Despite the ever-growing network of compliance controls established since the late 1990s, there have been a great number of prosecutions and scandals involving pharmaceutical companies. While \u2018pharma greed\u2019 has been part of the problem, a larger culprit is the pressure to meet or beat targets derived from shareholder expectations. Over time, this builds and can be felt by the entire organization until it seeps into the organizational culture and manifests itself in unwanted ways. This \u2018target pressure\u2019 isn\u2019t necessarily anyone\u2019s fault but is a byproduct of the interdependency between innovation and the financial markets in which such innovation operates. This pressure isn\u2019t unique to pharma sales, existing as it does throughout the corporate world.<\/p>\n
What, then, have companies done to avoid the costly fines, reputational damage, and potential individual liability that comes with violations of law and policy? They\u2019ve built increasingly complex compliance programs replete with controls applying to <\/em>all of their highest-risk activities. On one hand, this has helped decrease violations in most activities subject to controls. On the other hand, scandals and prosecutions have continued because the target pressure circling within companies has not gone away, resulting in new and innovative activities not yet subject to controls. This has led to the recognition that controls, on their own, are insufficient to prevent violations, and that there must be an equal if not greater focus on creating, embedding, and fostering a culture<\/em> of business integrity and ethics.<\/p>\n Culture is what employees feel, see, and experience around them every day at work. When pressures mount and employees face decisions regarding which actions to take, they are more likely to base their decisions on the cultural cues around them rather than the words in a code of conduct or policy. They will model their behavior on what people around and above them actually <\/em>do, think, and say, and they will easily distinguish between what has been said out of political correctness and what is real. They mimic these behaviors and actions to replicate the perceived successes of their colleagues. How then to build a true culture of business integrity and ethics?<\/p>\n It has long been said that tone-at-the-top and tone-in-the-middle are important, but unless these elements are embedded within, and supported by, a larger program, they will be sporadically heard and inconsistently felt across the organization and ultimately suboptimal. The key, we believe, is to build business ethics into every aspect of talent and performance management, from hiring and onboarding, to ongoing business reviews, compensation, promotions, and succession planning. This is where the Compliance and Risk teams can multiply their impact and effectiveness by partnering closely with Human Resources. Here are a few illustrative examples.<\/p>\n Hiring<\/u>: Whom you hire is critical to culture because even a single person with the wrong mindset toward business ethics, in a senior-level or other critical role, can cause a group, department, or even a whole company to devalue or ignore business ethics. Compliance\/Risk can partner with HR to identify the leadership and high-risk roles for which Compliance\/Risk should always be a mandatory interviewer to assess mindset before a candidate is hired. These critical roles can then be documented in a joint procedure whereby HR always ensures that Compliance\/Risk has a seat at the interview table.<\/p>\n Mid and Year-End Reviews, Compensation, Promotions, and Successions<\/u>: One of the difficulties companies have had when trying to link business ethics to bonus is how to measure the \u2018ethical performance\u2019 of their employees. Typical metrics used are things like on-time completion of legal training and successful audits covering the employee\u2019s area of responsibility. But companies can enhance their measurement capabilities if Compliance\/Risk partners with HR to: (i) define leadership behaviors<\/em> that, if performed visibly and consistently throughout the year, foster and sustain a culture of business ethics (\u201cIntegrity Leadership Behaviors\u201d), (ii) train the workforce on those Integrity Leadership Behaviors and how they will be assessed during mid and year-end reviews, and (iii) link rewards and incentives like bonus, promotions, and successions to the quality, visibility, and consistency of such Integrity Leadership Behaviors. When employees understand that their ability to succeed and thrive is directly tied to business integrity and ethics, the results are clear.<\/p>\n <\/p>\n Patrik Florencio is an Advisory Board Member to Temple\u2019s Center for Compliance and Ethics and is the Chief Compliance & Risk Officer at Amicus Therapeutics; David Clark is the Chief People Officer at Amicus Therapeutics.<\/em><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Patrik Florencio & David Clark discuss the critical role of performance management in building a culture of integrity and ethics.<\/p>\n","protected":false},"author":33,"featured_media":2798,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[13,52,22,8],"tags":[80,517,427,106,316,740,2526,393,2527,2528,2529,2530,433,2531],"coauthors":[2524,2525],"class_list":["post-3432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-law-practice","category-compliance","category-corporate-responsibility","category-faculty-authored","tag-business-law","tag-business-succession","tag-compensation","tag-compliance","tag-corporations","tag-culture","tag-hiring","tag-pharmaceuticals","tag-pressure","tag-promotion","tag-prosecutions","tag-scandals","tag-shareholders","tag-targets","masonry-post","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"yoast_head":"\n