The era of energy drinks is over, according to 2021 food trend predictions. In its place? Beverages that promote sleep and calm. Consumers will also be turning to products that support social causes and are friendlier to the earth. And food delivery and restaurant take-out will become more streamlined through technology.
For those of us in the ethics and compliance space, 2021 will share a few similarities with trends we’ll be experiencing as consumers. We’ll continue to deal with carry-overs from 2020, put a greater focus on issues that impact our employees and communities, and look for ways to innovate.
Here are five trends we’ll be keeping an eye on in 2021:
ESG with extra S and G – and a key role for E&C:
Environmental, social and governance (ESG) issues are at the top of the agendas of investors, and for good reason. ESG Funds have been shown to outperform. This past year, ESG took on further momentum with a focus on social issues, most notably equity and social justice. Organizations have stepped up: from Softbank launching a $100 million Opportunity Fund for Minority-Owned Start-Ups to MetroHealth setting goals for racial equality and inclusion.
At Ethisphere, we launched the Equity and Social Justice Initiative, a platform to showcase leading practices and provide practical advice for companies looking to be part of the change. We are hosting an ongoing Forum in which senior ethics, compliance and legal leaders share their personal experiences and also ways that their companies are addressing equity, and the role they’re playing in advancing that dialogue.
In the year ahead, we will continue to see companies putting ESG principles into practice, harmonizing ESG efforts with sustainability initiatives into a cohesive narrative. Ethics and compliance can expect to be more involved and leverage lessons learned around metrics, governance, and stakeholder engagement. As leaders who typically work across an organization, E&C will be further called upon to connect the dots with cross-functional teams to align ESG with business strategy. For example, in an Ethisphere Magazine article, Western Union’s Chief Ethics Officer Nancy Reynolds shares how she is “working on how best to integrate our Enterprise Risk Management (ERM) program with our ESG reporting and strategy.”
In terms of diversity and inclusion, look forward to seeing more:
- Storytelling and showcasing the power of people sharing experiences. Learn how Voya, MetroHealth and Mayo Clinic have elevated diverse voices in examples on our Equity Initiative page.
- Transparency, with companies increasingly measuring and sharing data on diversity, pay and other topics. In our Equity Forum, AT&T’s David Huntley and Angela Santone talk about the company’s commitment to transparency, as indicated in the company’s 2019 Diversity and Inclusion Report which shares workforce demographics, diversity spend, and other insights.
- Manager training to address tone in the middle and equip managers to be better prepared in hiring and managing evolving environments.
Ethical culture and employee wellbeing:
Ethical culture has always been important and was even more so in 2020, with remote working and disruption putting a strain on controls, training and in-person management. Employees have also been stretched on the home front. As a result, ethics and compliance teams have had to regroup and step in to address a full range of new concerns.
One of those concerns is “psychological safety,” and its importance to a speak-up culture. At U.S. Bank, Global Chief Ethics Officer Katie Lawler launched a program to train managers throughout U.S. Bank on how to create psychologically safe environments for employees to speak their minds. We expect to see more focus in the year ahead on mental health and other wellbeing programs.
On a related note, the behavioral ethics/science influence on culture, ethics and compliance is a topic that is gaining momentum. In Ethisphere’s recent London Ethics Forum, EY and GSK presented a scientific framework for a human-centered compliance approach. In practice, this means moving from an ethos of policing to prevention; from prioritizing based on hypotheses about actions to an analysis of actual behaviors; to making it easier and more rewarding to do the right thing.
Companies will also continue to conduct ethical culture surveys to identify risk areas and know how to prioritize training and other E&C activities. The coming year will also feature more virtual training and communications that are short, focused on key messages, and easy to access. We know from our own culture survey dataset of over 1 million employee responses that managers will continue to play a key role in supporting effective messaging.
Data analytics and digital innovation:
With compliance, investigations, and audit teams still working remotely, and with the uncertainty of when in-person compliance reviews and audits will resume, data analytics technology that continuously and remotely monitors 100% of spend for fraud, corruption, sanctions violations and conflicts of interest will be a priority for ethics and compliance professionals in 2021. Companies will continue to evaluate how data analytics technology can drive more efficient and more effective compliance reviews, investigations, and risk assessments.
As companies continue to see anti-corruption enforcement activity in 2021, we anticipate an increased interest among ethics and compliance professionals to shift away from a reliance on traditional, subjective compliance data to measure program effectiveness towards larger and more objective datasets, such as invoice and expense system data, to derive risk insights. Companies with complex or multiple data systems are likely to focus on their highest-risk markets or activities as a starting point using data analytics technology that is both easy to implement and scalable.
Additionally, companies will continue to use digital tools. Ethisphere’s Business Ethics Leadership Alliance (BELA) pulled together a working group and report on Digital Innovation, where leading companies shared how they are using artificial intelligence, bots, augmented reality and other tools, along with implementing dashboards, blockchain, and other methods to streamline and enhance compliance efforts. These efforts will expand.
Remote and hybrid working:
During the initial months of the pandemic, companies had to focus on business continuity, and many relaxed data protection policies to help employees quickly and efficiently shift to remote work. 2020 also saw an enormous increase in ransomware attacks as hackers took advantage of the disruption.
In 2021, it is time to make sure your data protection policies are updated for the hybrid remote/office workplace. Most important will be to build a culture of cybersecurity and data protection by helping your employees develop good habits regardless of where they are working. For practical tips on creating practical policies and creating a culture check out free resources provided by the Cyber Readiness Institute in association with Ethisphere.
Integrity and the continued influence of E&C:
As with ESG, business integrity and its importance to the bottom line will be a continued trend. EY’s Global Integrity Report highlighted that 90% of businesses surveyed at the height of the pandemic believe COVID-19 poses a risk to ethical conduct. In the year ahead, ethics and compliance leadership will continue to rise in importance as companies seek to reduce the risks and ramifications of misconduct and navigate a new era of working.
At Ethisphere, we have long recognized the link between business integrity and long-term performance; and advanced the belief that companies can take the lead and make a difference. The disruptions of 2020 have exposed so much. Organizations are stepping up and turning to their ethics, compliance, and legal leaders to define a new path that is innovative, inclusive, caring, and transparent. We look forward to joining you on the journey.
About the Author:
Erica Salmon Byrne is the Executive Vice President for Ethisphere, where she has responsibility for the organization’s data and services business and works with Ethisphere’s community of clients to assess ethics and compliance programs and promote best practices across industries. Ms. Salmon Byrne also serves as the Chair of the Business Ethics Leadership Alliance; she works with the BELA community to advance the dialogue around ethics and governance, and deliver practical guidance to ethics and compliance practitioners around the globe.