Business and Society Review
107:3 309–347
Integrating Business Ethics
and Compliance Programs:
A Study of Ethics Officers
in Leading Organizations
JOSHUA JOSEPH
INTRODUCTION
Overview
For more than a decade, ethics officers1 have been ‘‘making the
case’’ to business leaders and employees about the need for ethics
and compliance programs.2 Support for these programs has come
from academics and from the Federal Sentencing Commission,
which passed the new Federal Sentencing Guidelines for Organizations in 1991.3 The national media has also played an important
role. High-profile cases, like Enron, WorldCom, and Arthur
Anderson, are among the most recent to show the relevance of
ethical issues to business practices and the consequences of
overlooking them. These very public lessons have become harder to
ignore.
Whatever convergence of factors is responsible, it seems clear
that organizations have been paying more attention to ethics and
compliance programs. A recent survey by the Ethics Resource
Center is just one of several national employee studies reporting
substantial increases in ethics codes, training and related initiaJoshua Joseph is the research manager at the Ethics Resource Center, Washington, D.C.
This article is based on a study that was initiated and supported by the Ethics Resource
Center Fellows Program. Special thanks go to Ken Johnson for his close collaboration, to the
many others who read drafts of the initial report, and to the study participants who shared their
insights.
2002 Center for Business Ethics at Bentley College, Published by Blackwell Publishing, Inc.
350 Main Street, Malden, MA 02148, USA, and 108 Cowley Road, Oxford OX4 1JF, UK.
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tives since the mid 1990s.4 Yet even before the recent spate of
financial accounting revelations, business ethics had reached a
crossroads.
In many ways, ethics programs represent explicit corporate
commitments to do what is right. To meet these commitments
ethics programs must show that they work in a variety of ways.
They must address diverse organizational needs and expectations
that may include: raising employee awareness of legal and ethical
concerns, reducing financial risks, protecting brand and reputation, building employee trust and more. A key difficulty is that
ethics officers usually know more about developing programs than
about integrating them with their organizations’ formal systems
and informal practices. As a result, ethics successes in some areas
are often matched by continuing frustrations in others. While
uneven successes are common in such endeavors, progress is still
expected. The fact that there are few guideposts or models for
established programs to follow only adds to the challenges facing
ethics officers.
This study and article are based on the insights of ethics officers
in leading organizations who are wrestling with the kinds of
concerns described above. While certain sections address best
practices, the article’s primary aim is to explore next steps in
developing effective ethics and compliance programs. In doing so, it
seeks to raise questions, identify barriers, and, where appropriate,
suggest alternatives to current practice.
Defining Integration
Broadly defined, integration is the ability to put ethical principles
into practice: to make the substance of ethics programs a part of
the everyday work activities of employees at all levels. The premise
is that well-integrated programs will be more effective in achieving
an organization’s ethics-related goals than poorly integrated ones.
As one ethics officer in this study observed: ‘‘ethics programs
become truly effective to the extent that they can evolve and plug
into where a company is going.’’
What does a well-integrated ethics program look like? A working
definition was developed through conversations with a select group
of ethics officers involved in the ERC Fellows Program. They
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identified an integrated ethics program as one that: (1) is aligned
with an organization’s mission and vision; (2) fits well with
organizational systems, policies, and practices; (3) addresses
leadership priorities as well as employee expectations for ethics;
(4) is used by employees at all levels to help guide decision-making
and action; and (5) becomes a central part of an organization’s
culture over time.
As with many things, an integrated ethics program is easier to
describe than to achieve. Experienced ethics officers tend to see
integration as a continuous process rather than a destination. They
also recognize that past successes do not ensure future ones. As a
result, many seek assistance in understanding the complexities of
integration, targeting their efforts and overcoming barriers.
Study Design, Method, and Organization
This study is based on in-depth interviews with 26 ethics officers of
Fortune 500 companies and other leading organizations. We
tapped their knowledge and insights to better understand how
large and complex organizations wrestle with issues of program
integration (for further details on method, please see Appendix).
