Prioritizing Process

Empowering the Corporate Ethics and Compliance Function

The Ethics and Compliance function is gaining traction within corporations. Companies must determine how to best facilitate performance within this function. A debate continues among business professionals, scholars, and regulators over the optimal structures and best methods for reporting Ethics and Compliance issues. One key sticking point is whether certain high-level management functions should be unified in a single position or divided among several positions. This issue has resulted in siloed and ineffective approaches to Ethics and Compliance.

In order to improve Ethics and Compliance functions, corporations must go beyond their focus on reporting structures. Corporations should broaden their perspective and consider informational processes that foster clearer communication, facilitate information flow, and integrate the senior managers’ Ethics and Compliance efforts across their organizations. By adopting a process-oriented focus, corporations will gain insight into how the Ethics and Compliance function can better protect them from Federal Corrupt Practices Act violations, regardless of the reporting structures they adopt.

This Article seeks to examine the relationship between structure, process, and compliance failures in the Federal Corrupt Practices Act Context. First it offers contrasting case studies from ADM, Wal-Mart, and Halliburton to highlight the comparative importance of effective informational gathering and decision-making processes over structural reporting lines. Second, this Article puts the comparison in the context of the structural debate over Ethics and Compliance reporting which helps to illuminate the justifications each company may have had for their reporting structure. Third, this Article discusses the role that a process-oriented approach should play for effective Ethics and Compliance. Finally, it applies the first step of the process-oriented approach to the three companies and analyzes how process is essential for accomplishing successful Ethics and Compliance.

The full text of this Symposium is available to download as a PDF.