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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
by Corinne LagacheSenior Vice-President, Trade Compliance and Export Control, Safran
Education and training are powerful channels to create an effective culture of integrity in a company. The amount of human and financial resources which an organization allocates to training activities often provides a good indication of its actual commitment to ethical business conduct. This Chapter describes the various tools and training methods that companies can use to make their values and ethical rules known to their employees and other key stakeholders. We stress here the importance of adapting training sessions to their audience by making them directly relevant to the day-to-day professional responsibilities of participants. We also discuss how best to structure an education and training programme and how to improve its effectiveness over time.
Education and training possibly represent your most important line of defense against corruption and other ethical risks. At a time when the pages of regulations governing business practices are piling up, conducting training activities is the best strategy for efficiently communicating compliance messages to your colleagues and other company stakeholders. All major government and industry guidelines on corporate ethics and compliance programmes emphasize the role of education and training in preventing misconduct and creating an effective integrity culture within a company.
ETHICS AND COMPLIANCE TRAINING AND THE B20
Underscoring the importance of education and training to promote a culture of ethics and compliance, the world business community, represented by the B20 Task Force on Improving Transparency and Anti-corruption, designated the development of training materials on anti-corruption compliance and the delivery of a ‘train the trainers’ programme aimed at compliance officers from the private sector as one of its key priorities for action at the G20 Summit of June 2012 in Los Cabos, Mexico.
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The advent of a new ethical era
If we go back in time, some will remember a not so distant past when bribing a foreign public official was not forbidden by criminal law and when, in a number of countries, a bribe paid to such official was even deductible from corporate income as a commercial expense. Only a few decades ago, the United States was the only country in the world − with, to some extent, Sweden − that had criminalized international public corruption. It took huge efforts to bring about strong and innovative international conventions, and to transpose their provisions into national law. It took even more time to see these national criminal law provisions being effectively enforced.
The advent of this new ethical era required the acquisition of new reflexes. Abstaining from offering bribes, resisting solicitation or extortion, refusing to create slush funds, rejecting illegal gifts and hospitality, disapproving illegal political contributions: all of these are behaviours that corporate managers and employees have had to integrate in their daily professional life. Practices that were previously considered ‘business as usual’ had to be replaced with steadfast attitudes that could ensure full compliance with the newly introduced legal and ethical standards.
Making such a ‘Copernican’ reform effective in the minds of everyone in your organization requires more than producing a glossy leaflet with a corporate Code of Conduct or a colourful poster with company values knitted on office walls. What is required to bring out such revolution is setting up a genuine education and training programme which helps everybody in the company understand and respond to ethical threats and challenges.
THE IMPORTANCE OF ETHICS AND COMPLIANCE TRAINING FOR RAISING PRODUCTIVITY AND BOOSTING GROWTH
In the last quarter of 2012, ICC and the Institute for Economic Research (Ifo) in Munich asked 1,156 experts in 124 countries whether they agreed stronger emphasis on ethics and compliance training for business in their respective countries would help productivity and attract more foreign investment.
Experts in emerging countries overwhelmingly supported the statement. In Africa, 90% of experts agreed and in both South America and Asia the consensus level was 88%. There was also a high level of agreement from experts in Eastern Europe and the CIS countries where the statement was supported by 87% and 85% respectively.
It is interesting to note that the more a country is perceived to be subject to widespread corruption, the greater is the belief that ethics and compliance training is needed to help boost the economy.
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The need for a genuine corporate training programme
The goal of education and training activities is to communicate the structure and substance of your company’s ethics and compliance programme to its directors, officers, and employees as well as to its business partners, customers, and other stakeholders. The underlying objective is to help everyone understand their individual responsibilities under the ethics and compliance programme and to guide them in making the right decisions when confronted with risky situations.