The study had four primary goals that included:
(1) Gathering key demographic information from participating
organizations to better assess similarities and differences
across ethics programs;
(2) Identifying the origins, priorities, and justifications linked to
ethics program development;
(3) Assessing how organizations structure their ethics programs
(e.g., reporting relationships, functional roles, and responsibilities) to achieve strategic priorities and goals; and
(4) Assessing how organizations use communications to help
implement their ethics programs.
This article is divided into four parts, each focusing on one of the
goals above. The parts are further separated into particular topics
that were explored in this study. Under each topic heading, study
findings are presented first followed by a discussion of the meaning
and importance of findings.
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PART I: PROFILES OF PARTICIPATING
ORGANIZATIONS
Overview
The content of organizational policies and procedures relating to
ethics are likely to differ across industries. Yet even within
particular industries, approaches to ethics may vary substantially
depending on company culture and context. To better appreciate
how participating companies in this study approached ethics
program integration, we gathered information on several key
factors relating to culture and context. While the resulting profiles
are selective, the information in this section provides a basis for
interpreting the findings presented in later sections.
Organizational Profiles
Findings
Organizations represented a broad sample of industries. Between
two and five organizations in each of the following industries/areas
participated in the study (the number of participants appears in
parentheses). Please note that emerging-technology companies are
not represented.5
Defense/ TeleFinancial
Aerospace comm. Services
Health
Government
Insurance Agencies
NonProfits Other
(4)
(3)
(3)
(2)
(3)
(3)
(3)
(5)
Strict industry regulations were common. Nearly three-quarters
of ethics officers described their industries as being subject to strict
regulation from state and federal governments in addition to other
regulatory bodies.
Organizations were well established and concentrated in the forprofit sector. Three-quarters of the organizations in this study were
public, for-profit companies. The rest were either private or mutual
companies, government agencies, or nonprofit organizations. Half
of the for-profit companies were more than 75 years old and several
had been in existence for 150 years.
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Workforces were large and concentrated mainly in the United
States. Three-quarters of organizations had in excess of 30,000
employees worldwide and some had more than 100,000. In half of
these organizations, less than two percent of employees worked
outside the U.S. In only three organizations were at least 50
percent of employees located abroad.
Organizations had well-established traditions, standards, and
norms but lacked cultural unity. At least half of ethics officers
described their organizations as having strong traditions, standards, and norms that pre-dated their ethics programs. At the same
time, only a few ethics officers felt a sense of cultural unity within
their organizations. About a quarter noted that cultural patterns
were more apparent at division or unit levels. Others felt that even
at this level, internal competitions or performance incentives
tended to divide rather than unify the corporate culture.
Mergers, acquisitions, and restructurings were common. Three in
four ethics officers reported that their companies had been through
at least one merger, acquisition, or restructuring during the last
five years. One in three ethics officers described these transitions
as periods of intense pressure and anxiety for employees. They
noted how resulting organizational changes commonly fueled
employee concerns about trust, fairness, and related ethical
issues. About one in four participants also noted that culture
clashes, resulting from transitions, created additional challenges
in ensuring ethics program consistency.
The age of ethics programs varied. About half of the organizations in the study had implemented their ethics programs
within the last 5 years, about three-quarters within the last 10.
The remaining organizations established their ethics programs
more than 10 years ago. For example, organizations in defenserelated industries did so following the creation of the Defense
Industry Initiative (DII) in 1986.
Meaning and Importance of Findings
In ethics, as in many realms, success often begins with understanding an organization’s culture and context in ways not readily evident
to outsiders. Ethics officers who implement generic ethics programs
are therefore unlikely to succeed. They must consider factors and
make program choices that fit their organizations. Relevant cultural
and contextual factors may include: industry, size and location of
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workforce, amount of regulatory oversight, leadership style, and
many others. An ethics officer’s ability to identify and monitor
such factors can be critical in setting ethics priorities, creating
infrastructure, and implementing practices to facilitate program
integration.
The fact that large organizations do not have a single, unified
culture makes integrating an ethics program even more challenging. The findings suggest that ethics officers should not expect to
fit their programs to one readily identifiable culture. Rather, the
integration process is likely to differ across various divisions,
business units, regions, and the like. Despite these obvious
challenges, the findings presented in Part III suggest that ethics
officers with long tenure and experience in their organizations are
often well prepared to navigate such cultural complexities.
