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The Key to CECO Success: Wearing Two Hats

Career tree concept

A recent study[1] that’s conducted annually by LRN, a company that provides solutions to help employers mitigate risk and foster a values-driven culture, looked at how the ethics and compliance function operates within organizations across the globe.

The companies that responded to the LRN study were assigned a PEI (Program Effectiveness Index), which placed them into either the upper or lower quintiles. The PEI was determined by business leadership, corporate conscience, celebration of acts in ethical leadership, frequency of employee application of the company code of conduct and the perceived effect of ethics and compliance (E&C) education on employee behavior and decision-making.[2] The companies that placed in the higher quintiles had a higher PEI score, which demonstrated more emphasis on the value of ethics and culture in the workplace. Those companies in the lower quintiles had a lower PEI score, which showed less engagement and focus on ethics and culture in the work environment.

The study found that the companies in the higher quintiles were better at implementing education and communication tools as a part of their E&C toolkit.[3] They also used more communications channels to share updates and make an impact with employees.[4] The companies in the lower quintiles were twice as likely to report funding or staffing constraints for E&C employee education.[5]

Other key findings from the study included:

  • Reporting Structures Matters: When chief ethics & compliance officers (CECOs) report directly to the CEO their effectiveness is more noticeable in terms of support, resources and influence in driving E&C programming than if they reported to  a lower function of the company.[6]
  • Impact of Dual Roles as CECO and General Counsel: CECOs who report to CEOs and also serve as general counsel (GC) are found to be more effective in driving E&C activity than CECOs who don’t have a place at the C-suite table.[7]
    • CECOs who wear “two hats” are more likely to be recognized as leaders and allotted ample resources for training employees, particularly online and through mobile devices, and empowered to foster facilitated group discussions.[8]
  • Importance of Goal-Setting and Collaboration: The most effective CECOs are goal-oriented, gather feedback from colleagues, generate more outputs and use more rigorous metrics when compared to their peers.[9]
    • CECOs who also act as GC are twice as likely to view the development of an ethical culture as their main role, and they may be more effective due to their senior-level status, ability to work across silos and collaborative nature with middle managers.[10]
  • Recognizing C&E Leadership: Businesses with programs led by CECOs who are also the GC are considerably more likely to recognize and appreciate ethics and compliance leadership.[11]
  • Influence of Senior Leaders: If E&C practices are championed and adopted by senior leaders, they are more likely to be adopted across the company.[12]

In conclusion, the study found that the most successful E&C programs have support starting at the top, which may lead to how employees, processes and technology are managed. Faced with an increasingly complex and ever-changing regulatory environment, an integrated, collaborative approach to ethics and compliance management can be an effective model for all-sized companies. Click here to read the full LRN study report.

Consider learning about how HCM platforms like ADP SmartCompliance® can help companies manage HCM-related compliance and find efficiencies.


Learn More About ADP SmartCompliance®

The information provided in this blog post is for informational purposes only and not for the purpose of providing accounting, legal, or tax advice.  The information and services ADP provides should not be deemed a substitute for the advice of any such professional.  Such information is by nature subject to revision and may not be the most current information available.


[2]!/reports-sample/effectiveness, page 4

[3]!/reports-sample/effectiveness, page 24

[4]!/reports-sample/effectiveness, page 24

[5]!/reports-sample/effectiveness, page 26

[6]!/reports-sample/effectiveness, pages 7, 13

[7]!/reports-sample/effectiveness, page 8

[8]!/reports-sample/effectiveness, pages 10, 11

[9]!/reports-sample/effectiveness, pages 11, 12

[10]!/reports-sample/effectiveness, page 12

[11]!/reports-sample/effectiveness, page 14

[12]!/reports-sample/effectiveness, pages 15, 16




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