Beyond federal legislation such as Sarbanes-Oxley and the FSGO, ethical rules and regulations are expanding on a widespread basis across various state and local agencies, self-regulatory bodies, and industries.
For instance, California now requires that all organizations with more than 50 employees or contractors provide "sexual harassment" training to all supervisors every two years. In addition, new hires and new promotions that qualify as supervisors must be trained within six months of hire/promotion. The regulations were tightened significantly in August 2007, now requiring outside trainers, specific content, interactive participation, and documented proof of training.6
As another recent example, any company contracting with the U.S. Department of Defense, Department of Veterans Affairs, or the Environmental Protection Agency must have an ethics program in place. A new proposal published in the Federal Register in February 2007 would extend this requirement to any government contractor winning a contract of $5 million or more on a project lasting 120 days or more with any U.S. department or agency. The rules require a comprehensive ethics compliance system, including written ethics policies, periodic ethics training, and posted materials for employees to reach agency inspectors in the case of possible wrongdoing.7
Finally, ethical rules and ethical training (continuing education) requirements applicable to accountants, lawyers, realtors, engineers, brokers, doctors, therapists, clergy, and other professionals are expanding in concert with the general legislative environment. For instance, just a few years ago, only a handful of state boards required their CPAs to satisfy ongoing ethics training. Today, 39 states require an average of two hours per year, with eight states only being added to the list in 2006.8 It's similar with lawyers. For instance, Colorado now requires seven hours of ethics education every 36 months.9
While it appears that the web of ethics-based legislation and compliance requirements will only expand in the coming years, let's look at the bright side. Although organizations are now subject to increased "red tape," they also have an incredible business opportunity. It's a new opportunity to recast corporate vision, mission, values, and principles. It's a new opportunity to create a shared purpose and an invigorated culture. It's a new opportunity for leadership to model exemplary behavior and applaud the ethical actions of team members.
Yes, ready or not, your organization is now subject to federal, state, and industry-specific ethics requirements. You can either hide your head in the sand and plead "ignorance" when the regulatory agencies come knocking or you can work to comply with this web of ethical requirements, while repositioning your organization's culture for greater longevity and success.
The ROI is simple:
A more ethical and excited culture today means
a more loyal and productive organization tomorrow!
"I came to see, in my time at IBM,
that culture isn't just one aspect of the game; it is the game."
(Lou Gerstner, IBM CEO)
Read more: Plan of Action
6California AB 1825, Fair Employment & Housing Commission, Final Regulations, August 17, 2007.
748 CFR Parts 2, 3 and 52, Federal Acquisition Regulation Case 2006-007, Contractor Code of Ethics and Business Conduct, February 16, 2007.
8The CPA Journal Online, October 2006, www.nysscpa.org/cpajournal/2006/1006/essentials/p58.htm.
9Colorado Rules of Professional Conduct, www.coloradosupremecourt.com/CLE/cle_home.htm.
"Be sure you are right,
then go ahead."