Mergers, acquisitions, and restructurings affect all employees6
and can make program integration more complex. Such transitions may focus the attention of leaders too narrowly on the
bottom line and that of employees too squarely on personal issues.
If employees perceive management as acting unethically during
critical transitions, the negative effects may be long lasting. Shifts
in leadership during transitions can further disrupt support for
ethics initiatives. In either case, support for ethics programs may
diminish.
A related issue involves culture clashes that may occur during
mergers and acquisitions. Organizations seeking consistency in
their programs may decide that it is best to institute their own
ethics programs within companies they acquire. However, without
the support of management and employees in the acquired
company, the cultural fit is not likely to be good. Such challenges
suggest the need for ethics officers to remain flexible and active in
managing their programs, particularly in times of transition.
PART II: PROGRAM ORIGINS, PRIORITIES,
AND JUSTIFICATIONS
Overview
Ethics programs cannot be understood simply in terms of functions and practices, many of which are similar across organizations.
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It is important to remember that each ethics program is developed
in response to a specific set of circumstances (origins), is meant to
address key organizational issues (priorities), and is justified to
employees and to other stakeholder groups in particular ways
(justifications). These three factors can influence how an ethics
program is structured, implemented, and ultimately integrated
within an organization. If these factors shift over time, ways of
structuring and implementing a program may also need revising.
To better understand how these factors may impact integration
efforts, this section focuses on why organizations first developed
their ethics programs, what these programs were meant to achieve,
and how they have been justified to employees.
Program Origins
Findings
The U.S. Federal Sentencing Guidelines for Organizations (‘‘Guidelines’’) have spurred ethics program development. Almost without
exception, ethics officers credited the Guidelines with providing key
incentives and guidance to develop ethics programs or supplement
existing ones.
Many ethics programs originated following an ethics crisis. Half of
the ethics officers identified a crisis event that coincided with their
organization’s decision to develop an ethics program. Such crises
included public scandals, legal actions, and actual or threatened
government sanctions. Nearly all other ethics officers noted the
influence of general ethics concerns in their industries as well as
‘‘close calls’’ in their organizations that nearly resulted in ethical
crises.
Crisis events can strengthen organizational commitment to ethics.
About a quarter of ethics officers felt that past ethics crises in their
organizations are a key reason that leaders have remained
committed to ethics programs. They noted that it is often easier
to make the case, build support, and find resources for ethics
infrastructure when decision-makers have actually experienced a
crisis event. At the same time, they lamented that leaders too often
come to appreciate ethics programs ‘‘the hard way.’’
Doing the right thing was an important consideration. About onethird of ethics officers noted that their organizations were motiva-
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ted to do the right thing when developing their ethics programs.
However, only a handful felt that this was truly a primary driver.
Meaning and Importance of Findings
Recognizing initial links between ethics crises and ethics programs
in many organizations can help us to better appreciate how
programs develop and anticipate difficulties. For example, practical and political considerations may force some organizations in
crisis to develop ethics programs in great haste. Attention to ethical
concerns in such programs may be highly uneven. In addition,
initial program structures and practices may not suit long-term
organizational needs. Organizations may need to revisit their ethics
programs with these considerations in mind. These issues will be
addressed further in the following section.
While ethics crises usually have an immediate negative impact
on organizations, practitioners should also look for the silver
lining. A crisis or watershed event may provide opportunities to
learn and build leadership and employee support for ethics
initiatives. If addressed properly and thoughtfully, such events
can become touchstones for future ethics successes.
The central role of the Guidelines in drawing organizational
resources to ethics and in providing a basis for program development deserves additional mention. The study findings underscore
the importance of the Guidelines as a key external factor shaping
ethics program development.7 At the same time, integration of
ethics programs requires the ability to adopt external requirements while also meeting internal priorities and concerns. As
discussed below, it is critical to articulate the organizational
priorities that an ethics program will address and the criteria for
success.
Program Priorities and the Meaning of Success
Findings
Compliance was the initial focus of most programs. Nearly threequarters of ethics officers said their organization’s ethics and
compliance program was initially developed to satisfy a limited set
of compliance priorities. These typically included: meeting legal
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and regulatory requirements minimizing risks of litigation and
indictment, and improving accountability mechanisms.
