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Corporate Compliance Measurement (Ethikos)
Corporate Compliance Measurement (Ethikos) May/June 2004 - By Joe Murphy. The Measurement Challenge (Part 1): Introducing the Deep DiveMeasurement is essential for an effective compliance program. More and more we are seeing that government agencies and company management want to know whether our compliance efforts are working and having an impact. Those doing compliance work need to be able to demonstrate that the compliance program is more than a paper exercise. How can we respond to this expectation? How do we measure what we are doing? There are growing efforts to measure compliance programs using things like surveys, focus groups, self-assessments and questionnaires. These all have their place, but they also come with some serious limitations. Each depends on the good faith of the person providing the information. One need only picture an Andrew Fastow or a Bernie Ebbers participating in one of these exercises to see their limitations. The existing devices also tend to focus on what is readily quantifiable. There is, in fact, a major risk that any push toward measurement will, in turn, push people to measure what is most measurable, and use the tools that lead to the most quantifiable results. It is certainly easier to measure how many employees say they feel good, bad or indifferent than is it to measure whether anyone is actually engaged in accounting fraud or price-fixing. On the other side of the spectrum, the compliance audit is a tool that involves rigorous reviews, including testing the veracity of what employees say. Audits, however, come with their own baggage. Although I have personally championed audits in the compliance field for two decades, and government officials and others have sung their praises, seldom have I seen their use outside of environmental compliance and other traditional audit areas. Companies will certainly audit financial records, I-9 forms, and environmental conditions. But there appears to be an enduring resistance to a measurement device that is perceived as negative, and, by some, as a green-eyeshade checklist exercise.

Full Article: http://www.singerpubs.com/ethikos/html/deepdive.html

2006 Ethics-Governance.com