1. CAPACITY BUILDING PROGRAMME ON BOARD INDUCTION AND EVALUATION
3RD AND 4TH MARCH 2017 By
Jackson K Maingi

2. Compliance and Ethical Code

3. Compliance Program
A compliance program is generally defined as a formal program specifying an organization's policies, procedures, and actions within a process to help prevent and detect violations of laws and regulations.

4. Essential Elements of a Compliance Program
Implementing written policies and procedures
Designating compliance officer and compliance committee
Conducting effective training and education
Developing effective lines of communication
Conducting internal monitoring and auditing
Enforcing standards through well publicized disciplinary guidelines (consistent enforcement)

5. Essential Elements of a Compliance Program
Responding promptly to detected problems and undertaking corrective action
Effective Board oversight
Risk Assessment and Management

6. Ethics
Ethics are the principles, values and beliefs that define what is right and wrong behavior.

7. Meaning of Ethics
Pertaining to or dealing with morals or the principles of morality;
Pertaining to right and wrong in conduct;
Being in accordance with the rules or standards for right conduct or practice, especially the standards of a profession;
Some synonyms: clean, conscientious, correct, decent, equitable, fair, fitting, good, high- principled, honest, honorable, humane, just, straight, respectable virtuous etc

8. Ethics and the Board The Board should:
Provide ethical leadership in the management of the organization.
Establish the core values of the organization and ensure that the values are aligned to the Constitution of Kenya and underpin sustainable practices.
Ensure that all members of the organization adhere to core values.
Ensure that corporate strategy includes measureable targets for improving ethical behavior.
Ensure that the ethical practices of the organization are effectively monitored.

9. Purpose of Ethics Ethics are the guiding principles.
Where the proposed business activity/ operation of the organization borders on the unknown, the organization needs to apply the ethics principle to decide on the project.
Ethics help make relationships mutually pleasant and productive- imbibes a sense of community among members- a sense of belongingness to society.

10. Ethical Values - EXAMPLES
- Honesty - Telling the truth; not lying - Transparency - A spirit of openness - Integrity - Being a model of trustworthiness - Trustworthiness - Fulfilling one’s responsibilities - Respect - Treating all people with dignity and fairness - Truthfulness - Consistently telling the truth - Responsibility - Doing what it takes to do the right thing

11. What is a Code of Ethics?
A Code of Ethics is a set of guidelines which are designed to set out acceptable behaviors for members of a particular group e.g the Board.
Many organizations govern themselves with a Code of Ethics
A Code of Ethics can also increase confidence in an organization by showing outsiders that members of the organization are committed to following basic ethical guidelines in the course of doing their work

12. How does a Code Serve the Board?
It is an ethical document defining what an organization means when it holds its directors to the highest ethical standards
It details the fundamental maxim-do the right thing, by defining right or wrong in some detail
It has legal standing, in that the standards articulated become concrete evidence of the organization’s expectations and intentions, with respect to the behavior of its directors
It is pragmatic it its examples and efficiencies resulting from an agreed-to-description of both organizational values and the behaviors that those values prescribe

13. How does a Code Serve the Board?
It serves the organization in times of change and uncertainty, where the law and policy may be vague, or an issue is so new that the law has not yet spoken
It brings society to the boardroom by reminding the Board to do the right thing
Society (and all of the interests it represents) also has vested interest in the actions of the Board

14. Code of Conduct
A code of conduct is a set of rules outlining the social norms and rules and responsibilities of, or proper practices for, an individual, party or organization. 

15. Why develop a Code of Conduct for directors?
The Code describes the underlying principles and values so that a director can better understand and meet the expectations and requirements of the organization, even in cases not articulated in any document
The Code creates a common vocabulary, and a sense of the ethical requirements for serving on the Board
The Code facilitates dialogue about ethical issues and goes a long way towards ensuring that well-intentioned people will not mistakenly choose the wrong path when confronting situations not adequately addressed in policy, procedure, law, regulation or by-laws

16. Creating a Code of Conduct for the Board
Typical among the values used to define the ethical standards for Boards include:
Accountability
Courage
Excellence
Honesty
Honor
Independence
Integrity
Leadership
Quality

17. Creating a Code of Conduct for the Board
Typical among the values used to define the ethical standards for Boards continued:
Responsibility
Respect
Social Responsibility
Sustainable development (a recent addition to many lists)
Trust (not a value in and of itself – more the consequence of ethical conduct)
Several of these values can be characterized as ethical values e.g honesty and fairness while others more aptly describe organizational values e.g excellence and sustainable development. Board Codes typically include both.

18. Code of Ethics & Code of Conduct-difference?
Ethics is the basis of Conduct, which is perceived through individual morality and society’s norm of what is “good or bad”, “right or wrong”.
A Code of Ethics establishes whether an activity is right or wrong
A Code of Conduct is a statement of the standards to which an individual or enterprise adheres, and the responsibilities and restrictions that are to be observed
A Code of Practice is a set of guidelines issued by a professional or service organization, to which the members agree to comply

19. Resolution
Board members and employees are expected to adhere to this Code.
The board members and employees are expected to resolve issues in a fair and respectful manner and consider informal processes such as dialogue or mediation.
In the event of an ethical dilemma or dispute, board members and management may seek advice and support from other appropriate sources such as the ethics and anti-corruption organizations in their jurisdictions.

20. Acceptance
Board members and employees must agree to the terms of the organization’s Code of Ethics and Conduct which forms part of their appointment/or contract of employment and make a commitment to abide by its provisions.
Board members and employees must indicate that they understand that any breach of the Code’s provisions will render them liable to appropriate disciplinary action.

21. Case Study
Develop a short code of ethics and conduct and explain why it is an important document in Board induction.

22. Q & A
End of Session on Capacity Building Programme on Compliance and Ethical Code