How the Integrity Agenda bridges intentions, actions and measurement

The Integrity Agenda is a framework of four core elements that align an individual’s actions with an organization’s objectives.

Successful organizations protect their reputations and maintain stakeholder trust by keeping their promises, respecting laws and behaving ethically. In this international and highly connected commercial environment, growing and protecting your business value may be especially challenging. 

Our approach to building your Integrity Agenda ranges from enhancements in areas of perceived weakness or issues — including governance, controls, culture and data insights — to full organizational design and structural implementation. We want to help companies safeguard and restore financial reputations.

EY Forensics focuses on embedding four core elements:

• Relevant and effective governance
• A supportive corporate culture
• Robust compliance controls
• Insights from qualitative and quantitative data

Governance

The effectiveness of a corporate Integrity Agenda depends heavily on your governance processes. These inform the operational framework for key business decisions, particularly those that affect customers, have legal ramifications or may inflict reputational damage. These processes need to actively support your purpose, culture and values—and empower employees to behave with integrity at all times. By giving employees the freedom to consider why and how the business does things instead of expecting them to just follow the rules and codes of conduct without a second thought, you can enhance innovation and entrepreneurial spirit across your organization while identifying competitive advantages.

This is good for employee morale and helps bolster your corporate reputation, making integrity more than a matter of legal necessity. Clients, investors and regulators may also understand and respect the company’s commitment to this core value.

Controls

Managers often see compliance as a necessary evil because associated controls have traditionally focused on preventing violations of laws, regulations and internal procedures. Businesses put these controls in place to avoid costly disputes, enforcement actions and penalties, and other sources of reputational risk. Companies also aim to maintain the right to operate in specific markets, tending to distinguish between activities permitted under two sets of standards that don’t always match: the letter of the law (legal) and the spirit of the law (ethical).

By integrating and aligning controls with and operational processes, we can help an organization gain benefits beyond purely functional protections and allow it to fulfil multiple objectives simultaneously. It can actively enhance the organization’s reputation and perceived value with stakeholders and make it easier to work with partners, partner companies, suppliers and regulators. This approach can also help organizations comply with complex laws and regulations in national and international markets.

Embedding appropriate controls across an organization is not easy. However, simplifying or automating routine compliance activities can reduce the risk of employee errors that often stem from a lack of training or insufficient awareness of rules and regulations.

Culture

In a culture of integrity, ethical behavior is encouraged, recognized and rewarded. People are empowered to do what is right, not just what is legal. Creating a culture of integrity can help reduce regulatory risk, improve employee morale and build stakeholder confidence in a company’s ability to deliver on its promises. However, establishing such a culture is not easy. It requires consistent leadership from the CEO and all managers. Integrity must be hardwired into the organization’s strategy, governance, compliance controls and day-to-day operations.

To achieve a culture of integrity, the business needs to consider the extent to which integrity is reflected in, for example, promotion, succession and incentive structures. Employees need to see that integrity cascades from the top, through all levels of the company. They must be empowered to live the company’s values within their own framework of beliefs. They must be supported by proper training inappropriate models of behavior and be given the tools to help them make ethical decisions.

For this culture to come alive, the organization must apply a humanistic perspective that truly places an understanding of human behavior at its core. Holding personalized trainings; offering seamless, timely support; and providing information when employees need it are just a few actions that will help meet the desired outcome.

Deep data insights

An effective Integrity Agenda is not a static program that should be forgotten once it is set up. It requires rigorous review and feedback mechanisms to help inform the organization’s strategy. Deep data insights should underpin your Integrity Agenda. Data analytics can help you monitor your company’s performance based on defined metrics. They can also enable you to develop insights into the aspects of your corporate culture that encourage ethical behavior and those that require close attention. Through the effective use of machine learning techniques alongside forensic data analytics, you can gain valuable qualitative and quantitative information on the way your Integrity Agenda is shaping the organization.

Data insights do not just help a company identify strengths and weaknesses in its governance protocols, compliance controls, cultural environment and operational processes, they can also measure the effect of an Integrity Agenda on the organization’s performance and identify commercial opportunities. These insights can provide valuable early warnings of potential threats, enabling leaders to intervene before situations escalate.