Organizational priorities for ethics and compliance programs
tended to broaden over time. In nearly half of the organizations
studied, basic compliance programs served as springboards for
broader programs, many of which now also focus on ethical
values.8 An expanded set of priorities has been at the heart of
these changes. The priorities identified most frequently by ethics
officers included: maintaining corporate brand and reputation,
recruiting and retaining desirable employees, helping to unify an
organization’s global operations creating a better work environment for employees, and doing the right thing in addition to
doing things right. As one ethics officer summarized, ‘‘our focus
shifted from building to operationalizing the ethics function . . .
from having an ethics program in place to doing what we want it
to do.’’
Ethics drivers varied across organizations. While ethics officers
shared the conviction that ethics programs ‘‘make good business
sense,’’ specific drivers varied by organization. The following
factors were most frequently identified as drivers of ethics program
change: increasingly global operations, greater industry competition, a more mobile and selective workforce, heightened media
scrutiny, trust and morale issues among employees, and a desire to
balance multiple stakeholder interests.
How organizations judged their ethics program success varied.
Ethics officers typically used several criteria for judging the
success of an ethics program. About one in three ethics officers
said that a successful ethics program would: keep their organizations out of ethical trouble, bad press, and litigation; raise
employee awareness of company ethics standards and expectations; and increase employee comfort and willingness to raise
ethics issues. In addition, one in five said a successful program
would: increase management attention to ethics issues and demonstrate results of relevance to employees in their everyday
workplace interactions.
Meaning and Importance of Findings
Conceptions of business ethics appear to be changing as leading organizations become more proactive. Whereas their initial
program priorities were usually shaped by organizational crises
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and external influences, many organizations are now identifying
and pursuing their own ethics priorities. In particular, study
findings demonstrate that strict compliance programs are often
points of departure for implementing more comprehensive ethics
programs. This seems like a reasonable progression for organizations with maturing programs. Having invested substantial time
and resources, they are looking to do more and to achieve more
with their programs.
At the same time, change often brings uncertainty. Ethics
officers who are used to focusing primarily on issues of compliance may be unclear about how to integrate new priorities
dealing with ethical values into their programs. It is one thing to
choose building employee trust as an ethics priority. It is another
to turn priorities into realities through ethics communications,
educational initiatives, investigative processes and the like. As
will be discussed in Part III, problems may occur when organizations seek to achieve particular ethics and compliance priorities using methods that unintentionally conflict with other
priorities.
To limit conflicts in achieving varied program priorities, ethics
officers need to clearly understand their organizations’ priorities
and criteria for measuring ethics program success. Ethics officers
who lack this clarity may have greater difficulty in focusing
program resources and identifying potential incompatibilities. In
addition, confusion over priorities or success criteria makes it
harder to manage program expectations among an organization’s
leadership and its employees. As a result, the chance of disappointing one or both groups increases.
Conversely, clear priorities and success criteria can help ethics
officers to keep their programs focused and to evaluate progress. It
can also help them to ground leadership and employee expectations appropriately. While ethics programs may hold great promise
for success, it is probably unrealistic for ethics officers to try to
achieve too many priorities at once. By focusing greater attention
on fewer priorities and meeting their commitments, organizations
may have the greatest chance to sustain program credibility and
build on past successes.
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Justifying a Program
Findings
Organizations justified their ethics programs to employees in
different ways. Justifications differed depending on ethics priorities, organizational culture, context, and related characteristics.
Program justifications typically focused on three themes: (1) the
need to comply with legal requirements and industry regulations;
(2) the added benefits of ethics to the organization (e.g., increasing
competitive advantage, reducing financial risks, building and
maintaining customer trust); and (3) the added benefits of ethics
to employees in their own work (e.g., helping employees make
better judgments, building mutual respect and trust, creating a
better work environment, avoiding professional embarrassment).
