18 May 2013

The comment in the State Services Commission 2013-2014 statement of intent, that it is “looking at undertaking a survey” in 2013-2014 as a measure of the trustworthiness of agencies and their staff, was published at the same time as Deloitte issued a risk and compliance guideline about the criticality of integrity to an organization (The Deloitte Governance Framework: Framing the Future of Corporate Governance).

“A commitment to … integrity is widely recognised as a “must have” in organisations, yet many people and organizations struggle to put this ideal into practice.” The need is for “… a corporate culture of integrity and ethics, coupled with corporate, environmental and social responsibility…. to build trust and long-term relationships with shareholders, customers, regulators and employees.”

Deloitte regards integrity as so central to business success that organisations should have an individual conversation about their code each year with each employee, manager and director. There must be an expectation that staff, from the time they join an organisation, understand integrity standards and the consequences of any breaches. The recommendation is that staff at all levels affirm in writing that they understand their organisation’s code, are fully compliant and that they are committed to reporting misconduct. Highly effective organisations evaluate and compensate managers who actively promote and model integrity and enforce those standards.

Deloitte identifies systems for measuring compliance, including

  • conducting cultural and ethical surveys and evaluating employee responses
  • reviewing reports to the ethics hotline, whistleblower reports and trend analyses
  • benchmarking against peer, industry, country and corruption indices
  • conducting quality surveys and evaluating employee responses
  • monitoring and evaluating public scrutiny from the media, shareholders, customers and external watchdog agencies

These seem to reflect the more comprehensive evaluation measures of integrity that the Auditor General has specified in the OAG statement of intent, rather than the SSC proposal to use just the Kiwis Count survey and possibly a survey of integrity breaches observed by State Servants.

Deloitte reports that 46% of public company respondents in the United States survey staff regularly. The results indicate how effective the “tone at the top” is being disseminated throughout the organisation – and more directly whether there is modelling by senior managers.

http://deloitte.wsj.com/riskandcompliance/2013/05/17/integrity-in-the-boardroom-what-does-it-really-mean/?mod=wsjrc_hp_deloitte

Advertisements