An effective education and training programme should therefore aim at increasing awareness about ethics and compliance issues by conveying key messages throughout the year about the importance and seriousness of compliance requirements. The key challenge here is to bridge the gap between the sometimes ‘dry’ legal provisions contained in governmental regulations and corporate policies, and the day-to-day realities of the company’s business operations. In other words, trainees should become so savvy about regulatory and ethical standards that they acquire a sense of ownership of the company’s ethics and compliance programme.
IS TRAINING AND EDUCATION A PRIORITY FOR ALL COMPANIES?
Not really. According to the results of the Global Anti-Bribery and Corruption Survey 2011 (commissioned by KPMG and conducted with 214 executives of large companies in the United States and the United Kingdom), one in five respondents does not have a training programme and about one in three stated that training for employees is required less than once a year.
To be effective, training activities should be developed in such a way that they provide a ‘rehearsal for real world situations’. Explanations about key laws and regulations should be complemented by real-life examples and case studies that mirror the types of circumstances that can be experienced on the ground. This way, training can help employees adopt the right behaviour at all times. In other words, training sessions should not be designed as law classes but deliver practical guidelines for conducting daily work duties.
Education and training also play an important role in feeding your company’s risk assessment process. First, training sessions help your colleagues identify, understand, and measure the various ethics and compliance risks which they may encounter on the ground. Second, by providing a platform for open and frank dialogue, they give participants an opportunity to speak up about new risky situations which they may have faced in their work and which may require the introduction of new mitigation measures by your company.
Training activities should be conducted on a regular basis. A reasonable objective is to provide a minimum of basic compliance training to all company employees, through regular information about the evolution of applicable laws and the related internal compliance procedures. As discussed below, longer and more specialized training sessions may be scheduled every year for employees (and if necessary business partners) whose responsibilities expose them to higher risks. In addition, all new[Page103:]employees should be requested to participate in an ethics and compliance training session within approximately 30 days of their hire date or of the effective date of a merger or acquisition. Finally, a comprehensive training programme should be launched following the introduction or revision of the company’s Code of Conduct or upon the initial implementation of the company’s ethics and compliance programme.
All company employees, from top to bottom and regardless of their job function, should follow basic compliance training. You should not stop at the doors of the Board room; your directors also need to be informed about regulatory and ethical requirements. Employees whose job function or geographic location expose them to higher or specific ethical and compliance risks (for example those responsible for international sales or tenders, merger and acquisitions, or offsets) should be requested to participate in more specific and more intensive training sessions. Such enhanced training activities may be provided in the form of one-on-one or on-the-job training to ensure that compliance is integrated into the employee’s daily activities and does not remain a theoretical concept. Specialized training should also be given to employees in positions with compliance responsibilities, such as legal, accounting, risk management, control, and internal audit.
A NEGATIVE EFFECT OF THE FINANCIAL AND ECONOMIC CRISIS ON CORPORATE ETHICS AND COMPLIANCE TRAINING PROGRAMMES?
“After years of cost cutting, relatively labor-intensive measures and activities were less frequently cited as examples of anti-bribery/anti-corruption controls in the respondents’ businesses. For example, as internal audit and compliance functions are trimmed back, their lower priority areas of responsibility, such as training, also appear to have suffered. As many as 42% of respondents had not received training on anti-bribery/anti-corruption policies. Without adequately trained employees, the ability of companies to identify issues or robustly investigate and act on allegations is also likely to be diminished”.
Excerpt from the 12th Global Fraud Survey by Ernst & Young (“Growing Beyond: a place for integrity”) conducted with 1,700 interviews in 43 countries between November 2011 and February 2012
Business partners, including agents, service providers, distributors, and suppliers, as well as customers and other stakeholders should be informed about the company’s corporate policies and ethics and compliance programme through specific communication channels, such as pamphlets, letters, and web-based tools. In certain circumstances, a company may choose to request certain business partners (for example those who interact with government officials on behalf of the company) to participate in the corporate training programme along with other employees or through dedicated training sessions.
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DO COMPANIES TRAIN THEIR BUSINESS PARTNERS’ EMPLOYEES?