While organizations often used multiple justifications when
implementing a program, there were some general patterns. Ethics
officers whose organizations had implemented strict compliance
programs were likely to emphasize legal requirements and industry
regulations. Those in highly regulated industries or in organizations facing ethics crises were also likely to do so. In contrast,
ethics officers with values-oriented programs were more likely
to emphasize additional program benefits (examples above) to
employees and to their organizations. This was particularly true
of ethics officers who were concerned with employee support or
‘‘buy-in.’’
Ethics officers commonly used their organization’s traditions and
long-held values to help justify ethics programs. More than a third
of ethics officers said that they based program justifications on
values and traditions derived from their organization’s past. These
included commitments to customer service in the retail industry,
patient care in the health industry, and client trust in the banking,
finance, and insurance industries. However, several also acknowledged that particular organizational traditions and values—such
as a ‘‘command and control’’ approach to decision-making—were
sometimes part of the problem and worked against desired
changes.
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Meaning and Importance of Findings
Organizations must justify their ethics and compliance programs
to their employees in some way. Essentially, these justifications tell
employees why programs are needed. Study findings show that
program justifications vary. In some cases, justifications for strict
compliance programs are as basic as citing legal and regulatory
requirements. However, when programs address issues and
encourage behaviors that go beyond legal requirements, more
substantive justifications may be needed to gain support. For
example, an organization may choose to publicly commit to its
stated values and clarify the expected benefits from its ethics
program.
Though they can be important in gaining initial support for
ethics programs, public justifications can have both positive and
negative implications. On the positive side, a compelling justification can help build momentum in launching an ethics program and
can serve as a touchstone for its progress. The downside is that
employees may become disappointed, angry, or cynical if expected
changes do not materialize in a timely manner.
Seasoned ethics officers have learned to promise only what they
can deliver—to justify their programs in ways that generate
support while realistically managing employee expectations. To
do this, ethics officers must ensure that their organizations’
strategic priorities and leadership commitments to ethical practice
are aligned with public justifications.
The study findings also suggest that while ethics programs often
begin in reaction to the status quo in organizations, important
elements of the past should not be dismissed. Where appropriate,
ethics officers should look for opportunities to draw positive
connections between ethics programs and existing organizational
traditions and values. For example, they may choose to emphasize
how ethics programs extend key values and traditions rather than
changing or replacing them. Denigrating the organization or overemphasizing the areas in need of reform may lead to defensiveness
on the part of employees. As one ethics officer summarized, it is
important to build on the positives and to ‘‘honor what is already
there in the culture.’’
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PART III: STRUCTURING AN ETHICS PROGRAM
Overview
It is reasonable to assert that the way an ethics program is
structured can impact its effectiveness and ease of integration
within an organization. But attempting to judge or even compare
the structure of ethics programs on such dimensions turns out not
to be straightforward. This is because particular structures are
more or less effective to the extent that they complement an
organization’s culture, its ethics priorities, justifications, and
related factors. The findings from this study suggest that no two
organizations structure their ethics programs identically. At the
same time, there are some important similarities across organizations that deserve mention.
Due to the breadth of issues related to structuring an ethics
program, we had to be selective in our exploration. This section
focuses on the relationships between program structures and
integration. The following topics will be addressed: reporting
relationships of the ethics function, how ethics programs are
organized, the roles and responsibilities of ethics officers, the role
of leadership in ethics program success, and staffing issues within
the ethics office.
Reporting Relationships of the Ethics Function
Findings
The reporting relationships of ethics functions differed across
organizations. In several of the organizations studied, the ranking
ethics officer reported directly to the company president or to the
CEO. More commonly, in about half of the organizations, the ethics
officer reported to a senior vice president—such as the corporate
secretary, chief legal counsel, or CFO—who in turn reported directly
to the CEO. In about a third of the organizations, the ethics officer
reported to a vice president or director who was at least several
levels removed from the CEO. Ethics officers who reported to higher
versus lower level executives also typically had greater access to the
CEO, though not necessarily more positive relationships.
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The degree of oversight exercised by ethics committees varied
across organizations. Ethics offices were typically overseen by
ethics advisory committees composed of senior-level executives.
The oversight exercised by these strategy-oriented committees, the
regularity of committee meetings, and the extent to which interviewees described them as ‘‘hands-on’’ varied substantially across
organizations.
