Compliance in the service of ethics

Years ago, I was hired to conduct a C&E training “needs analysis” for an investment bank, and ran into an interesting problem with the ethics side of the project: my client contact explained that if I did identify any actual ethics issue at the bank, a new compliance policy would immediately be issued to address it. While I understood the logic of this approach (particularly in the financial services arena, given the degree and impact of regulation there), it certainly didn’t leave much breathing room for an ethics perspective. Since then, I’ve been fascinated by the connections (or lack thereof) between compliance and ethics – and the opportunities often presented to have one help elevate the other.

In a recent article in the Harvard Business Review,  Christopher McLaverty and Annie McKee make a number of important suggestions on “What You Can Do to Improve Ethics at Your Company.” They note that research by McLaverty  shows that “in contrast to what corporate compliance officers would like us to believe, their organizations’ codes of conduct and ethics training wasn’t particularly helpful when it came to managing ethical dilemmas.”

I completely agree that in many business organizations C&E  codes and training often don’t help employees resolve the sort of ethical dilemmas they are likely to face. I concur, too, with the authors’ various suggestions for gauging the ethical well-being of a company and with the finding from McLaverty’s study that “the most useful resource that leaders have when faced with an ethical dilemma is their own personal network. This provides an informal sounding board and can highlight options and choices that the leader may not have considered.”

But I do think more should be said on behalf of the role that compliance can have in promoting ethics in organizations.  A different way to look at the issue is how being exposed to the full range of C&E program measures at a company over the course of years can be helpful preparation for the moment when an ethics-related quandary  is presented.

From my perspective, codes and training aren’t the main story here, and never have been. They are, after all, mere preaching. More likely to be impactful are such measures as risk assessment, monitoring, auditing, use of metrics and various other accountability-related practices and procedures  – at least, when these are done in a serious, results-oriented way.

But what do they have to do with ethics? While each is a  traditional compliance activity, they can also be seen as part of a broader commitment to doing what is right – particularly by the many members of the workforce who don’t distinguish between C and E.  And, I believe that the beneficial habits of mind – i.e., “inner controls” – that should, over time, come with being in a company with a strong approach to  compliance can help lift a company’s ethics performance, including preparing managers for dealing with an ethics issue that is not addressed in the training or code.

I should emphasize that I’m not suggesting that every true ethical quandary is easier to resolve by those who work in companies with rigorous C&E programs. “Right versus right” dilemmas, in particular, may be outside the scope of what I’m describing. However,  there are doubtless many other sorts of workplace ethical challenges – particularly having to do with summoning the will, not finding the way – for which having a well-engrained habit of doing what is right could make a real difference.

A final thought: if what I’m saying is true it should work both ways. That is, a well-engrained habit of acting ethically should make compliance stronger in companies and individuals.

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