By: Rusmir Pobrić
The first Business Ethics and Compliance Academy in Bosnia and Herzegovina (BECA) was recently presented at the Faculty of Economics, University of Sarajevo, organized by Net Consulting and the Embassy of the Republic of Bulgaria in BiH.
In organizations around the world, there has long been a growing need to establish clear procedures and standards, both in companies and in public institutions, in line with regulations and business needs, and professional and ethical conduct of employees. Education of the missing and existing staff is an indispensable part of an adequate response to this challenge.
Rusmir Pobrić, business development manager at Net Consulting, said in an interview that such a system creates new jobs in the real sector, which did not exist a few years ago.
Business ethics and compliance – at first sounds like a new area in the business world?
– Business Ethics and Compliance Management (ECM) is not a novelty in developed world economies. We can say that it is not a completely new area for the business sector in BiH either, but it is still poorly represented. A smaller percentage of companies in BiH, including public institutions, can be commended for introduced systems for harmonization of their business with binding regulations, building business ethics of employees, and a manager (Compliance Officer) within the organization that skillfully and effectively manages this system. The good practice of introducing the ECM system is mostly related to the branches of foreign companies in BiH, which have transferred these systems from their headquarters stationed in the countries of advanced economies. In neighboring Croatia, for example, back in 2005, the Croatian Chamber of Commerce, following EU legislation at an early stage of harmonization, adopted a code of ethical business, which was adopted by over 400 Croatian companies in just a few years. I consider it important to emphasize that for our companies and institutions, and the business environment in BiH, it is not only the fact that business ethics and business compliance is a legacy and trend of the modern world and developed economies, but also the urgent need for today’s business. Every true manager wants to do business in accordance with the legal obligations and values and standards of the company, he wants his employees to be guided by the rules known, to work professionally and ethically. All with the aim of protection from incidents and scandals, in order to maintain the acquired reputation, avoid sanctions and penalties and save the clientele, and thus the profit.
How much is ethics connected with business today, especially business in our country and in the region, which survives in a harsh business environment and difficult conditions?
– There are more and more people who advocate that modern business is inconceivable without business ethics. An increasing number of researches show that business ethics and responsibility in business are increasingly becoming the backbone of the survival of organizations. You are familiar with the scandals that have shaken the business world in previous decades, you will remember the case of Siemens or Volkswagen. We have seen that even the largest companies are not immune to non-compliance with international and domestic regulations, they are not immune to irregularities, nor penalties and losses as a consequence. Precisely cases like the ones mentioned, which resulted in multibillion-dollar damages to companies, led to the birth of the area of business ethics and compliance and the creation of a system of protection against irregularities. For example, Siemens’ loss of over two billion euros due to a corruption scandal could have been much greater and resulted in the complete collapse of the economic giant, if Siemens had not launched its own investigation and developed a new comprehensive Compliance Program and implemented it worldwide in a short period. The investigating authorities accepted that as a mitigating circumstance. Our domestic companies, regardless of whether they are bigger or smaller, have a problem with violating regulations and procedures – often out of ignorance – and unethical behavior of employees, which is why they face financial penalties, and endanger reputation and image and consequently lose clientele.
Net Consulting also launched the first Business Ethics and Compliance Academy in BiH. Why and for whom is it intended?
– Primarily, due to the lack of staff in BiH in this area, due to the timely preparation of people who can adequately respond to this need of the economy and the public sector, and are able to establish and manage ECM systems in organizations. The academy is intended for all those who want to become professionals in this field, and those few who currently hold these positions in their companies and institutions – as an opportunity to improve knowledge and further education – but also for all who are aware that this is a promising field and have predispositions and the ambition to be able to perform this demanding but challenging function.
The academy is certified and internationally recognized. It is an intensive two-month education, which offers an interactive approach to training, thus guaranteeing practical and applicable knowledge to participants. The lecturers are experienced experts in the field of business ethics and compliance management, eminent domestic and international experts, successful businessmen and managers who protect their business with business ethics and compliance systems.
