Ethics and Compliance Controls – Different Means to the Same Objective

People are getting confused. A company’s ethical culture is not a touchy-feely concept that makes everyone warm and cozy all over. At the same time, compliance controls are not hard and fast rules that are mechanically enforced with no regard to purpose or results.

I always get frustrated when people like to classify concepts as either black and white. People are uncomfortable with grey concepts, ideas that work together but are not easily classified. This observation finds support in Jungian psychology – people have trouble holding or acknowledging conflicting feelings – I like some aspects of a person but dislike other aspects of the same person.

The same goes for holding together a company’s ethical culture and its compliance controls – rather than operating in conflict, they mutually reinforce each other. Far from being at odds with each other, a company’s ethical culture and its compliance controls are not as different as they first appear or are perceived by some people.

Some compliance professionals favor a comprehensive set of rules and requirements governing corporate conduct rather than a more amorphous concept of ethical culture. Unfortunately, the question is not an either/or type of question. To the contrary, a company’s ethical culture reinforces its compliance controls and vice versa – a company’s compliance controls reinforce the company’s ethical culture.

Notwithstanding this clear fact of interdependence, compliance professionals who prefer specific compliance controls and enforcement of those controls can find solace in the area of ethical culture.

For those who want more objective tasks and measurements of performance, these compliance professionals should embrace measurement of ethics messages, meetings and commitment. Additionally, these tangible-oriented compliance professionals should dedicate time and attention to conducting employee surveys, focus groups and other structured meetings to develop criteria to monitor and measure the company’s “ethical culture” performance.

In this area, a chief compliance officer can develop criteria to measure a company’s culture on an ongoing basis. Employee survey responses are a good area to measure and monitor. These surveys provide quantitative measurements on responses to important questions such as perception of leadership’s integrity, willingness to report misconduct committed by other employees, and believe in the overall corporate mission of ethics and integrity.

A company’s ethical culture is, in fact, the most important control a company can implement. Employee misconduct can violate a company’s ethical standards, as articulated in its code of business ethics, and a specific compliance control. These two separate aspects of a compliance program should be acknowledged, promoted and preserved through enforcement.

Like many issues in life, the choice to focus on ethics or compliance controls is not an either/or choice; rather, it is one of mutual interdependence that requires a coordinated strategy.

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