Managing Employee Conduct Risk for a Stronger Culture

In the modern corporate landscape, the significance of a healthy organisational culture cannot be under-estimated. A vibrant and inclusive culture doesn’t just boost employee morale and engagement; it can be a powerful driver of sustained success for your organisation. One pivotal aspect of fostering such a culture is the proactive management of employee conduct risk, an area that is becoming increasingly complex to manage. This involves ensuring that employees’ behaviours and actions align with the organisation’s values, ethics, and regulatory standards. It’s about bridging the gap between what we say we will do and what we actually do!

Managing employee conduct risk isn’t merely a matter of compliance; it’s an investment in the long-term vitality of your organisation. Here’s why:

  1. Upholding Values: Organisational values are the bedrock of culture. By consistently addressing and managing conduct risk in a timely manner, companies demonstrate their commitment to these values, fostering a sense of trust and integrity among employees. When employees witness their peers and leaders upholding these values, and holding others in the organisation accountable, it inspires them to do the same.
  2. Mitigating Reputational Damage: A single instance of unethical behaviour can tarnish a company’s reputation irreparably. These days it’s often not what actually went wrong that matters, it’s how it was allowed to happen in the first place and how the organisation responds to ensure it doesn’t happen again that matters. Effective conduct risk management ensures that employees’ actions are in line with the organisation’s ethical standards, reducing the chances of scandals or controversies that can damage public perception.
  3. Boosting Employee Morale: When employees see that their organisation takes a strong stance against misconduct, it enhances their sense of pride in being associated with the company. This, in turn, improves job satisfaction and motivation, leading to increased productivity and reduced turnover rates. You only have to look at strong organisational cultures to see these common elements: happy and engaged employees, clear standards of behaviours that are upheld, a sense of community, and a willingness to get along and achieve the mission of the organisation.
  4. Enhancing Stakeholder Confidence: Shareholders, customers, and partners value companies that prioritise ethical conduct. In fact, I would argue that in today’s business climate, this is an under-appreciated asset that companies should be investing in further as a way to set themselves apart from their competition. A robust conduct risk management strategy signals to stakeholders that the organisation is committed to sustainable and responsible business practices. With the rise globally of ESG (Environmental, Social and Governance) as a hot topic for investors, now more than ever is it important for organisations to focus on the ‘G’ in ESG. We are seeing a rise in organisations looking to strengthen their policy management, introduce whistleblower and ethics hotlines and deliver training on conduct risks to demonstrate to investors that their ESG credentials have some backbone.
  5. Attracting Top Talent: In today’s competitive job market, prospective employees seek organisations with positive cultures and strong ethical values. A well-managed conduct risk strategy can serve as a powerful recruitment tool, helping the company attract and retain top talent. Attracting talent as we all know is only one-half of the equation, retaining top talent is the other half and a strong conduct risk strategy shows your people that you are prepared to “put your money where your mouth is”.
  6. Regulatory Compliance: Compliance with industry regulations and laws is crucial for avoiding legal penalties. An organisation that takes employee conduct risk seriously is more likely to navigate regulatory challenges successfully, minimising legal and financial risks.
  7. Fostering Innovation: A culture that encourages open communication and accountability stimulates innovation. When employees feel safe to voice their ideas and concerns, it fuels creativity and problem-solving whilst building trust and therefore contributing to the organisation’s long-term growth.
  8. Sustaining Long-Term Success: Good businesses are built for the long run, and so is their culture so it’s vital that you prioritise investing in your conduct, risk, and compliance program. Effective conduct risk management nurtures a culture of shared responsibility and accountability that can weather challenges and changes over time, ensuring the company’s longevity.

In conclusion, managing employee conduct risk is an essential component of cultivating a robust and vibrant organisational culture. It goes beyond compliance, serving as a foundation for trust, reputation, employee engagement, and sustainable growth. By proactively addressing conduct risk, organisations lay the groundwork for a brighter future where ethics and values are at the forefront of their journey to excellence. Taking this step doesn’t need to be overly complex or costly for your organisation, there are now numerous tools, platforms, and software programs that can help.

Take 2 mins to check out our conduct risk solution Corethix and if you would like to learn more about how you can strengthen your conduct risk program whilst engaging your employees more readily, get in touch.

Your reputation is everything. Do you have an integrity partner to help you make the right decisions? We can help.

About Darren Murphy

Darren Murphy’s expertise spans his 25-year career in law enforcement as a detective in the Fraud Squad with the NSW Police Force and within the corporate sector. Across his career, Darren has managed hundreds of complex and sensitive whistleblower investigations, including transforming a traditional whistleblower hotline into a full-service Speak Up Hotline at one of Australia’s largest financial institutions. From internal and external fraud, bribery, corruption and employee misconduct, Darren is an industry leader in integrity and conduct risks. Darren is passionate about protecting an organisation’s reputation, people and bottom line, and looks to help senior executives implement a proactive approach to how they manager their fraud, corruption and integrity risks.

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