Business integrity is challenged by stakeholder expectations, regulatory changes and disruption: Organizations need to take responsibility for their actions through responsible and ethical business conduct. The upcoming Human Rights Due Diligence Directive, which comes into force in Norway on 1st July 2022, will further increase this responsibility. The European Commission adopted a proposal for an EU-wide Directive on 23rd February 2022.
A sustainable world is an equal world where companies take responsibility not only for their employees and shareholders, but also external stakeholders such as suppliers and customers, the environment and society at large. Companies failing to manage their environmental, social and governance risks are likely to face penalties and public mistrust. By understanding the risks and challenges while focusing on the opportunities the green shift creates for companies willing to invest in business integrity. As a background to these new opportunities, risks, and challenges, we have classified key drivers for needs of management, workforce, and operations of companies.
Regulatory breaches and lack of integrity extends beyond reputational risk. Fines, sanctions, and recovery costs may have material financial impact.
The pandemic has caused supply chain shortcomings and disruption, clearly demonstrating the importance of third-party and supplier risk management.
Companies prioritizing profit over integrity should be prepared for more public scrutiny. Integrity drives trust and respect which has a positive effect on overall business performance.
By reviewing and updating your corporate compliance Framework and evaluating existing tools and processes related to regulatory risk management
By conducting supplier and business partner risk assessment, supply chain management, IT/cyber security, data privacy
By reviewing, revise or create corporate governance policies, business code of conduct, supplier code of conduct, dilemma/red flag training, whistleblowing policy
The risk of employee misconduct and non-compliance can be mitigated through business-wide and role-related guidelines, education, and training.
The processes of qualifying, onboarding, and monitoring suppliers, partners and employees are dependent on readily available business intelligence and system support.
Employees, suppliers, and customers may turn elsewhere should top management fail to deliver on its integrity commitment.
By reviewing, revise or create governance framework and policies, conducting employee and supplier education, training and awareness
By evaluating existing tools & processes related to business intelligence and by performing focused risk assessments, process mapping, guidelines and trainings
By performing tone at the top assessment/gap analysis ("greenwashing review") and by providing outsourced or co-sourced internal audit support in designing and executing audit plans to examine and report on areas of risk
Failure to comply with new regulation and manage stakeholder expectations poses a reputational and financial risk.
Risk monitoring is a continuous and recurring process that should be integrated in the overall risk framework to ensure compliance.
Managers, employees and suppliers need to adhere to ethical conduct standards and be willing to undergo testing to detect possible non-compliance.
By supporting in developing and implementing a robust governance structure, policies, education, and training
By creating, evaluating and/or conducting IDD/EDD routines, ABAC reviews, AML, audit templates, audit/reviews, KYC controls and BI dashboards
By evaluating and/or developing templates, guidelines, compliance sample testing, reporting channel (whistleblowing) and training