What is in the job description of the Compliance Officer, i.e. manager or officer for business ethics and compliance?
– A lot of stuff. Among other things, to ensure that the business of the company or institution is conducted in accordance with binding external regulations, internal procedures, professional standards, and acceptable business practices. Then, to improve procedures by creating the conditions for the work to be done diligently, loyally, and ethically. His role is to identify and manage legal and reputational risk, to raise awareness of the risk of non-compliant business and unethical conduct, to educate and advise employees on compliance with procedures and ethical standards of the organization. Also, his task is to receive reports of irregularities, whether they come from employees, clients, or partners, and to carry out the procedure of resolving them and repairing the damage. Finally, to be able to organize and coordinate the development and implementation of ethics and compliance programs in the organization with all other actors in the process, from top management, lawyers, HR managers, internal auditors, and others. The manager of business ethics and compliance is the central figure of that system. He is organizationally positioned between the internal audit and internal control systems.
Very broad job description. How to prepare him for all of the above and realistically train him for all these tasks and roles?
– Yes, the job is responsible, it requires predispositions, strong character, high moral values, psychological stability. It is challenging but interesting and promising. Therefore, we designed the Academy’s programs in detail according to his job description. Programs begin by getting to know the structure of the organization and understanding his role and responsibilities in it, as well as practical examples of his work tasks. Participants will be able to conduct a risk assessment in the field of ethics and compliance of their company or institution, will learn the methodology of early risk detection and identification of risk points in the work of the organization, and their management. They will get acquainted with the rules and procedures in the field of ethics and compliance, how to design and implement key internal acts, how to timely monitor the application of internal control systems, etc. Attendees will have the opportunity to learn methods of detecting irregularities, all elements of the investigation of reported irregularities or perceived suspicions, and how to standardize and initiate corrective measures to resolve cases. Eventually, our new business ethics and compliance managers will be able to, in collaboration with other departments in the organization, create the entire business ethics and compliance program of the organization, implement and manage it, evaluate its performance and adequately respond to identified risks through its improvement.
How much do companies, private and public, and even state institutions in BiH currently recognize the need for business ethics and compliance?
– From the conversations we have every day with employers from the business and public sector, it is obvious that there is already a mature awareness of the need for harmonized and ethical business, that managers recognize the risk. Those who operate in developed markets know that this is an international standard. Foreign companies in BiH, I have already mentioned them, have systems or parts of the system of business ethics and compliance. We have examples of some of them obliging their employees by knowing the procedures and the code of ethics, testing them regularly, and linking that obligation to the employment contract.
This need for modern business is further illustrated by the fact that the System of Business Ethics and Compliance (ECMS) is in accordance with the ISO standard 19600: 2014.
If we want a progressive economy and efficient public administration, if we want to move forward with the developed world, it is inevitable that business ethics will come to life in BiH companies and public institutions as well.
What future do you envisage for managers, and management in general, of business ethics and compliance in BiH and the region?
– BiH is an environment where there is often skepticism towards innovations, as well as towards new disciplines and occupations. Until recently, the PR or HR manager was also viewed with suspicion, today these are positions without which successful companies would hardly be able to do business. I will give just one example, in America in 2012 there were close to 230 thousand officers for business ethics and compliance, so there is an army of employees in this field, and the US Federal Bureau of Labor Market Statistics predicts the growth of this profession by 2022 of 4.6%, or by number, 11 thousand new jobs per year. According to the preliminary results of the analysis of our company Net Consulting, and taking into account the number of large and medium-sized companies with over a hundred employees, and public institutions of a more complex structure, the current need of BiH market is over 2,500 managers or officers for business ethics and compliance.
It is only a matter of time before it becomes a standard in our country as well. By organizing the first Business Ethics and Compliance Academy, Net Consulting wants to react in a timely manner to the development of this area in BiH.
Interview published on akta.ba.