Ethics and compliance officers possess a unique perspective regarding the potential risks that an organization faces. This enables them to act as a type of sensor to help the board of directors, CEO and top management identify and understand what is occurring at the heart of the company, as well as a monitor to ensure the efficient ongoing implementation of all ethics and compliance initiatives.
A recent survey conducted by the Institute of Business Ethics provides additional insight into how senior E & C practitioners view their approach to the role by identifying three distinct “domains of activity”:
- Custodianship – Protecting and embedding organization standards and values; putting a human face on ethics and compliance via advising, providing education and training, and administering reporting hotlines and follow-up investigations.
- Advocacy – Continually reviewing existing standards and values, debating difficult issues and, when necessary, challenging business decisions that may pose an ethical or reputational risk.
- Innovation – Identifying and changing business processes that present an unacceptable risk of ethical and legal failure.
The Components of Ethical Leadership
The most effective ethics and compliance officers assume an active, highly visible leadership role in the building and sustaining of an ethical culture. According to executive coach and management consultant Jon Warner, strong ethical leadership requires a skillful execution of these four interrelated components:
- Purpose – Reasoning and acting with the “big picture” in mind in regarding the broader organizational purpose, which ensures consistent, focused decision making.
- Choice – Having the knowledge to make ethical judgments and choices when making decisions, while ensuring this mindset permeates the entire organization.
- Responsibility – Recognizing the ethical impact of decisions on all affected parties.
- Trust – Inspiring trust so that leaders can make ethically principled decisions and exercise their authority with complete confidence.
Specific Leadership Skills to Advance Your Ethics and Compliance Program
Compliance advisors Marjorie W. Doyle, CCEP-F,CCEP-I, JD and Kris Pugsley, CCEP list the following skills and traits that are essential to the success of any ethics and compliance practitioner:
- Passion – Too many organizations still take a “check the box” approach to ethics and compliance. The strongest E & C leaders are passionate about creating an ethical culture, which inspires employees and stakeholders to feel the same way.
- Being a role model – As an ethics and compliance professional, you are never “off duty.” You must set an example by always, walking, talking and acting in accordance with your program’s guidelines if you expect others to do the same.
- Speaking up – E & C officers must emphasize and demonstrate the value of speaking up about ethical misconduct, as this will make employees more comfortable about reporting inappropriate behavior and engaging in discussions on important ethics-related topics.
- Expertise – Ethics practitioners must possess a high level of expertise regarding the E & C issues that directly impact the organization, as well as a strong understanding of the role the function plays within the organization. Additionally, they must know which resources to employ to further develop their knowledge base.
- Anticipating ethical issues – The best way to prevent potentially devastating compliance failures is by anticipating the risks that could impact your organization. This entails a strong focus on risk assessment at all levels of the organization and keeping abreast of any changes in business plans.
- Communicating effectively – Ethics and compliance-related communications should be clear, concise and free of technical jargon. All communication efforts should have a specific purpose and attempt to increase understanding and awareness – not as a way to showcase your own knowledge.
- Staying current on organizational needs – The most successful ethics and compliance programs are the ones that are fully integrated into the organization’s business operations. As an E & C professional, it is your responsibility to reach out to key operations personnel throughout the organization and ask what you can do to tailor ethics and compliance programs to help them more efficiently and effectively.
- Exhibiting strong business skills – There are still many organizations where the E & C function does not receive the appropriate respect or is viewed as not making a positive contribution to the overall bottom line. As an ethics and compliance officer, you can boost the credibility of your department by demonstrating strong business skills in areas such as planning, budgeting, goal-setting and crisis management.
- Establishing good cross-departmental relationships – Fostering relationships with other departments will help build support for ethics and compliance programs and initiatives and possibly give you access to additional resources that can help you achieve your departmental objectives.
- Committing to continuing education – Constantly strive to increase your ethics and compliance knowledge base and incorporate what you learned into your employee and stakeholder training programs.
- Engaging program leaders – Focus on engaging the leaders in the various areas of your ethics and compliance program to encourage them to take ownership and dispense your message of its value to their subordinates.
Performing a thorough, honest assessment of your skill levels in these areas and striving to correct any identified weaknesses will enhance your effectiveness – and help you achieve your goal of establishing a strong ethical culture throughout your organization.