Few companies do, according to the KPMG Global Anti-Bribery and Corruption Survey 2011. The survey shows that three in five companies with compliance programmes that incorporate employee training do not require any third-party representatives to participate in their training sessions.
Education and training activities are meant both to introduce theoretical concepts and to explain their operational implications for daily business activities.
BASIC COMPLIANCE TRAINING USUALLY COVERS THE FOLLOWING SUBJECT AREAS
For employees whose job function calls for additional compliance training, the content of advanced training sessions should be tailored to their specific needs. For example, special sessions dedicated to sales managers may focus on compliance policies and procedures for appointing vendors, giving and receiving gifts or extending hospitality. Other special sessions may be dedicated to antitrust policies. In-house lawyers may benefit from in-depth sessions on conducting anti-corruption due diligence for the appointment of business partners or during the negotiation of a joint venture agreement.
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As emphasized above, training activities should as much as possible include case studies and examples which relate to the day-to-day professional activities of participants. A useful point of reference is the training tool RESIST (Resisting Extortion and Solicitation in International Transactions) which develops real-life scenarios and provides practical guidance to company personnel on how to prevent and respond to an inappropriate demand by a customer, business partner or public official in the most efficient and ethical way. Chapter 13 of this Training Handbook (‘Resisting Solicitation’) provides an explanation of RESIST and of the way it can be used by companies for their training activities.
Frequently the question is asked: “Should my company conduct its own training sessions with its own personnel, or should it call upon external resources to shape, organize, and conduct training?” The market is full of specialized and competent consultants who can provide your company with their training abilities and their vast expertise. Having recourse to a consultancy may indeed be your best option if your company is relatively small and does not have the human resources to cope with the new and demanding challenge of providing up-to-date ethics and compliance training to its personnel.
But as might be expected, this option comes with pros and cons: if you call upon an external service provider (such as a law firm, a human resources specialist, an academic or an anti-corruption specialist), you will miss the down-to-earth touch which only members of your company’s personnel can provide. Remember that when organizing ethics and compliance training sessions, a large part of the effectiveness lays in creating the conditions for a real-life dialogue between trainers and trainees. Only your own staff has an intimate knowledge of your company’s products and processes, and the risks that may be associated with them. For smaller companies, however, it may be difficult to entrust the totality of their training programme to a specifically designated person. In such circumstances, hiring a consultancy may be an adequate option.
In the context of this Training Handbook, ICC’s recommendation is to follow the route of a train-the-trainers programme: specifically, your company could designate a member of its personnel to follow ICC courses based on this Handbook and entrust this person with the task of spreading the knowledge acquired through this training programme to his or her colleagues in the company.
The learning characteristics of adult learners are varied and may be different from those of younger learners. Some learn through listening, others through seeing, and many by doing. So, to keep education engaging to a diversified audience, the key is to develop a variety of educational formats and supports, such as videos, lectures, webinars, roundtable discussions and ‘brown bag’ lunches.
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Adult learners tend to value problem-centred and results-oriented teaching methods. They usually expect to contribute their own knowledge to the learning experience and seek education that relates or applies directly to their professional needs. The use of case studies and real-life scenarios (which trainees can be invited to share anonymously) often provides for more practical learning and hits home more effectively. The analysis of case studies should include an assessment of possible courses of action and an examination of their corresponding consequences. To avoid embarrassing anyone from the company, it is wise to ‘blind’ real-life examples by not referring to explicit names or past events.
Face to face training (with an instructor providing the training to a physically present audience) is generally considered the most effective method for delivering educational activities. Live sessions are more interactive and allow participants to raise questions and exchange views with their colleagues. For smaller companies, this will very often be the ideal solution. However, it will not be a realistic option for many companies with several tens of thousands of employees scattered around the globe. Online training courses, also known as e-learning, provide, in such environments, an interesting alternative. There are many benefits to the use of computer-based or web-based training programmes. They can be accessed at any time and any location. They provide a good medium for delivering key compliance messages to a wide audience in a time-effective manner. They also help compliance officers and senior management keep track of who has been trained and who has not.
