According to LRN's 2013 Ethics & Compliance Leadership Survey Report, released today, more than 80 percent of respondents see business performance and value creation as the greatest benefits of an ethical culture, surpassing compliance for the first time.

LRN's sixth annual Report shines a spotlight on what ethics & compliance (E&C) leaders from more than 180 companies across the globe identify as their biggest challenges and how they are rising to meet them.

The 2013 Report also introduces LRN's new Program Effectiveness Index (PEI), which reveals factors most highly correlated to an effective Ethics and Compliance Program.  This first-of-its-kind index defines 'effective' programs as those with the highest impact on positive employee behavior change.

Among these findings, LRN reports that size and per-capita cost of compliance programs bear little weight on overall program effectiveness. The study finds that per-capita spending on ethics and compliance programs is far less correlated to overall program effectiveness than generally thought, while the stated goals of a program carry more weight than expected. 

"Traditional approaches to ethics & compliance have had a narrow focus on avoiding losses from litigation and punitive government action," said Dov Seidman, founder and CEO, LRN. "Our survey shows the long-term economic value of building a culture animated by a mission and set of values that inspire workers to collaborate, innovate, and fully contribute their character and creativity at work day after day."

Culture Still Not an Easy Sell

While the benefits of ethical cultures may be more obvious to E&C leaders, making the internal case to management has not become any easier. Paradoxically, 40 percent of E&C leaders report that lack of appreciation of culture as a business driver is a major impediment to building a strong ethical culture, second only to organizational complexity (58 percent). Furthermore, the difficulty in making the business case for culture has increased steadily over the past three years.

LRN attributes this challenge to a potential lack of outcomes-based metrics linking E&C activities to desired business results. Only two-thirds of respondents (67 percent) have developed outcomes-based metrics.

"Those who manage E&C programs generally collect and report to the board of directors whatever is immediately measurable such as helpline calls or educational completion rates," said Wayne Brody, a senior leader at LRN. "While this can be useful to highlight specific program effectiveness issues, companies that don't go the extra step to tie these metrics to actual business outcomes are in some sense failing to extract the real value of all those E&C dollars."

2013 Critical Risks and Education

The majority of executives surveyed feel that data privacy (74 percent), conflicts of interest (70 percent), electronic data protection (68 percent), and bribery and corruption (62 percent) are 2013's top ethics and compliance risks. Interestingly, social media is also now considered a top risk by 41 percent of E&C leaders. With  year-over-year increases in importance starting in 2010, social media makes organizational and individual behaviors hyper-transparent, acting as an amplifier for many other E&C risks, including antitrust and records management.

As indicated in the survey, current education and communication approaches such as computer-based training are in alignment with common industry practices.  Computer- based training remains the steady tool of choice for E&C training, with more than 95 percent of all respondents using it to some degree, and three quarters of respondents relying on it to deliver all or most of their E&C instruction.

Program Effectiveness Index scores of programs taking blended approaches— incorporating multiple learning modalities—are considerably higher than those that do not. The PEI scores of the 14 percent of programs delivering ethics and compliance messaging to employees' mobile devices are higher still.

To access the full report or to learn about LRN's Program Effectiveness Index, visit www.lrn.com/