Creating a culture of honest and ethical behavior

Lets face it, creating a climate that encourages honesty and ethical behavior is no small task. Especially if it involves altering long running practices. However, it can be done and it involves the following key points:

• Set the tone at the top. Honesty can best be reinforced when a proper example is set.
• Create a positive working environment. Research shows that wrongdoing occurs less frequently when employees have positive feelings about an entity.
• Hire and promote the right employees. Put people you trust in positions of trust.
• Train your employees. If you don’t tell people what is required, don’t expect much.
• Get confirmation. Ask each employee to periodically confirm the company code of ethics, to reinforce the organization’s policies.
• Administer discipline. What a company does when fraud occurs is very important. A cause and effect approach sends a message to all employees and is a deterrent.
• When an incident occurs, the organization should immediately conduct a thorough investigation, take appropriate and consistent action against violators, assess and improve the relevant controls, and communicate and implement training to reinforce the entity’s values, code of conduct, and expectations.