Update Summer 2014

It's time to change behaviour not the rules

The problem with rules is that there are never quite enough of them. This is particularly the case in business where situations often evolve before the rule has been invented, leaving regulators to play catch-up, while those caught out restore tarnished reputations.

Regulators on both sides of the Atlantic are busy tightening the rules, but if all this does is create more tick-box compliance, experience tells us that little will change. Scandals will emerge and businesses will find themselves exposed when staff make the wrong decision, often in a situation the rules haven’t reached.

Instead of asking “is this legal?”, businesses should be asking “Is this right?”. After all, if it’s right, the chances are it’s also legal. A shift in focus away from rules but towards behaviour is needed.

Strong core values running throughout an organisation will strengthen any compliance programme, be it antitrust as we see below or Adequate Procedures to prevent corruption. Many of the companies we work with, that have invested substantially in strengthening adequate procedures, are now asking themselves how they can ensure that when the difficult situation arises, staff really will do the right thing?

The answer lies in establishing a strong code of conduct based on ethical core values. Senior management need to set the tone, communicate expectations, incentivise good behaviour and monitor what is actually happening on the ground.

Regulators, industry bodies and governments should be looking at how to encourage this more effectively. Sarbanes Oxley and the US Federal Sentencing Guidelines already require companies to promote honest and ethical conduct. However, from the scandals that continue to emerge it is clear that honest and ethical are narrowly defined as legal, following the letter rather than the spirit of the law.

It’s time to shift the emphasis towards encouraging good conduct – it’s how people behave that really makes the difference.

Can an ethical culture prevent anti competitive practices?

This was the question we posed to senior executives at our Business Ethics Debate in May, attended by the Competition and Markets Authority.

The discussion began by examining why establishing an ethical culture can be harder than it sounds. It can cost time and money  to establish; can result in a loss of profit if the only ethical solution is to turn business away and it can create ‘first mover disadvantage’ for firms seeking to introduce an ethical culture into a market where ethical behaviour may not be apparent.

However, although these arguments may sound convincing, they should not be used as a reason to avoid business ethics. They merely show why for some, business ethics can remain in the ‘too difficult’ box.

On the contrary, over the medium to long term, an ethical culture provides a competitive advantage, building reputation, consumer loyalty and trust. In a highly competitive market, a sense of strong core values can act as a real differentiator.

Even more importantly a strong ethical culture directs behavior and provides reassurance that staff will know what to do when faced with difficult situations – particularly those not governed by rules.

With the regulators being both pressurised and empowered to act, establishing a strong ethical business code should be the first step towards avoiding reputational damage.

Read the summary in full

GoodCorporation launches Antitrust Framework

Antitrust Framework

Changes to UK competition law resulting from the Enterprise and Regulatory Reform Act 2013 have had an impact on all areas of competition law. That together with the launch of the newly empowered Competition and Market Authority, mean that companies face increased regulatory risk.

To help companies in this heightened regulatory environment, GoodCorporation has launched an Antitrust Framework designed to help companies minimise competition risks by ensuring that they have the right ethical culture and relevant practices firmly embedded.


The Framework can be used for internal self-assessment or for independent external assurance. It follows the methodology employed by our Business Ethics Standard creating an assessment process that gathers evidence for each practice and awards grades against a four-point scale.

In Brief...

House of Lords Debate: Ethical challenges in EPC

Nathalie Louys, General Counsel of Subsea 7 led GoodCorporation’s Business Ethics Debate on ethics and compliance in Engineering Procurement Construction.

The discussion looked at Anti-Bribery and Corruption (ABC) compliance and the pressures this places on suppliers.

A number of key issues were raised including: liability for sub-contractors; prescriptive compliance clauses; contract termination; cost; best practice and partnerships.

Collective action by contractors was considered, with the suggestion that this could lead to higher standards of ABC compliance and be far more effective than rigid contracts and unmanageable liabilities.

Click here to read in full

GoodCorportion ABC Risk Assessment workshops help strengthen Adequate Procedures

Understanding and managing local bribery risks is a vital first step in any anti-corruption programme.

Businesses need to feel confident that these risks are understood and properly managed. To help companies do this, GoodCorporation has developed Risk Assessment workshops that can be tailored to different industries and local markets.

These workshops provide an effective means of training local business units and raising awareness of the key issues. Risks and how to mitigate them are identified collectively, leading to the development of a tailor-made action plan for each business unit.

GoodCorporation produces a risk map for the relevant market and tailors the workshop to instill greater understanding of the issues.

Not only does this help strengthen ABC compliance, it also helps demonstrate adequate procedures.

GoodCorporation guide to corruption risks in Brazil

Brazil has tightened up its anti-bribery laws in a bid to tackle the corruption that costs the country billions of dollars a year.

The May issue of Governance & Compliance Magazine features an article by GoodCorporation’s Leo Martin.

In Cleaning up its act we look at the risks business face and advise on the anti-corruption compliance programmes that need to be in place.

GoodCorporation at Compliance Week Europe event

GoodCorporation will be leading a Business Ethics Debate on whistleblowing at the second annual Compliance Week Conference taking place in Brussels from October 13-14 2014.

At the event, delegates will have the opportunity to discuss corporate ethics, compliance, risk management, due diligence and other related topics via panel discussions, keynote presentations, and breakout sessions.

The early registration rate is €350 off the full rate and will increase after July 31.