The Effectiveness of Ethics Programs: The Role of Scope, Composition and Sequence

56 Pages Posted: 9 Jul 2014

See all articles by Muel Kaptein

Muel Kaptein

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Date Written: July 9, 2014

Abstract

Organizations are faced with the question, not only whether to adopt an ethics program, but also which components to adopt when. This study shows that unethical behavior occurs less frequently in organizations that have an ethics program than in organizations that do not have an ethics program. Nine components of ethics programs were identified and examined. The results show that there is a direct relationship between the number of components adopted and the frequency of observed unethical behavior. No relationship was found between pre-employment screening and unethical behavior, while the strongest relationship was discerned between accountability policies and unethical behavior. The study further reveals that the best sequence for adopting components of an ethics program is (1) a code of ethics, (2) ethics training and communication, (3) accountability policies, (4) monitoring and auditing, and (5) investigation and correction policies – all of which are directly related to less unethical behavior – followed by (6) an ethics office(r), (7) ethics report line, and (8) incentive policies – all of which are indirectly related to less unethical behavior. With the exception of pre-employment screening, this sequence corresponds closely to the pattern of adoption of organizations in the U.S.

Keywords: ethics, compliance, program, ethics program, compliance program, unethical behavior, code, officer, hotline, screening, monitoring, training, audit

JEL Classification: M14

Suggested Citation

Kaptein, Muel, The Effectiveness of Ethics Programs: The Role of Scope, Composition and Sequence (July 9, 2014). Available at SSRN: https://ssrn.com/abstract=2464004 or http://dx.doi.org/10.2139/ssrn.2464004

Muel Kaptein (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

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