Managing ethics and legal compliance: What works and what hurts

This survey of employees at six large American companies asked the question : "What works and what hurts in corporate ethics/compliance management?" Th e study found that a values-based cultural approach to ethics/compliance ma nagement works best. Critical ingredients of this approach include leaders' commitment to ethics, fair treatment of employees, rewards for ethical con duct, concern for external stakeholders, and consistency between policies a nd actions. What hurts effectiveness most are an ethics/compliance program that employees believe exists only to protect top management from blame and an ethical culture that focuses on unquestioning obedience to authority an d employee self-interest. The results of effective ethics/compliance manage ment are impressive. They include reduced unethical/illegal behavior in the organization, increased awareness of ethical issues, more ethical advice s eeking within the firm, greater willingness to deliver bad news or report e thical/legal violations to management, better decision making because of th e ethics/compliance program, and increased employee commitment.