Want Higher Revenue Growth? Get a Compliance Ethics Program


What does it take to grow a business?

An honest business requires a sound business model, hard-working employees, long hours, and a "can-do" attitude, right? Of course, there are companies that take a different route and uses incentives to bribe those in power, hoping it will fast track their success and provide new growth that would have otherwise been unattainable.

However, new studies show that strong compliance ethics do lead to strong revenue growth, thereby making the argument for corruption obsolete.

E&Y Corruption Survey

Ernest & Young recently conducted a survey of 3,800 employees of large businesses from 38 countries. Of those surveyed, 40 percent said the company's reported financial performance was better than actual performance and 61 percent believe corruption and bribery are widespread in rapid-growth markets.

These stats are hardly surprising when you consider that 42 percent of respondents said their company does not have anti-corruption policies, 25 percent reported their organization doesn't provide a hotline to report incidents, and only half said that top management understands the business environment in local markets.

Compliance = Revenue

The irony in this, however, is that companies reporting strong revenue growth are those that also report having and promoting compliance programs. The employees at these companies were 2x as likely to give their company's ethical standards a "very good" rating, while 50 percent were more likely to say that operations in different countries met the same standards of ethics. These companies also established clear penalties for failing to observe compliance policies.

Get with it

So why do companies persist in corrupt dealings when ethical business have strong revenue growth?

One of the problems could be a lack of communication. Although 44 percent of senior managers said they frequently discuss the importance of ethics, only 30 percent of their employees agreed with that statement. In addition, 25 percent said they have never heard a manager discuss the importance of ethics.

Who is right?

It doesn't matter. Perception is reality. This communication "shortage" creates an environment of confusion in which employees may know what is expected while the methods used to obtain strong results may be questionable.

If top managers want to create a strong, lasting company with high revenues, they must clearly and frequently communicate their stance regarding ethical behavior. By implementing a culture of honesty and integrity at the top, employees will learn which behaviors are allowed and which are not.

Note: This article and the opinions expressed here are from Russ Warner, VP of Marketing at Converus, makers of EyeDetect, an innovative, new deception detection technology that could help organizations monitor ethics and compliance programs.