Ethics officers believed that ethics reporting relationships were
strongly linked to program status and effectiveness. Almost all
ethics officers believed that ethics reporting relationships could
affect the autonomy of the ethics office, its prestige, and its
credibility among employees. More than half felt that having direct
access to the CEO was critical to the actual and perceived
influence of the ethics office within their organizations. At least
one in three felt that reporting relationships helped to determine
whether the ethics office was included ‘‘at the table’’ in making key
strategic decisions, rather than simply implementing them.
Meaning and Importance of Findings
While this study cannot definitively judge the impact of reporting
relationships on integration, the findings make clear that ethics
officers equate such relationships with program status, access to
resources, and the ability to move an ethics agenda forward. Their
conclusions make intuitive sense. In an era of managerial fads,
employees seek clues to judge which programs are worth their
attention and which are not. To ensure that employees get the
message that ethics programs matter, organizations should carefully consider to whom the ethics function reports.
However, access to ultimate leadership is unlikely to guarantee
program success. Beyond formal reporting relationships, the
working relationships between ethics officers and senior level
executives are paramount. Access means little without the respect,
trust, and commitment of leadership. Ethics officers who report to
lower level executives but get active support from their CEOs may
be more effective in their work than those who have formal access
but little actual support from leaders.
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Organizing a Program
Findings
Organizations share key program elements. Nearly all ethics
officers said that their organizations had in place a code of
conduct, mission, vision and values statements, procedures for
tracking and analyzing data, some type of ethics training, and a
way to monitor and maintain program consistency. More than half
also had employees sign their code of conduct each year, required
annual ethics training for all staff, and had an anonymous help line
that employees could call with ethics questions or to report
misconduct.
Organizations differed in the location and the degree of centralization of their ethics offices. In nearly three-quarters of organizations, the ethics office was located in the corporate headquarters
and its power consolidated there. About one in four organizations
also had ethics staff located in major business units or in regional
areas in the U.S. and internationally.
Organizations differed in the amount of ethics program oversight
and control exerted by the ethics office.9 As noted previously, all
ethics offices develop and oversee the administration of ethics
standards, related processes and procedures as outlined in the
Guidelines. But in meeting the Guidelines, organizations varied in
their exercise of program oversight and control. In about a quarter of
organizations, the ethics office oversaw the program and tightly
controlled all aspects of program administration. These programs
offered little flexibility to regional areas or business units in
addressing local ethical issues. Alternatively, in one-fifth of organizations, the ethics office had general oversight responsibility but
exerted less control in administering local programs. In such cases,
regional areas or business units were given moderate to significant
flexibility in handling local ethics issues. There was also a tendency
for organizations with compliance-oriented programs to exert greater administrative control than those with broader sets of priorities.
Different approaches to ethics program control have different
strengths. Ethics officers identified the following potential advantages for organizations that maintain high levels of administrative
control over their ethics programs: greater consistency in communicating ethics messages, distributing materials and providing
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training; more precision in monitoring and auditing ethics and
compliance efforts; and quicker decision-making around ethicsrelated issues.
Ethics officers identified the following potential advantages for
organizations that delegated substantial administrative control of
programs to local regions or business units: ethics communications and training materials that are more applicable to local
needs, greater employee involvement in programs, and more inclusive decision-making around ethics-related issues.
Meaning and Importance of Findings
The study findings suggest that in organizing and developing
control systems for their ethics programs, organizations may need
to balance potentially competing needs. A good example is the need
to ensure consistent ethics standards while building employee
support and ownership of ethics programs locally. Organizations
that over-emphasize central control to gain program consistency
may unintentionally sacrifice local employee support and ownership. Their employees may learn to ‘‘pass off ethics decisions on
corporate.’’ Conversely, organizations that emphasize employee
support and ownership cannot simply ignore program consistency.
If program effectiveness and integration depend on balancing
control with flexibility, how can organizations find an appropriate
balance? Findings presented in Parts I and II suggest that the right
balance will vary by organization and industry and will be
moderated by ethics priorities, perceived benefits, and risks. As
an example, regulatory requirements in the defense or insurance
industries may create risks for organizations with flexible (versus
controlled) ethics programs that outweigh concerns about employee ownership. In less regulated industries, such risks may be
minimal. In contrast, where program priorities and justifications
focus heavily on ethical values, organizations may be quite
sensitive to employee perceptions of program control. The risks of
losing employee support and ownership of ethics programs in such
organizations may outweigh concerns about control.