Many e-learning products with a focus on ethics and compliance are available on the market. Experience shows that e-learning products which are tailored to the specific needs and circumstances of a company are more effective than those simply providing ‘off-the-shelf’ solutions. Some e-learning providers offer ‘customized’ solutions, in which a basic template can be altered to meet individual specifications, while others also develop ‘custom’ solutions, in which the e-learning tool is designed from the ground up to fit the requirements of an individual client. Whatever training method and support is chosen by the company, the litmus test is to design educational and training activities that are directly relevant to your audience.
Another way for companies with very large and geographically widespread workforce to deploy their training activities is to introduce a ‘train-the-trainers’ programme in which staff members from the enterprise’s different business units and subsidiaries develop the skills and knowledge to plan and present effective and interactive training sessions to their colleagues. By training its own trainers, a company empowers its personnel and directly engages them in the mission of promoting ethics and compliance, thereby facilitating the buy-in of employees for the corporate ethics and compliance programme.
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EFFECTIVE TRAINING SHOULD BE:
As for every part of your company’s ethics and compliance programme, education and training activities should be subject to continuous adaptation and improvement based on a regular review of their effectiveness.
How do you measure the effectiveness of your training activities? The first measure of success is of course the absence of violations of your company’s ethical rules. However, corrupt practices are often hidden and may sometimes be revealed several years after they have occurred. It is therefore advisable for companies to use a wide range of indicators to gauge the success of their training activities. At the most basic level, the number of questions raised and the degree of active participation during training sessions give a preliminary indication of the impact of the training method employed. Do your colleague employees feel at ease during the sessions, do they trust the trainers, and do they come forward to ask relevant questions? Feedback from participants can also be collected through a survey: to what extent did you find the training useful, interesting and well-organized? Was the content meaningful and clear? Annual or semi-annual performance review sessions also provide excellent opportunities to obtain feedback from your colleagues on their learning experience.
Since the ultimate goal of training is to influence behaviour (helping personnel to act in the right way when confronted with a risky situation), the effectiveness of a company’s training programme should also be measured in terms of its concrete outcomes. For example, an increase in the use of the company’s ethics hotline or whistleblowing system may be indicative of a stronger awareness of ethics and compliance issues. Some companies also choose to subject their employees, or certain categories of employees, to a comprehensive compliance examination to make sure that they fully grasp the concepts and can identify the correct ethical and compliant path when confronted with ‘grey areas’ or when facing solicitation and extortion.
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Feedback from participants and an analysis of the concrete outcomes of the training programme should help you identify learning gaps and areas for improvement. These may relate to the adequacy of content, the frequency of training, or the effectiveness of the teaching method. Benchmarking one’s training programme with those provided by companies from the same segment of industry or services is another useful way to identify strengths and weaknesses and to generate new ideas. Since education and training is above all a human experience – in which participants value spontaneity and seek inspiration – companies should not hesitate to be creative and to innovate by introducing new teaching methods and learning supports.
Finally, in order to ensure employees’ knowledge of ethics and compliance issues remains current, companies may wish to introduce regular refresher courses for managers and employees with certain sensitive functions. Monthly newsletters and other corporate communication channels can also help to reinforce compliance messages throughout the year. Indeed, repetition is not only an effective teaching method, it also shows that the company is consistent about compliance and is fully committed to help its employees and other key stakeholders adhere to the highest ethical standards.
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About the author
Corinne Lagache is Senior Vice-President for Trade Compliance & Export Control at Safran, a leading high-technology group with three core businesses: aerospace, defense, and security. Operating worldwide, the Safran group has 62,500 employees. Mrs. Lagache joined Safran from EADS, where she was Vice President of Risk Management and Control as well as Group International Compliance Officer. She graduated in finance, economics and taxation from the Political Science Institute of Paris (Sciences Po Paris) and Paris Dauphine University. Mrs. Lagache is an auditor of the French Institute for Higher National Defense Studies and a Member of the Steering Committee of the International Forum of Business Ethical Conduct.