters and global operations, such as in detecting violations where approximately 70 percent of companies experience challenges at either location. These are among the findings of the 2007 LRN Ethics and Compliance Risk Management Practices Study, an annual study from LRN that uncovers current practices and gaps in the field of corporate ethics and compliance risk management. “Globalization is rapidly intensifying a company’s governance challenges,” said Marjorie Doyle, Practice Leader, Ethics & Compliance Solutions, at LRN. “But companies not only need to have the right ethics and compliance risk management processes in place globally, they need to foster corporate cultures of values that inspire employees of many traditions and beliefs to trust and embrace these efforts as critical to both their own and their company’s success.” Additional trends uncovered in the LRN study include:
• Ethics and compliance officials name inadequate resources as their biggest challenge in conducting risk assessments (49 percent) and implementing prevention programs (53 percent) and as the second biggest challenge in investigating allegations. Inadequate data, cultural differences and technology limitations are also commonly cited challenges in risk management.
• Companies employ a spectrum of prevention programs, including online or on-site education, certification and performance reviews, with a code of conduct being offered by all respondents (100 percent) at their headquarters operations. Further, about 70 percent of companies surveyed reach all or most of their employees in international regions.
• Almost all (98 percent) respondents offer an anonymous phone line or a confidential reporting channel. However, almost two-fifths (39 percent) of companies believe their employees still fear retaliation for reporting.
• One-third of companies indicate being challenged to track the results of their ethics and compliance programs to business improvements. About the 2007 LRN Ethics and Compliance Risk Management Practices Study
Public and private expectations of corporate behavior have placed greater demands on companies for responsible global business conduct. New government regulations and laws, including the Sarbanes-Oxley Act and the Federal Sentencing Guidelines, require risk management oversight to ensure ethical and compliant business dealings. The 2007 LRN Ethics and Compliance Risk Management Practices Study was conducted in October–November 2006 among more than 150 senior ethics, compliance, legal, risk and audit professionals. Results are helping these and other professionals benchmark their programs against other companies’ efforts and target ways to improve their overall risk management process. A full report is available by emailing:
This email address is being protected from spam bots, you need Javascript enabled to view it
. ### |
