HR and Ethics Departments Need to Work Together to Ensure Appropriate Risk Management and Corporate Culture

NEW YORK, Oct. 29 /PRNewswire/ -- Human resources and ethics departments of global organizations are engaging in ongoing collaboration to make their companies' corporate culture and risk management processes have an increased focus on ethics, according to a report released today by The Conference Board, the global business research and membership association.

Although there is considerable sentiment for pursuing greater collaboration, only one-fifth of those surveyed by The Conference Board regard full integration of these departments as optimal. But most of the participants (77 percent) would like to see a more collaborative approach than their company is currently taking.

The report is based on a survey of human resources and ethics and compliance professionals of 214 global companies. It found that collaborative practices between these departments are strongest with regard to code of conduct and policy writing, risk analysis, training and hotline maintenance. Less mutual support was found in situations where joint effort could help build a strong ethical culture, such as employee screening and compensation.

"Many CEOs and boards of directors recognize the critical contribution that a teaming between human resources and ethics and compliance can make towards an ethical corporate culture, especially in the areas of acquisitions, joint ventures and supply chain links," says Ronald E. Berenbeim, principal researcher at The Conference Board and author of the report. "But the fundamental requirement for collaboration is for both E&C and HR professionals to cultivate the necessary habits of mind with respect to recognition, analysis and resolution of ethical dilemmas."

To achieve leadership support, human resources and ethics and compliance leaders need to develop measures that enable executives and board members to recognize the potential bottom-line impact of such collaborations.

"Compelling metrics can tell an appealing story that will encourage executive leadership attention and oversight," adds Berenbeim.

Thirty percent of the respondents cited different approaches to problem analysis as the key obstacle towards successful collaboration between the two departments. Eighteen percent cited potentially disruptive areas such as lack of mutual professional respect.

Nearly two-thirds of the survey participants provided examples of the benefits of working together in areas such as policy formulation, investigations, training and program implementation.

No single collaborate structure or process can respond effectively to a particular organization's distinctive requirements. The success of the collaboration between these departments depends less on reporting relationships and processes than on who is engaged in this common pursuit and their skills, experiences, how they relate to each other, and how willing they are to discuss ethics issues.

Senior management can help by establishing policies and procedures that encourage or even require collaboration.

"The organizational value of promoting an ethical culture ultimately depends on what the company's managers learn from it," concludes Berenbeim. "Managers need to have an awareness of the ramifications of collective action, the discipline for continuous improvement, and a sense of empathy. And a clear senior management mandate to collaboration is essential."

Source:
Working at the Intersection of Human Resources, Ethics, and Compliance--the Need for Collaboration, Report #1453-09-RR, The Conference Board