Transparency International has published its 2022 Values Added Report, which provides useful pointers on the practical steps companies can take to enhance their ABC frameworks by incorporating a values-based approach.
The Report’s recommendations are consistent with the broader shift away from a purely rules-based compliance approach, towards a model in which employees are empowered to navigate grey ethical areas by reference to corporate values and culture.
This shift reflects what we are seeing from the SFO, FCA and US authorities, which are all placing increasing emphasis on corporate culture and values when evaluating ABC compliance programmes.
The Report sets out the following key steps in implementing a values-based ABC programme.
- Assessing existing values / determining desired values
An organisation’s existing values can be determined through consulting employees in workshops or by carrying out staff surveys in order to assess how employees perceive the company’s values, and how well understood and integrated they are. Once the values within a company are understood, these can be evaluated against its ABC risk assessment and broader compliance programme to identify any areas for improvement. The Report recommends having between three and five values, so that employees can easily keep them in mind when making decisions.
- Embedding values
Embedding the company’s values into the day-to-day life of the company is essential. The Report recommends including values-based questions as part of the hiring process, and conducting periodic and role-specific training to reinforce the company’s values. In an investigation, prosecutors will take into account what training employees have received and will assess the steps taken by the company to ensure that the company’s policies (including its values) have been integrated into the organisation. Consideration should also be given to ensuring reward structures are aligned to corporate values.
- Measuring the impact of the company’s values on anti-corruption
Companies should assess on an ongoing basis how well the incorporation of values is working in practice on an ongoing basis, and where enhancements are required.
The Report suggests carrying out surveys (supplemented by employee interviews, and in particular exit interviews, as well as appraisals and workshops). This in line with guidance from prosecuting authorities such as the US DOJ, who encourage companies to survey their employees to gauge improvements to the compliance culture and evaluate the strength of the internal controls. Consideration could also be given to incorporating lessons learned reviews into investigation and remediation exercises which focus on values.
While values-based ABC programmes are nearly always more effective than purely rules-based programmes, our experience is that an ABC programme based on both rules and values works best. A combined approach provides clarity to employees where the company has fixed rules (e.g. gifts and entertainment limits), but also enables employees to identify more complex ethical issues.