Part 2: Monitoring organisational integrity

Monitoring organisational integrity helps public organisations maintain high standards and continue to build and retain public trust. The public has more confidence in a public organisation when they see that it consistently upholds high ethical standards.

Organisational integrity is not just about complying with rules – it is about aligning every action with your organisation’s purpose and values. You can find more information on how an organisation’s purpose and values are foundational to its integrity practices in Part 3 of Putting integrity at the heart of how public organisations operate.

Monitoring organisational integrity can:

• help organisations identify potential risks early and take appropriate action to mitigate them – taking a proactive approach to risk mitigation can prevent small issues from becoming significant problems;³
• support a more ethical organisational culture and encourage ongoing conversations about ethical standards and behaviours, which can help to foster an environment where integrity is valued and upheld; support organisational learning and continuous improvement by providing valuable data and insights that can be used to enhance policies, procedures, and practices, which can help the organisation adapt to new challenges; and
• improve transparency through regular reporting and feedback mechanisms – the data gathered from monitoring organisational integrity can inform decision-making processes, helping to make sure that decisions are aligned with organisational values.

It is important to recognise that the process of monitoring organisational integrity can significantly affect an organisation’s culture. The methods used, the areas of focus, and the way results are communicated can all influence how employees perceive and engage with the organisation’s approach to ethical conduct.

Laying the groundwork for effective monitoring

Monitoring organisational integrity is not a standalone activity – it is the next logical step after an organisation has carefully considered its integrity risks and prepared a comprehensive integrity strategy.

Implementing an integrity framework is a good place to start if your organisation is getting started assessing its integrity. It can help with the important foundational steps needed before starting to monitor organisational integrity.

These steps include:

• identifying your organisation’s integrity risks; and
• developing an integrity strategy.

Identifying your organisation’s integrity risks

Integrity risks can take many shapes and forms, ranging from overt issues like fraud and bribery to more insidious behaviours like failing to follow up on commitments, disregarding organisational values, or excluding diverse perspectives. While overt issues are more likely to grab headlines, the more insidious behaviours are often more common and, over time, can corrode organisational culture and public trust.

Integrity risks can start small – as behaviours or decisions that might not seem significant at first. Left unchecked, however, they can escalate into larger problems that are harder to resolve. For example, an organisation that routinely overlooks minor breaches of its code of conduct might create an environment where more severe violations are tolerated.

Thinking about and documenting the integrity risks your organisation faces is an important step. This requires a close look at both internal and external factors:

• Internal risks (for example, bullying, harassment, non-compliance with policies, or failure to act in alignment with organisational values).
• External risks (for example, receiving gifts and hospitality, or inappropriate supplier relationships).

Developing an integrity strategy

When your organisation’s integrity risks have been identified, the next step is to develop a strategy for managing them.

An integrity strategy is a structured approach that guides an organisation’s efforts to uphold ethical practices and maintain trust. It is a comprehensive plan that outlines an organisation’s identified integrity risks and establishes processes to mitigate and respond to those risks in a consistent way.

An integrity strategy is a key part of creating an environment where people understand the importance of integrity and feel confident that the organisation values ethical decision-making and actions. It helps provide the tools and support necessary to ensure that integrity is not just a concept, but a practical and visible part of everyday operations.

An effective integrity strategy is the foundation of an integrity monitoring programme. It helps ensure that your organisation has the structures, processes, and cultural alignment needed to monitor integrity effectively.

“We have an internal audit programme that we use to detect integrity issues. It is not often that an integrity matter arises, but a fraud issue was recently detected during one of our audits. This was a good example of our internal audit programme in action. This detection allowed us to respond quickly and put measures in place that gave us greater oversight of the processes involved. It also prompted us to strengthen our process for pre-employment checks.”

Local authority integrity specialist

Understanding integrity indicators

By using integrity indicators to monitor changes to your organisational integrity over time, you can begin to understand your organisation’s ethical standing and track its progress.

Integrity indicators can include a mix of numerical data, narrative insights, and qualitative observations. By examining a range of integrity indicators, you can better understand changes in your organisational integrity and make informed decisions to improve ethical standards.

You can read more about integrity indicators in Part 2 of Putting integrity at the heart of how public organisations operate.

Balancing approaches for effective integrity monitoring

To effectively monitor and maintain organisational integrity, it is important to balance compliance activities with an active approach to encouraging ethical behaviour. A well-balanced approach can enhance your integrity monitoring by making sure that neither approach is overly dominant.

Compliance activities are the processes, policies, and mechanisms used to make sure that people comply with an organisation’s legal requirements and internal rules. These can be effective for managing unethical behaviour. For example, conflict of interest policies requiring regular declarations can help identify and address potential issues before they escalate. However, relying too heavily on compliance activities can lead to a narrow focus on rule-following, potentially overlooking the broader ethical considerations that should guide decision-making.

An active approach to encouraging ethical behaviour involves embedding integrity into everything your organisation does — from the day-to-day decisionmaking and behaviour of staff to its systems and practices. For example, integrating ethical considerations into procurement processes can help ensure that procurement decisions align with organisational values and foster trust with stakeholders. An active approach to integrity encourages people to consider the ethical implications of their actions and supports alignment between behaviours and your organisation’s purpose and values.

You can read more about how compliance activities fit into a broader integrity approach in Part 2 of Putting integrity at the heart of how public organisations operate.

Monitoring integrity plays a key role in assessing whether your organisation has struck the right balance between these approaches. It can provide insights into what drives people to behave in certain ways and can help you to refine strategies to embed integrity practices in your organisation.

“In our organisation, we integrate hard measures of organisational integrity with an understanding of our organisational culture. We use the Committee of Sponsoring Organisations (COSO) Framework to carry out an annual assessment of our internal controls.44 This includes components that relate to ethical leadership. Outcomes from our COSO Framework analysis are helpful because they provide a tangible idea of how effective our integrity measures are.

“We also run engagement surveys to explore how employees feel about being listened to, how they feel they are contributing to our strategic direction, and their thoughts on leadership behaviour. We encourage regular conversations about performance agreements and alignment with organisational values throughout the year, rather than just once per year.”

Local authority integrity specialist

3: See Australian Public Service Commission (2022), Integrity Metrics Resource, at apsc.gov.au.

4: The COSO Framework is a system used to establish internal controls to be integrated into business processes. Collectively, these controls provide reasonable assurance that the organisation is operating ethically, transparently, and in keeping with established industry standards.