“Compliance will always be slightly behind the imagination of the dedicated corruptor”–Philippe Montigny, President of ETHIC Intelligence, Paris
Do you know the difference between ethical behaviour and compliant behaviour? Is it acceptable for employees to simply “follow the rules,” without considering the broader ethical concerns of their actions? While ethics and compliance are two closely related concepts, there are some important distinctions to be made. Consider the following example.
Compliant vs Ethical Behaviour
Suppose you’re a new hire on a sales team. You’re eager to impress your new manager and are willing to go that “extra mile” to show that you’re a team player. So, when the manager asks you to pick up his coffee for him every day on your way to work, you think to yourself, “No problem…it’s only a coffee…right?” After a few weeks though, you notice that the manager doesn’t always reimburse you…but you let it slide, thinking, “Mustn’t rock the boat!” But things come to a head when he asks you for another favour…to pick up his dry cleaning! He’s in meetings all day and needs them before he flies out on business. You stand your ground, but when the manager gives you a disgusted look and mutters sarcastically, “Some team player,” you reluctantly agree, fearing the manager will look negatively upon your performance as a result.
Clearly, the manager is abusing his position of power here. It’s unfair of him to ask you for these favours, and it’s obvious that he’s taking advantage of your desire to be a team player and make a good impression. While his behaviour may be underhanded, he is not being physically or verbally abusive, nor is he being discriminatory. So, although he is not non-compliant with any laws or regulations, his actions are very much unethical.
This example highlights one of the core differences between ethics and compliance: compliance is often a legal requirement – it is a set of rules imposed by a higher authority, be it your organisation, industry, or government, that is designed to help you stay out of the courtroom; ethics, on the other hand, is about morals, and doing the right thing, regardless of what the rules might be.
Ethics – A Key Component of Compliance Training
This doesn’t mean that you should ditch compliance training altogether and focus solely on strengthening your employees’ ethical backbone. Compliance programs are highly effective at curtailing unethical behaviour; they promote rules, systems, and processes – the “what” and “how” of behaviour – that reduce an employee’s opportunity to commit a potentially illegal act.
However, regardless of how well you’ve outlined your company’s compliance policies, there will always be grey areas, like the example above, that may challenge your employees, or loopholes that can easily be exploited. This is where courses with a strong ethical component – that explain the “why” of behaviour – come in. These courses stop employees from rationalizing misconduct in the first place by outlining a company’s values and standards of behaviour.
Although ethics is often thought of as a personal, innate system that tells us what is right and wrong, it is also something that can be successfully taught through a well-designed and comprehensive compliance course. Typical compliance training programs that cover ethical considerations include personal and company expenses, gifts and entertainment, conflicts of interest, and diversity and inclusivity in the workplace.
The Impact of Ethics on Company Culture
So, why is it so important to create an ethical culture in a company? After all, if you’re making a good profit while staying legally compliant, isn’t that enough? Well, not exactly.
Firstly, ethics is vital in maintaining employee morale. For instance, in the first example above, the sales manager’s unethical actions could easily lead to bitterness and disillusionment within the workforce. This perceived unfairness could, in turn, lead to decreased productivity, as well as retention issues. And with Millennials making up the majority of the workforce, this is a huge consideration. As discussed in a previous post, Millennials are increasingly looking for workplaces that are socially responsible, so it’s incumbent on organisations to meet these demands.
Secondly, having a strong ethical culture is crucial in terms of a company’s reputation in society. No company gets a good name by just being compliant alone. They must also be seen to be taking proactive – rather than reactive – measures to ensure issues such as privacy breaches, discrimination, sexual harassment, and bribery do not arise in the first place, which is where having a strong organisational ethics component comes in.
Ethics and Compliance – Two Sides of the Same Coin
Although it may seem logical to combine ethical and compliance responsibilities in a single office or job role, research indicates that separating these overlapping, but distinct functions, can help reduce unethical and/or illegal behaviour. While a compliance officer can ensure employees adhere to current policies and regulations, advances in technology mean that they are continually playing catch-up. An ethics officer, however, focuses on company values and integrity, which will always remain relevant regardless of the latest developments.
Of course, it may not be possible for a company to divide these concepts into two separate offices and job roles, depending on the resources available to it. In such cases, organisations can instead use cost-effective compliance courses with a strong ethical core to ensure that employees not only adhere closely to policies and regulations but that they also consistently behave ethically and in line with company values.
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By Neil Cullen (Director, Compliance Learning, Interactive Services)