Corporate Ethics: Whose Job Is It?

Who’s task is it to oversee ethics in a corporation? It’s tempting to say “everyone,” and at some level that of course is correct. Everyone is ultimately responsible for their own behaviour. People in management positions have some responsibility for those working under them. And anyone with the relevant knowledge and power has some responsibility for the behaviour of their organization as a whole.

But in 2010, many companies have also created special positions with the word “Ethics” (or some near synonym) in the title. So, which department should be home to that person? It’s not a trivial question. The Department that person is assigned to will to some extent determine the resources he or she has access to, and signals the company’s attitude towards the position. What’s the best choice? Here’s a terrific little article by Gina Passarella giving some insight into just that question:

Compliance Officers Play to Bigger Room

In a world of regulations, recession and corporate scandal, the creation of compliance and ethics roles has been on the rise. But what is dropping is the number of those newly created positions that are in any way tied to the legal department.

Because it was written for a legal publication, the article is mostly about how the issue looks from the point of view of lawyers, their job opportunities, etc. But it’s well worth reading for anyone with an interest in understanding how ethics, CSR, compliance, etc., are interrelated and institutionalized within corporations.

2 comments so far

  1. Jane Garthson on

    I strongly support the change to CEO or Audit Committee reporting over the legal department, which is too often focussed on legal minimums rather than aspirational standards. The Ethics Officer or unit can have access to legal advice just like any other part of the company, but does not need to be embedded.

    Being a direct report to the CEO ensures that the Board can still hold the CEO fully accountable for ethical performance. On the other hand, the Audit Committee route emphasizes the high risk involved in inadequate attention to ethics. I prefer not to muddle up CEO accountability. The Ethics Officer can be assigned to the Audit Committee as a key resource, along with the CFO, and both have direct access unfiltered by the CEO if there are concerns to report.

  2. Commlab India on

    Good Question – one thing is Corporate Ethics are meant for all the employees of a company, It is the responsibility that each employee should follow the ethics, Then there won’t be any question of arising Whose Job Is to see corporate ethics. A similar blog which speaks on ethics

    CommLab India

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