Finally, the findings remind us that structuring an ethics
program appropriately is not always intuitive. Ethics officers
should be aware that in furthering one set of priorities, their
program structures may unintentionally hinder others. Organizations moving toward values-oriented programs may be more at risk
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because they are accustomed to program structures that work
effectively with their basic compliance priorities. As a result, ethics
officers may not immediately see what changes are necessary to
ensure that older program structures continue to work with new
program priorities and justifications.
Ethics Officer Roles and Responsibilities
Findings
Ethics officers have frequent interaction with other organizational
functions. Ethics officers stressed the need to work closely with a
variety of functions including: legal, human resources, security,
audit, purchasing, and others. At the same time, about a quarter of
respondents highlighted the need for the ethics office to retain
some autonomy. These ethics officers noted that if employees did
not perceive the ethics office as a separate function, they might be
less inclined to seek out or trust ethics officers with sensitive
information.
Ethics officers shared similar responsibilities in their work. Threequarters of ethics officers interviewed shared all of the following
primary responsibilities: overseeing the ethics function, collecting
and analyzing relevant data, developing and interpreting ethicsrelated policy, developing and administering ethics education and
training materials, and overseeing ethics investigations (discussed
in more detail below).
The degree to which the ethics function takes part in investigations of misconduct varies across organizations. More than three in
four ethics officers said that they participated in ethics investigations. The ethics office tended to work closely with departments
such as human resources, auditing, legal, and security. However,
the degree of involvement varied considerably across organizations.
About half of ethics officers were directly involved in conducting
investigations, a third said they had a peripheral oversight role,
and the remainder said they had no role in ethics investigations. In
organizations where the ethics office had no investigative responsibilities, a separate compliance or auditing function typically
assumed this role.
Some ethics officers were responsible for disciplining employees
who commit ethics violations. More than a third of ethics officers
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said they were responsible for recommending and reviewing
disciplinary procedures. Where ethics officers were not involved
in discipline, other functions such as compliance, audit, or security
typically held these responsibilities. In almost all cases, final
decisions on disciplinary matters were left to the discretion of local
managers.
Ethics officers had different views about the importance of
investigative and disciplinary oversight in an ethics program. More
than half of ethics officers viewed the ability to investigate (and in
some cases discipline) unethical behavior as a sign of organizational support for ethics at the highest levels. They felt that unless
an ethics program had ‘‘teeth,’’ it would have little leverage with
management or employees. Several also felt that involving the
ethics office in investigations and discipline provided greater
consistency in handling cases. In sharp contrast, nearly a quarter
of ethics officers viewed investigative and disciplinary responsibilities as liabilities that could jeopardize credibility and undermine
their programs.
Ethics officers provided suggestions and insights to make the
investigative processes fairer and more transparent to employees.
A number of suggestions and insights focused on ways to balance
an organization’s investigative priorities with the desire to build
employee support for ethics programs. They included the following:10
(1) Ensure that staff members responsible for ethics investigations are not focused too narrowly. Several ethics officers
were concerned about their staff working exclusively on
ethics investigations. They felt this could limit an investigator’s perspective and impair their decision-making abilities. Where staff members were required to work full time on
ethics investigations, ethics officers suggested choosing employees with prior operational experiences. They felt that
such experiences tended to give investigators a broader
perspective and sensitivity to nuances they could otherwise
miss.
(2) Tell employees who report misconduct what to expect from
investigations. Ethics officers noted that employees often do
not know what to expect when they report wrongdoing. This
can cause anxiety and frustration for employees, particularly
when investigations take a long time. Several ethics officers
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suggested reviewing the steps in the investigative process
with employees who report wrongdoing. Where possible, they
also suggested periodically keeping employees informed on
the progress of investigations.
