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Weekly UpdatesAT A TIME WHEN THE OBAMA ADMINISTRATION, GOVernment leaders, and the public are calling for reforms in executive compensation and employee bonuses, it appears that there is relatively little connection between ethical business behavior and corporate compensation, according to a recent survey by the Health Care Compliance Association and the Society of Corporate Compliance and Ethics (SCCE). "Only a minority of companies have made ethics and compliance a process for determining how employees are compensated, and only about one company in six ties employee bonuses and incentives to ethical performance," SCCE CEO Roy Snell says.
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The Compensation, Performance, Compliance, and Ethics survey reveals that when it comes to compliance and ethics metrics, organizations have done very little to encourage ethical behavior. Some other findings include:
* Thirty-four percent of respondents say ethics and compliance greatly impact the compensation process for executives. Most indicate that compliance plays no (29 percent) or very little (27 percent) role. The numbers for nonexecutive employees are similar.
* Eighteen percent of respondents do not know if compliance and ethics metrics are used for executive performance evaluations. Among those who did answer, 43 percent report that compliance and ethics are included, and 57 percent report they are not included. It is close to a 50/50 split for performance evaluations for nonexecutive employees.
* Seventy-six percent of companies report that compliance and ethics are not significant factors in the highly sensitive area of bonuses. Only 15 percent indicate that compliance and ethics have a significant impact on bonus or incentive compensation awards.
"The net result is that there is more work to be done in aligning business practices with stated commitment to compliant, ethical behavior," Snell says. To view the survey results, visit www.corporatecompliance.org.
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