Written by Guillermo Iribarren on Thursday July 28, 2016
A high percentage of Switzerland's surface is covered by the Alps. The melting of glaciers, located at the top of the mountains, generates flows of clean – and essential - water for a wide range of ecosystems downstream. This natural geological phenomenon helps us to illustrate the importance of the commitment from the Board of Directors and Senior Management to implement compliance across all hierarchical levels in Swiss companies.
Switzerland is one of the least corrupt countries in the world: it ranked 7th among 186 countries with a score of 86 out of 100 in the Corruption Perception Index 2015 of Transparency International. The country also gets high scores, corresponding to better governance outcomes, in indicators such as the Corruption Control Index -reflecting perceptions of the extent to which public power is exercised for private gain-, and the Bribe Payers Index -ranking the likelihood of firms to bribe abroad .
On the other hand, the alpine country ranks first in the Financial Secrecy Index as the most opaque financial jurisdiction in the world . In recent years, the public has been concerned about corruption in business and the private sector. For instance, a popular initiative approved in a 2013 Swiss referendum increased control over boards’ remuneration and introduced new rules on corporate governance (Ordinance against Excessive Remuneration in Listed Companies Limited by Shares ).
In September 2014, the Swiss Business Federation (economiesuisse) updated the Fundamentals of Effective Compliance Management , a comprehensive guide to compliance and ethics for Swiss companies. This paper supplements another guideline issued by economiesuisse: The Swiss Code of Best Practice for Corporate Governance , updated in early 2016.
Swiss commitment to compliance at the top of organisations
What does compliance mean in Switzerland? It means “ensuring the observance of applicable legislation as well as commitment to self-regulatory standards (code of conduct, company directives, association codes, etc.). Private and public stakeholders expect every company to do business in accordance with the applicable standards. Seen from this perspective, compliance can also be defined as the state of integrity expected by the stakeholders on the basis of the social responsibility of the companies. Nowadays, the term “compliance” therefore typically involves a strong commitment to acting with integrity (“do the right thing”).” 
The top commitment to compliance and integrity in the Swiss business framework is clear. Both the Board of Directors and Senior Management have well-defined duties. Indeed, the Swiss Code of Best Practice for Corporate Governance established the following compliance duties and recommendations for the Board of Directors :
Likewise, an active Senior Management commitment to compliance, and therefore to acting with integrity, is one of the five elements of an effective compliance management system in Switzerland. This active top management commitment includes :
In summary, compliance and integrity are key components of day-to-day performance at the highest levels of organisations. These elements should be incorporated into the business strategy and operations. Also, stakeholders expect a maximum effort from the top level of companies to embed compliance and integrity into the corporate culture.
How to implement this top level commitment to compliance
There is increasing awareness in the market about how a culture of integrity and compliance improves both business performance and the confidence of investors. There is also research demonstrating that ethical companies are more profitable . We also learn more and more about the benefits of stakeholders’ engagement.
However, we continue to see integrity scandals in the media. We see corporate reputations destroyed and billions in shareholder value lost. Furthermore, we see how citizens around the world have lost confidence in business and the private sector, meaning the free market.
We believe that changing business culture does not need to take an eternity. If top level commitment is present, then the compliance function can develop metrics to track progress as well as the organisation´s return on investment (ROI). Organisations also need to leverage the synergies between the compliance and HR functions. From this perspective, we see the implementation of top level commitment as a matter of transformation and corporate culture.
First, we should recognise that organizational change is a complex process. However, consistent research has revealed some key factors that are always present in successful transformation processes :
Second, corporate culture is about people and behaviours. For example, In July 2016, the Chartered Institute of Personnel Development (CIPD) of the United Kingdom issued a comprehensive research report on managing corporate culture .
This report included the following top-level recommendations for leaders with regards to understanding, measuring and developing corporate culture:
In summary, the Board of Directors and Senior Management have to implement a transformation process aimed at changing organisational culture as a part of the social responsibility of the company. The outcome of this cultural change has to be more integrity and compliance in business strategy and operations, more efficiency, and more profitability. As the melting process at the top of the Alps illustrates, a renewed clean - and essential - culture will flow throughout your organisation.
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 See Does Business Ethics Pay? http://www.ibe.org.uk/userfiles/doesbusethicpaysumm.pdf
 See The four building blocks of change http://www.mckinsey.com/business-functions/organization/our-insights/the-four-building-blocks--of-change
 See A duty to care? Evidence of the importance of organisational culture to effective governance and leadership http://www.cipd.co.uk/hr-resources/research/duty-care-evidence-organisational-culture.aspx
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