Ethical agenda starts with board

According to the 2007 European corporate identity survey, a report into 500
of the largest publicly listed companies in Europe by
Integrity
Interactive and the Association of Corporate Counsel, ethical business
issues are increasingly becoming part of the board agenda.

Despite this, there is no real evidence that the increase in corporate
governance and compliance demands have resulted in a subsequent improvement in
procedures.

The research found that while the majority of heads of legal and chief
compliance officers think that pressure for improved ethics and compliance
programmes will increase from stakeholders, only 56% said they had the necessary
measures in place to cope.

The main drivers for ethical and compliance policies remain internal. The
main driver of change remains the board of directors, followed by a desire to do
the right thing, a need to build a common corporate culture and protecting the
company’s reputation.

“Managers should focus on the implementation of an ethical culture, in which
each employee has to comply with the law and the ethical values of the company,”
said Nicolaas Sieben at Novartis International.

Although 99% of companies have either a code of conduct or a statement of a
set of values and principles, only half said that all their employees are made
to read the code. Almost a quarter (22%) of companies said that the code was
only distributed to a selected list of employees.

Michael Volz of pharmaceutical giant Merck, and a respondent to the survey
said: “The wisdom of having a set of corporate values is quickly gaining
currency as being good for business.”