Introduction

Governance professionals reveal how their companies run employee compliance training programs

Introduction

Governance professionals reveal how their companies run employee compliance training programs

Compliance failures pose potentially serious risks to companies, such as a regulatory fine or shareholder lawsuit and the associated dangers of reputational damage, wasted management time and lowered share price. One of the key weapons in a company’s armory against these outcomes is its compliance training program. Such efforts, if carried out effectively, can ensure employees understand what is correct – and incorrect – behavior and make them more likely to behave correctly.A key board responsibility is overseeing risk, so it is important that directors ensure management and executives put in place and maintain appropriate risk-management policies and procedures, such as an effective compliance training program.In this special report we present data based on a survey conducted among in-house governance professionals such as general counsel and corporate secretaries to give important insights into what companies are training their employees about, the tools they are using to do so, whether compliance training is linked to pay and whether and how companies are assessing their own efforts.

Key findings

Many companies train employees on a range of compliance topics, most frequently their code of conduct and ethics (91 percent of respondents), cyber-security (86 percent) and the compliance hotline (68 percent).

Respondents at mega-cap companies are more likely than those at firms of other market caps to see training on the code of conduct and ethics (100 percent), compliance hotline (96 percent) and FCPA/bribery and corruption (93 percent).

Fewer than half (46 percent) of respondents’ corporate employee compliance training programs include board members. Around the same number (43 percent) say their programs do not include directors.

Fewer respondents at US companies (35 percent) say their boards are included in employee compliance training programs than do those in Canada (53 percent) and Europe (50 percent).

Overall, the most frequently cited training method is online self-guided courses (77 percent of respondents), followed by live in-person or online presentations (60 percent) and online educational resources (58 percent).

Almost half (44 percent) of respondents say their company updates its code of conduct every year and a further 16 percent say their company does so every two years. A quarter say this happens less frequently than every two years.

Most respondents (63 percent) say their company does not link ethics and/or employee compliance training to compensation. At mega-caps, this figure falls to 35 percent; among the proportion of mega-cap respondents who say their company does make such a link, 50 percent say it is applied to all employees.

Slightly more than a quarter (26 percent) say their company analyzes the impact on employee behavior of its compliance training program.

Around a fifth (21 percent) of all respondents say there is something that could help improve their company’s employee compliance training program, while 15 percent say there is not.