On Tuesday, I delivered the opening keynote at Convercent’s Converge17 event, where the theme was “Ethics at the Center”. The process of preparing for this talk, and conversations after the talk, have given me a great deal of food for thought.
Ethics vs. Compliance
Let’s look at the dictionary definition of compliance:
Compliance [noun]: (a) the act or process of complying to a desire, demand, proposal, or regimen or to coercion; (b) conformity in fulfilling official requirements.
It’s about giving in, yielding, conforming to some external forces.
External forces change. If you were in Germany in the 1930’s, the external forces required you to exclude Jews from every aspect of life. If you were in many parts of the United States before the Civil Rights movement, the external forces required you to separate the Colored from the Whites. To be in “compliance” in these times and place would mean participation in segregation, even genocide.
Turning our eyes from the past to the present and near future, if DACA is repealed, it would be illegal for companies to continue to employ employees who would suddenly become undocumented. If regulations on consumer protection, clean air and clean water are abolished, companies would be more free to cheat and pollute.
Would you do it – firing your Dreamer employees, cheat customers, pollute our environment – just because the law either requires or allows you to?
When you are faced with this kind of question, the only thing that can guide you is your own values, your ethics.
Ethics [noun]: (a) A set of moral principles: a theory or system of moral values. (b) The principles of conduct governing an individual or a group professional ethics
It’s about principles and values.
So, instead of asking: “What does the government expect/require of us?” Isn’t it time we instead ask: “What are our own values?”
Putting ethics at the center means knowing and living your own values. Compliance is merely knowing and meeting someone else’s requirements. Hopefully, our values set a higher bar.
Are Corporate Structures Driving Ethics?
As compliance professionals and companies begin to recognize the significance of ethics, some have renamed their compliance function “Ethics & Compliance.” As we all know, name changes can reflect a real change in orientation, but it can also be a cosmetic gesture. It is a starting point of recognition, but only a starting point. My concern is that most company structures, especially those in large companies, are not set up to drive an ethics-centered approach.
If you ask an “Ethics & Compliance Officer” what her/his responsibilities are, typically they include anti-corruption, anti-trust, trade. They usually do not include areas such as quality control, safety, environment, or Corporate Social Responsibilities (CSR). But what cause was at the root of cases such as VW (quality), Takata (quality and safety), or Deepwater Horizon (safety and environment)? Greed. Is that not ethics? What should be at the root of CSR initiatives such as sustainability and fair labor practices? Is it not ethics? Yet large corporations tend to compartmentalize them into quality, regulatory, and public relations (this is where CSR often is…very telling), completely outside the purview of the “Ethics & Compliance” function. What message does that send? It seems that these structures do not reflect a truly ethics-centered culture.
As a new business person, I now have some experience of being set up as a vendor for companies. True to my expectations, the larger the company, the more archaic and burdensome the process is. As I recently shared my experience with someone, this person told me about his experience of being a vendor to a retail giants, beginning and ending his narrative by referring to the company as “a horrible horrible company.”
Here is my question: Can a company behave ethically to its customers but unethically to its suppliers? In other words, can ethics be compartmentalized, with different standards applied to different constituencies? Are suppliers not also human beings who can also be customers? When your reputation is “a horrible horrible company” among suppliers, does that not impact the company’s reputation as a whole?
When I think of compartmentalized ethics, I think of the Nazi gas chamber guards and executioners who went home to hug their wives and children. Kindness applied to the children in their lives; ruthlessness applied to Jewish children. I think of certain corporate executives who demand loyalty and sacrifice from their employees, suppliers, and customers, but give none in return. I think of the parents and teachers who teach honesty and kindness to children, yet forgive the lies and destructive behaviors in their elected officials.
I think compartmentalized ethics is a dangerous thing.