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You Cannot Buy an Ethical Corporate Culture

businessethics2I do not mean to be facetious or snarky, but I am concerned about organizations that sell or promote their ability to certify or give a seal of approval to a company as an “ethical” company.  Even more troubling (or perhaps misleading) is the certification: “world’s most ethical companies.”

With the growth of ethics and compliance, you can expect that charlatans, greedy snake oil sales persons and other market miscreants will appear on the scene seeking to cash in on their own quick fixes for ethics and compliance services and programs.

The marketplace has seen the expansion of organizations that offer for sale a certification or stamp of approval of a company as “ethical.”

The organization selling these certifications typically relies on self-reported information from the customer-company. To obtain these highly desired ethical stamps of approval, the customer-company is required to provide in-depth questionnaires, collect some documents, and then pay the certifying company an exorbitant (at least in my mind) fee for the valued stamp of being an “ethical” company.

We all know the dangers of conflicts of interest, but this situation is more than a conflict of interest. In many cases, it is a rip-off. Companies are happy to secure the approval, thinking that it gives them something of “value.” I hate to burst that bubble, but there are a number of real dangers from such certifications.businessethics3

First, the certification itself has no legal value. A company cannot rely on the stamp on its website of being an “ethical” company. The Department of Justice and any regulatory agency would quickly brush that fact aside and put in the trash heap of irrelevant comments and “facts.”

Second, the certification itself can create an attitude of complacency in the company. Corporate leaders may say to themselves, “Well, we are ethical, so we do not need to do anything else.” Promoting and maintaining a culture of ethics and compliance requires vigilance and not store-bought certifications.

Third, a real danger from this type of process is the fact that companies may be diverted from conducting real risk assessments, program evaluations and other reviews needed to maintain the continuous improvement cycle for their compliance programs. False prophets can be extremely damaging, and even in the compliance world, a false certification can lead to compliance disasters.

Fourth, and perhaps most damaging, there are no established industry and professional standards guiding the seal of approval for “ethical” companies. Internally, a certifying organization may have standards for how they judge a company’s ethics and ethicscompliance program, but no one (I am sure of it) has tested it nor validated the approach. At most, the certifying organization may have paid a number of consultants to help them develop the standards but who in the end is validating these standards?

I am always wary of self-congratulating organizations or business-motivated certification processes, whether conducted by for-profit or non-profit organizations. Certifications, seals of approval and other so-called standard-setting groups are creating and engaging in false safe harbors and deceptive practices. It is sad to see and reflects the demand for quick fixes instead of hard work, commitment and determination.

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  1. August 17, 2015

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