Chief Ethics and Compliance Officer Case Study
I n the ethics and com- pliance profession, some companies use the title, “Chief Ethics and Compliance Of-
ficer,” others use “Chief Ethics Officer” while others choose “Chief Compliance Oflicer.” The terms “ethics” and “com- pliance” are often used sjoion- yinously; as a result, drawing a distinction between the two concepts may seem unimport- ant. In fact, the difference between the two can be very important for your training, communications and overall culture. Indeed, the conscious choices that companies make about these concepts often define their business.
Ethics and compliance are es- sentially difl̂ erent sides of the same coin. Compliance is following the law, while ethics is doing what is right regardless of what the law says. Compliance is something that the government requires you to do. Ethics, on the other hand, is some- thing you choose to consider when acting.
As an example, vari- ous countries have environmental laws that require products to be labeled in a certain way and may include font requirements, place- ment rules, etc. Eailing to properly label a product or follow some other technical regulation is not unethical or immoral, but it is noncompliant, meaning that the company may face fines, liability or other government action. By contrast, a government may not dictate whether a company makes its products more environ- mentally safe or easier to recycle, but doing so may be the ethical thing to do.
If your policies and training place great emphasis on high-level values of right and wrong, you may not be properly pushing a culture of compliance. Of course, too much focus on legal standards without strong ethics messaging may inhibit the kind of values-based culture that makes employees proud and companies great. It is important to think about and convey the impor- tance of both ethical considerations and compliance.
The distinction between ethics and compliance becomes even more interesting when you are dealing with a compliance issue that has an ethical component. The most obvi- ous example is corruption. Besides being prohibited by the Foreign Corrupt Practices Act(ECPA), U.K. Anti-Bribery Act and scores of other local laws (and thus a compliance issue), most people would agree that corruption is wrong and has an ethical component. But even with a seemingly obvious ethics is-
Ifyqur policies and training place great emphasis on high- level values of right and wrong, you may not be properly pushing a culture of compliance.
sue, using a “do the right thing” message to drive your anti-cor- ruption program may not be the right move in every circum- stance.
Eor example, you likely have a policy that prohibits employ- ees ft’om giving cash, lavish gifts or favors to public sector employees. The policy is part of your anti-corruption pro- gram, and messages about right and vwong, values and moral- ity, should be the most effective way to motivate employees to follow the policy. After all, ev- eryone knows bribery is wrong. But actually, such a message may lack credibility with many
of your employees who live in cul- tures where lavish gifts are expected or cash gifts on certain occasions are appropriate. It may actually feel wrong to them to refrain ftom giving an expensive gift as part of a business relationship. Similarly, employees sometimes rationalize their actions as right because they believe the ends justify the means. Isn’t it better to give a lavish gift and help the company get business than to let the work go to a competi- tor? What is really “right” here? For these employees, the more eflective message may be about compliance with the FCPA and similar laws, emphasizing the potential liability, brand impact and business risks of non-compliance.
The best programs will recog- nize the difference between ethics and compliance and drive both as integral components of company culture and successful performance. In the end, companies that follow the law and prioritize ethics have a competitive advantage.
February 2014 • INSIDE COUNSEL 23
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Part 1 Ethics versus compliance
Before beginning your discussion, read the article Ethics vs. compliance: Do we really need to talk about both? (Links to an external site.) Organizations often use the terms ethics and compliance interchangeably. However, there are some nuances that are different between compliance and ethics. After reading the article, compare and contrast the similarities and differences between compliance and ethics. Evaluate whether a compliance officer or an ethics officer would be a better fit in your current organization (or in an organization with which you are familiar).
Part 2 Ethics, Compliance, and Training
Read chapter four in the textbook and Ethics, reputation, and compliance gain as corporate priorities (Links to an external site.). In the article, Hagel (2015) stated
The demand for greater transparency from consumers and stakeholders across the world has pushed the areas of ethics and compliance up the corporate list of priorities in recent years. In addition, the risk to reputation and potential damage that can be done if evidence of unethical practice is discovered have increased significantly with the advent of social media. (para. 2)
Based on the importance of transparency, your organization (you can represent any organization, McDonalds, Starbucks, ESPN, etc.) has asked you to create a training presentation on ethics and compliance to be presented next week. Referencing the Hagel article, the Gonzales-Padron textbook, and at least two other journal articles, present an outline for your training as a response to this thread.
- Create an outline describing the information that you would include in your training presentation.
· Must document all sources in APA style as outlined in the University of Arizona Global Campus Writing Center