Does It Pay To Make An Ethical Investment?

Unethical and illegal conduct is costing organisations huge sums in fines and losses of reputation. Regulators are bringing into focus ‘cultural’ behaviours and conduct risk. Can a culture of strong ethics help the bottom line? How do you embed ethical behaviour into the business?

While regulatory fines may have been the initial spur to get firms to look at ethical behaviours, there are other drivers as well. In the social media age, reputational risk is a key one, scandals are harder to contain and can do greater long term damage to the brand. Poor ethical behaviour can also bring balance sheet risk, in terms of poor risk decisions with company or clients’ capital.

How do you implement an ethical change at an organisation?

Changing organisational behaviours that result from poor culture distilling from top to bottom is about more than implementing a training program or code of conduct. Almost all large organisations will have a code of conduct that promotes ethical behaviour, but often this code of conduct is not embedded into the business. Implementation of values into how business is done is where most organisations fall over.

It could take several years of reinforcement, even with a consistently strong tone from the top.

The board and executives should do more than pay ‘lip service’ to developing a strong and positive culture. The culture and value must be seen throughout the entire organisation. The board and senior management should empower and properly resource risk and compliance to stamp out and deter unethical conduct.

Alignment of interests

The best way to get the behaviours you want is to provide rewards for ethical behaviours, or at least to refrain from punishing people for acting ethically. It is also important you are not inadvertently providing rewards for behaviours you are trying to discourage. Getting incentives aligned with the overall organisational philosophy is not as easy as you might think. Is it acceptable for sales staff to walk away from business opportunities that might compromise ethical standards? Will they be compensated for making that decision and sacrificing a commission?

There needs to be balanced performance metrics considered in the performance measurement of all

staff, but particularly senior management. In order to build a more culturally consistent approach to decision making firms must first understand what the current culture of their workplace is. Boards and executives increasingly understand a stronger adherence to ethical standards can be beneficial to their firm’s ability to withstand risk. There is also a marketing element. Stronger cultural standards will build greater trust in the brand. Great companies build a brand by delivering on their values to their customers. Trust is hard won, but easily lost. Therefore, acting ethically cannot be viewed as an expense; rather it is an asset, and one that needs to be both invested in and maintained.

Governance, compliance, risk training solutions by the GRC Institute

A compliant ethical and customer focused culture begins with making your employees aware of the company’s corporate risks culture and policies. As a registered training organisation (RTO) the GRC Institute offers nationally accredited governance, compliance and risk courses. Our programs or individual modules can be delivered in-house, as part of your organisational training framework. The courses can be tailored to meet the specific needs of your organisation, within the parameters of the national qualification framework, ensuring optimal value for your business and employees.

For many people, the membership with the GRC Institute (GRCI) is a natural progression after successfully completing one of our courses. Please note: you do not have to complete one of GRCI’s courses to become a member.

4 core benefits of the GRCI membership

  • Training. GRCI offers Australia’s only nationally recognised qualification in compliance and risk management - mutually recognised in Europe, the Americas and across Asia through our international alliances with other compliance associations. As a member, you receive discounts for the training courses. Undertaking one of these certifications is an excellent way to develop a deeper understanding of risk, governance and compliance and for career development opportunities.
  • Networking. GRCI provides an easy and convenient pathway to networking with others in the industry. We regularly organise seminars and group discussions to develop our understanding of the best practices. This allows for open sharing of ideas, concepts, and experiences among all of our members.
  • Publications. GRCI publishes an e-magazine and a journal filled with topics relevant to professionals working in governance, compliance, and risk management. We present important hot topics in our industries to our readers as a way to inform and educate.
  • Advocacy. Finally, GRCI uses its position to advocate on behalf of our membership. We seek better governance of the industry through appropriate risk positioning and compliance protocols. We welcome sensible regulations that allow for appropriate competition and growth.

Contact us today to learn more about our organisation

There are many membership benefits - whether you pursue one of our accredited training programs or you are looking to network with other risk and compliance professionals. As a non-profit organisation, we reinvest all membership fees back into developing more features for our members.

To learn more about GRCI and its benefits, please contact us today on +61 (02) 9290 1788. Visit our contact page to submit an enquiry.