Can Ethics & Compliance Generate Revenue?

First, to navigate this puzzle, I realized how data is everything in business. On a quarter basis, we measure recurring revenue, costs, gross churn, target price, EBITDA, but more likely than not, we don’t have the appropriate tools to quantify turnovers, employee’s satisfaction, or company’s reputation. Those are the keys to understand how E&C can become a revenue stream on the long term.

Turnover tends to grow alongside the growth and increasing complexity, as many employees lose a clear vision of company’s mission and their sense of belonging as the company gets bigger. While no single solution will be able to prevent this problem, some E&C initiatives can reduce those numbers. As an example, organizations facing post-merger integration that have implemented ethical culture assessments, through in-depth interviews and focus groups, have seen more engagement and commitment from their employees than those companies that don’t conduct any assessments. Such engagement tends to reduce turnover and increase productivity [1]– both of which are directly related to increased revenues.

Additionally, the implementation of a hotline channel or a dedicated E&C committee fostering open communication within the organization is crucial for the report of unethical behaviors. Those claims can be strategically used by HR not just on disciplinary actions, but also preventing future hiring missteps. Another great benefit of having an independent channel and an E&C committee is the exchange of data and collaboration between different departments that can be used for more conversational and easily understood guides for employee behavior – which ultimately leads to a better work environment and efficiency[2].