Unethical employee behavior costs companies millions of dollars each year. While you might not be able to eliminate this risk entirely, you can significantly reduce it by proactively building a strong foundation of ethics that influences your workplace culture. This involves open communication and making sure that your leadership staff is setting a good example.

The most effective companies are those that have a strong foundation of ethics, but having a piece of paper with your company’s code of conduct written down is not enough. You need to make sure that this code seeps into your company’s culture. More often than not, this document is reviewed—and maybe signed—during the initial onboarding process, and then never seen or mentioned again.

It is essential that you have an ethical workplace culture for many reasons. First of all, you can prevent non-compliant or unethical behavior from taking place. This is something that cost businesses millions of dollars each year and is the underlying reason why so many businesses fail. If you truly want to facilitate and promote ethical behavior in your company, you need to have yearly ethics training and role models from the top-down.

You might hear the term “ethics training” and roll your eyes. For many companies, this is more of a hassle than anything else, and does not actually provide employees with any real or useful information. Many companies just require their employees to read about a few different scenarios, answer a couple questions about what is “right and wrong,” and sign a contract promising to act in ethical ways.

But for ethics training to truly be effective, it needs to start from a place of understanding the specific resources, skills, and support your individual company uses and requires. It should include one-on-one interactions, so that you can ensure that every member of your team understands their personal performance targets. It is also important that managers understand the time and resources that are needed for team members to be able to reach those goals.

Having regular, engaged discussions will not only improve your company’s foundation of ethics, but will also help build a stronger and a more united team, increase productivity, and help foster collaboration and creativity. Think of these meetings as an opportunity for you to keep a pulse on your team’s dynamics and check in on how your staff is evolving their skills and interests. Doing so will allow you to allocate tasks and staff projects so that you make the most of each person’s unique abilities.

The most important thing to remember is that your employees will mirror the feelings and actions that they see happening elsewhere in the company. This means that the leadership you have in place needs to act as role models for their team—and the entire company. Managers should be required to keep open lines of communication with their staff, and encourage them to speak up regarding any issue or problem.