How to Prevent Legal Action

Most companies of a certain size have drawn up their mission and value statements. Their corporate documents also often include a Company Code of Conduct. Such items are often included in packets handed out to new hires. But, as a leader, can you be sure that all your managers are conversant with these documents and apply them without fail?

The only way you can ensure compliance and show your good faith attitude in the face of potential legal action against the company is to provide ethics training that is provably effective.

Regarding financial rulings subsequent to Sarbanes-Oxley, here is what should be included:

1. The proper legal response when employees report possible criminal behavior
   
   
2. Proper control and retention of corporate documents
   
   
3. The definition of conflict of interest
   
   
4. What constitutes insider trading
   
   
5. Appropriate behavior around gifts and entertainment
   
   
6. Illegal anti-competitive practices

And for those managers who are involved in international business, compliance training should also include an understanding of import/export regulations, boycott restrictions and foreign corrupt practices.

At the end of the day, the cost of training is minor compared to the cost of legal action.