Ask the Expert

FRAMINGHAM (08/01/2000) - Q: WHAT IS CAUSING THE RISE IN DEMAND FOR CHIEF ETHICS OFFICERS?

A: If corporate ethics is defined broadly--to include legal compliance, ethical conduct and corporate social responsibility--there is increasingly a recognition that pulling these matters together under a specific corporate officer has much benefit. The key tasks involved--standard setting, awareness building and internal report handling--are not well-handled in many organizations. And in other organizations, a separation of responsibility may lead to a lack of unity in approach. The position of chief ethics officer increases the emphasis on such matters and does so in a cohesive fashion.

Q: WHAT ARE THE PRIMARY DIFFERENCES BETWEEN THIS ROLE AND THE FUNCTIONS NORMALLY FILLED BY THE COMPLIANCE OFFICER AND INFORMATION SECURITY OFFICER?

A: At Columbia/HCA, I serve in all three roles. If one conceived of an ethics position alone, it would typically involve articulating standards of conduct in terms of organizational values and culture and inculcating these throughout the organization. It might also involve ethical sensitivity of major organizational decisions. Ideally, an effective corporate ethics officer would advise the company on business issues that pose value-laden decisions.

Q: AS A CHIEF ETHICS OFFICER, HOW WOULD YOU CRAFT AND SUBSEQUENTLY ENFORCE A GLOBAL ETHICS POLICY FOR A MULTINATIONAL ORGANIZATION? GIVEN THE DIVERSITY OF CULTURES AND ACCEPTABLE BUT DIFFERENT CULTURAL NORMS AND BUSINESS PRACTICES IN DIFFERENT REGIONS OF THE WORLD, IS IT POSSIBLE TO EXPECT YOUR EMPLOYEES AND OTHER BUSINESS PARTNERS (VENDORS, SUPPLIERS, PARTNERS VIA JOINT VENTURES, ALLIANCES AND SO ON) TO ADHERE TO A COMMON POLICY?

A: Your question is very insightful and frankly delves into one of the most challenging issues that faces multinational corporations. I think some aspects of business conduct are universal, such as an avoidance of a conflict of interest. On the other hand, some cultural distinctions may make American norms seem out of place. For example, increasingly, organizations are moving toward tight limits on offering or accepting gifts. This, however, is more acceptable in other parts of the world. I think the challenge is to consider the underlying purpose of an American policy and to ask what variations can be allowed in order to recognize cultural differences without sacrificing the ultimate objective. Many corporate social responsibility issues are raised in foreign operations, such as the application of environmental, health or safety standards from the United States to a foreign setting. The appropriate response in each of these areas depends greatly on the specifics of the situation.

Q: WHAT KIND OF BACKGROUND DO YOU HAVE? HOW DOES YOUR ROLE IMPACT YOUR COMPANY'S BOTTOM LINE?

A: I have an MBA and a law degree. As part of a government contracts law practice for many years, I was the coordinator (executive director) of a defense industry ethics initiative. I think the role can and does impact the bottom line. For example, part of my current job is to ensure compliance with laws and regulations, which certainly affects operations. We have seen numerous cases in the last 20 years where major ethical lapses have had disastrous effects on a company's overall well-being. If there had been an empowered ethics officer in some of those companies, he or she might have been the moral force to push a decision that proved fundamentally wrong in a different direction.

Q: WHAT IS THE JOB DESCRIPTION OF A CHIEF ETHICS OFFICER?

A: The chief ethics officer typically oversees all aspects of ethics and compliance programs; including standard setting; communication of standards; dealing with exceptions or problems; and overseeing, monitoring and ensuring the proper organization of operational supports. He or she also advises senior management in the ethical or compliance aspects of decisions.

Q: WHAT BACKGROUND SHOULD A CHIEF ETHICS OFFICER HAVE? WHAT KNOWLEDGE, SKILLS AND ABILITIES ARE NECESSARY TO BE EFFECTIVE IN THIS ROLE?

A: If the ethics officer is also the compliance officer, a law degree and some experience practicing law is helpful. In general, an ethics officer should be a good listener, open to varying ideas, highly nonjudgmental and something of a visionary and idealist (which is sometimes hard to balance with day-to-day pragmatism). He or she should communicate well and have some aptitude in the area of training. Exposure to a wide range of organizational ethics initiatives, through whatever means, is also useful.

Q: I'M SHOCKED THAT SUCH A TITLE EXISTS. ARE WE SO MORALLY BANKRUPT AS A COUNTRY THAT EMPLOYEES DO NOT KNOW RIGHT FROM WRONG? IS THE CURRENT POLITICAL AND SOCIAL ENVIRONMENT SO CORRUPT AND DISTORTED THAT ALL COMPANIES MUST RESORT TO ETHICAL EDICTS THAT MAY COUNTER AN INDIVIDUAL'S CONSCIENCE? I UNDERSTAND THAT MEDICINE HAS ALWAYS FACED ETHICAL PROBLEMS, BUT IS THIS NECESSARY FOR ALL COMPANIES?

A: The purpose of a formalized attention to business ethics is not to reiterate fundamental values--many of which are taught in the home--that we presume individuals learn as part of the maturation process. In other words, we are not trying to coach people on being honest, though we are sending a leadership message that says that business pressures should never be seen as justifying a lack of integrity. More concretely, the purpose of this effort is to assist individuals in identifying difficult business decisions that have some ethical dimension and then resolving these in a manner that reflects the organization's values. This may entail what I call microethical issues, such as what constitutes fairness in a particular procurement decision. Or it may entail macroethical issues, such as whether a U.S.-based company should meet U.S. environmental standards in a foreign country with fewer environmental laws. The amount of case material on this topic suggests the breadth of the field and its acceptance as a legitimate concern of business enterprises.

To recommend an expert for this column or suggest a topic, e-mail Senior Writer Daintry Duffy at dduffy@cio.com.

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