Business Ethics always seems to be a hot topic. Where does one draw the line between right and wrong? Are corporations bending the rules to achieve greater profits? Internal Auditors have an obligation to detect fraud, but may not always have the best tools or support. Bruce Anderson, Chief Ethics Officer at Health Net gave us objective measures and insights on how to predict compliance risk surrounding ethics policy. Some highlights of our interview provided us with the top 4 areas where companies should focus their efforts when creating a world class ethics program.
Top 4 Focus Areas When Predicting Compliance Risk
- Start with Industry Regulations. When starting your ethics program, you first should review what your industry regulations are and how often they get updated. For example, if you're a doctor's office, it would be the laws pertaining to delivery of medical services to patients, or if you operate a mine, it would be the laws and regulations for mining.
- Build a map for what your program should be addressing. Build a complete map of all of the legal and regulatory requirements. At this stage, you’ll be looking at local, state and federal level to help you determine what regulators are looking for. Then once you’ve mapped that out, approach litigation for your industry. Look at corporate integrity agreements and the varied prosecution agreements. Those are great ways to know what regulators are focused on. If they’re finding problems with competitors, they will likely ask you those same questions.
- Develop metrics. Use metrics to track, trend and report on regular intervals so you'll see how your operation is doing on each of these key measures. For example, if you're in a doctor's office, for new patients, you need to provide them with access to your privacy policies. So you’ll need to develop a metric that measures this. If you have a signed form, you can cross check against your roster of new patients, etc.
- Be prepared for regulators. They often don’t give you much time to prepare. So make sure there’s one central person that
can coordinate when regulators arrive. Determine what their requests are and what support this main contact will have to ensure regulators receive
their information timely. Having a monthly and quarterly reviews is the lean forward approach to ethics programs. Your organization will
need the following to create a world class ethics program:
- Know Your Compliance Requirements
- Constantly Monitor Operations
- Identify Your Outliers
- Conduct a Risk Assessment on Every Outlier Tip
- Derive the Management Action Plans
Competitive Advantages of an Excellent Compliance Program
There are a lot of competitive advantages by having a world class ethics program, and here are a few:
- Knowledge. Employee moral goes way up when they feel their voices can be heard. Your organization needs a culture where employees feel they can bring issues and ideas forward. This will encourage employees to push information up the chain of command.
- No Retaliation. It’s difficult and sometimes emotionally challenging to bring an issue to your boss. Take the perspective of your employees of what their mental strain would be like if they felt they would be retaliated against. Employees need to know there won’t be retaliation in the workplace.
- Detect problems early. If employees bring things forward early, they usually don’t turn into larger problems. Consider providing incentives for bringing things to management’s attention. Start first by rewarding suggestions and ideas that improve the company. Additionally, collaborative live trainings are a great way for management to allow employees to share and address concerns. This might be a good forum to let employees know that addressing a problem early can be much more cost effective than waiting till it becomes a bigger problem.
- Focus on optimal profits. Don’t just focus on maximum profits, because this might get you into trouble by getting to the profit goal by any means necessary.
Optimal profits are obtained when we have achieved the right balance of communication with your employees.
How to Handle Challenging Conversations?
Ethics programs rarely have a written manual on “how” the conversation should start when dealing with a complex and challenging ethics issue. Here are some tips to consider when you need to have these conversations.
- A fact-based approach. Bruce recommends that ethics professionals try to be as approachable as possible so that employees feel they can open up. If you go in with the attitude of, “Hey we’re just here to figure out what happened,” you’re more likely to get at the truth. Bruce says to, “Check your bias in at the door.” Memories are fallible, so try to investigate early.
- Empathy and Education. Try to see things from the employee’s perspective. The employee might have felt that he/she was helping the company with certain actions, such as using another person’s password or account to get things done more quickly. Once you have heard things from the employee’s point of view, it’s up to the ethics professional to help the employee understand why the policy exists and how not following the policy can negatively impact the company.
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More about Bruce Anderson
Entire Bruce Anderson Interview
Bruce directs Medicare, corporate compliance and ethics programs for Health Net, one of the largest healthcare providers in the US, headquartered in California. He oversees initiatives related to compliance with federal laws, corporate compliance daily operations, and compliance training and education. Bruce holds a Master’s Degree from the University of Pennsylvania and several certifications in the healthcare field including HIPAA Privacy. Bruce is a Certified Compliance and Ethics Professional (CCEP).