Magazine article Business Credit
Achieving Corporate Ethics Standards a Gradual, Deliberate Process within U.S. Companies: New Survey Finds Multiple Sarbanes-Oxley Obligations Create Challenges
Newly released research from Deloitte & Touche LLP finds that while most companies have taken the initial steps toward establishing a code of ethics, a limited number are actively monitoring adherence to the programs. In a detailed questionnaire sent to 5,000 directors of the top 4,000 publicly traded companies, Deloitte determined that 83 percent of the firms responding have established formal codes of ethics and conduct, but 25 percent are not actively monitoring compliance.
Further slippage can be seen in the allocation of resources to ethics activities. When asked if their company had an ethics officer (either full- or part-time), only 55 percent answered in the affirmative. However, positive data also emerged from the survey, with progress being made on several fronts. For example, more than 95 percent of companies said their code of ethics applied to every member of their organization, including senior management and board members. "Our data shows that there are several business and operational challenges facing many companies who are working towards implementing ethics and compliance programs," said Sherrie McAvoy, National Director of Corporate Compliance and Ethics Consulting at Deloitte. "We believe that these challenges are not insurmountable and that corporate ethics initiatives will continue to gain momentum."
According to the survey, the following issues are among those impacting the implementation and sustainability of successful ethics and compliance programs:
* Communication: Slightly more than half of the respondents address ethics and compliance issues with their board only when failure happens. At that point, the board is forced to react to failures rather than mitigate or prevent them. Additionally, 90 percent of the companies include shareholders, suppliers, customers and others in their codes, but only 52 percent of the participants actually distribute the code to these parties. …