June 1 , 2002
Business & Money
the spirit of the law into everything they do. "It's not enough to develop an ethics program or a set of written policies," says Samuel J. (Sandy) Winer, a partner with Foley & Lardner in Washington, D.C., and former staff attorney and special counsel with the SEC's enforcement division. "You have to make sure it becomes part of the company's culture. That requires training and having a staff of people responsible for making sure personnel are aligned with the changed culture."
These efforts are not just necessary evils, however. Approached correctly, Sarbanes-Oxley compliance can yield real business benefits.
For example, legal experts note that a diligent training and monitoring program can help a company defend itself in future legal challenges. And some companies see these compliance systems as tools for prevention, investigation, and prosecution of fraud cases. "The ability to see an employee's signature on a code of conduct and a training record can help our ability to prosecute discipline cases," says Brian Wenning, ethics and compliance director with TXU Business Services.
Furthermore, many companies are finding strategic benefits in the compliance process. "Sarbanes-Oxley is an opportunity to improve the business model," says Laura Brooks, chief risk officer at Public Service Enterprise Group in Newark, N.J. "Let's not make this a compliance exercise, but an opportunity to demonstrate that good internal controls can improve the transactional decision-making process and enhance the bottom line."
Integrating new governance standards into a large and diverse organization requires a significant commitment of talent and resources. Many companies, for example, have established special committees to implement the new standards.
At DTE Energy, this responsibility falls to the company's compliance office-which, while it existed before Sarbanes-Oxley, redoubled its efforts in the wake of governance scandals at Enron and other companies. Specifically, DTE began assessing its compliance programs more frequently, and it instituted processes for analyzing compliance risks and identifying areas needing further attention.
"The climate was changing so rapidly it forced us to think of new ways to enhance employee education and awareness," says Jeannie Zimbalatti, a compliance expert in DTE Energy's compliance office. "We needed a program that dealt with the complex topics of compliance and ethics issues, but that would also be both informative and entertaining to every employee across the board."
With 14,000 employees, the company also needed a program that could be delivered cost-effectively and conveniently to a large organization. These requirements led DTE to a six-month search for third-party vendors of ethics-training systems. The company finally settled on a Web-based program from Integrity Interactive Corp. of Waltham, Mass. In addition to satisfying the company's basic requirements, the system offered flexibility in terms of content.
"You always have logistic issues, but we found that with a Web-based program, it could be modified to keep up with changes in the law and could be tailored to address our internal culture," Zimbalatti says.
And more importantly, Web delivery makes training cost-effective in a way that face-to-face programs cannot. Indeed, training the workforce of a large company on ethics issues might have been virtually impossible