Are we living up to our values? This is a critical question when it comes to monitoring and assuring an ethics programme.

Members of boards and other governing bodies need to assure themselves that their organisation is living up to its ethical values and commitments and delivering the behaviours and culture expected. In today's world, shareholders and stakeholders have high expectations of those running organisations. They expect companies and organisations to be run to high ethical standards. If not, they expect them to be held accountable.

Assessing the risk still poses some big challenges in terms of information flow, analysis and reporting.

It is important for organisations to work out the indicators that matter to them, inform themselves and use these as the basis for narrative reporting about culture. An important point to note is that the data on their own tell only half of the story. The correct interpretation and contextualisation of those indicators are what provides a real understanding of the effectiveness of the ethics programme.

This is why benchmarking exercises are important, as they can be really helpful to put the data into context and interpret them. These can be:

  • External, focusing on comparisons with other organisations
  • Internal, highlighting differences between business units, geographical locations, etc, within an organisation.

Some organisations appoint an oversight committee (a dedicated existing director level committee such as the Audit, Risk or Ethics Committee) to:

  • Consider the criteria for assessing ethical performance against the evidence that is possible and relevant.
  • Consider who will provide the assurance – management, the audit function or external providers. 
  • Provide the board with regular reports on ethical performance, ethical issues, breaches of the code and use of speak up lines.
  • Consider what form of external accountability and reporting is required. 

Finally, it is important that all employees receive transparent feedback on the impact that the ethics programme has on the business. The content of the feedback can vary and needs to be tailored to the role and seniority of employees. However, organisations are increasingly sharing with all their employee's information about the use of their Speak Up line, disciplinary actions are taken as a result of breaches of the code, improvements introduced, and more. 

Useful resources

Culture Indicators: understanding corporate behaviour
Culture Indicators: understanding corporate behaviour

This Board Briefing sets out to help boards through its examination of a range of relevant indicators and how to interpret them.

IBE Lecture with Sir Jonathan Thompson
IBE Lecture with Sir Jonathan Thompson

View our webinar recording.

Rotten: Why Corporate Misconduct Continues and What to Do about It
Rotten: Why Corporate Misconduct Continues and What to Do about It

View the recording of our webinar.

Culture by Committee: the pros and cons
Culture by Committee: the pros and cons

The idea of having a committee dedicated to the task of overseeing culture and ethics is relatively new. This survey report is intended to benchmark what is happening in the UK, providing a valuable insight into how companies are approaching the task.

Red Flags: a report on identifying indicators of corporate culture
Red Flags: a report on identifying indicators of corporate culture

This report represents the conclusions of a workshop of senior regulators, company directors and executives and investors exploring ways of identifying early warning signs of a weak culture.

Checking Culture: a new role for internal audit
Checking Culture: a new role for internal audit

Checking Culture: a new role for internal audit shines a spotlight on the role of internal audit in advising boards on whether a company is living up to its ethical values.