How Ethical is your Company?

How Ethical is your Company?

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According to Janette Minnaar-van Veijeren of EthicsSA, in the past as long as the relevant laws were followed, the ultimate outcome was not the concern of the compliance professional.

“The domain of compliance has always been the legislative framework – the realm of crimes and offences – but this has become the minimum standard,” Minnaar-van Veijeren said.  “Now, in addition to legislation, compliance professionals need to concern themselves with corporate governance – the realm of rules and policies – as well as with ethics.”

She said that ethics concerns doing what is right and good, beyond the demands of laws and regulations. It is about complying with universal laws such as fairness, honesty and integrity. “And being an ethical leader requires more than just talking about the right thing, but actually doing the right thing.”

Ensuring your organisation is compliant

Julie Methven, CEO of the Compliance Institute, said this places new demands on compliance professionals to question the actions of organisations in terms of their impact on all stakeholders, but particularly customers. “The compliance function should be sufficiently independent of business activities to be able to question decisions, if need be.”

Minnaar-van Veijeren said that for ethics to take root, companies need to build an ethical organisational culture. “The best set of policies will fail when the culture is unethical. On the other hand, when there is a culture of doing things ethically, things will most often be done right even if the policies are not in place.”

To identify ethical risks to your organisation, consider the following questions:

  • Are operational procedures in place to help employees maintain ethical behaviour?
  • Do your employees ever have to break your organisation’s rules to finish their work?
  • Have you ever hidden organisational practices that would embarrass the company if the public knew them?
  • Are any of your products or services described in a manner that could be regarded as misleading?
  • Do your activities show sufficient concern for the community?
  • Do our concerns about our environmental impact address just the issues that we are legally required to consider?

Methven said that an appropriate compliance culture should always include desired ethical behaviour, and should be promoted throughout an organisation.

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