(3) Tell employees how decisions are made regarding ethics
investigations. About half of ethics officers said that, despite
their best efforts, they could not ensure that the outcomes of
ethics investigations would satisfy their employees. Still,
several noted that telling employees about the investigative
and decision-making processes helped to increase employee
perceptions of fairness even when eventual outcomes were
disappointing.
(4) Address the concerns of employees under investigation (e.g.
anger, confusion, betrayal) who may feel blindsided by the
process. Several ethics officers noted the importance of telling
employees under investigation about the process. One ethics
officer also noted that organizations can also help restore
employee trust when ethics charges prove unfounded.11
Her approach was to meet with these employees to let them
critique the investigative process and also ‘‘vent’’ possible
feelings of anger and betrayal. This is one way to show respect
for employees and to solicit suggestions for process improvements.
(5) Be an ethics officer not a police officer. Several ethics officers
highlighted the need to balance their investigative roles with
their other roles as an ethics officer. As one interviewee noted,
‘‘you can’t do the job successfully if you are . . . a police officer
monitoring everyone, because no one will want you around,
no one will invite you to their meetings, and no one will have
lunch with you.’’
Ethics program audits can be an important means to ensure
program consistency. Two in five ethics officers said that they
conducted formal audits of their regional or business units to
ensure that ethics procedures were being followed.12 Depending on
the organization, audits were conducted either annually, every two
years, or less regularly. Several ethics officers noted that auditing
was an important way to encourage managers to regularly take
stock and pay attention to the details of organizational ethics
programs.
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Meaning and Importance of Findings
This study identifies both similarities and differences in ethics
officers’ roles and responsibilities. Recognizing these similarities
and differences can have important implications for program
integration. As an example, the discussion below focuses on how
the responsibility for ethics investigations may fit or conflict with
program priorities and justifications.
The findings show that some ethics officers believe that the
authority to investigate misconduct builds program credibility
among employees whereas others feel this authority may undermine credibility. This apparent contradiction can be explained by
understanding key differences in program priorities and justifications across organizations. For example, when program priorities
and justifications center on compliance, an ethics officer’s investigative authority serves to reinforce the compliance message.
Employees who have been told that a program is focused on
compliance view this authority as consistent with program justifications. In other words, this authority fits with employees’
expectations for strict compliance programs.
The situation can become more complicated when program
priorities and justifications focus on compliance and on ethical
values such as building organizational trust, employee retention,
and so forth. In such cases, ethics officers still need investigative
authority to reinforce compliance priorities. However, they must
use this authority in ways that employees perceive as consistent
with stated ethical values and program justifications. In some
cases, balance may be difficult to achieve. An ethics officer’s
investigative roles and responsibilities may not always fit with
employees’ expectations for values-oriented programs. From the
data, we can speculate that the more an organization emphasizes
ethical values to justify its program, the greater the need to ensure
that employees view investigations by ethics officers as consistent
with that program.
As suggested above, the study findings have implications for best
practices in ethics programs. A key point for ethics officers is that
program integration may require reviewing their roles and responsibilities to ensure that they are performed in ways consistent with
stated program priorities and justifications. This can be particularly important for organizations seeking to achieve multiple
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program priorities and for those moving from strict compliance to
more values-oriented programs.
Finally, the findings suggest that how the ethics office communicates with employees about its roles and responsibilities can
have an important impact on how ethics programs are perceived.
For example, it may be important to tell employees who report
misconduct what to expect from the investigative process. We will
address communications in more detail in Part IV.
The Role of Leadership13
Findings
High-level champions are often central in creating ethics programs.
In more than half of organizations studied, the CEO or Chairman of
the Board initially championed the creation of an ethics program.
Ethics officers in other organizations identified senior executives
from their legal, finance, security, audit, and other departments as
program champions.14 Ethics officers noted several key roles of
champions in helping to develop their programs. These included:
initiating and promoting the ethics program; dedicating staff and
resources for ethics initiatives; and ensuring the autonomy and
credibility of the ethics office.
Ethics programs can benefit from a leader’s active participation.
About two in five ethics officers counted the active participation of
their leaders as a key advantage in the continuing development of
their ethics programs. The term ‘‘active participation’’ was used to
identify visible behaviors that went beyond the creation of an ethics
program. These included: talking with employees and other stakeholders about the importance of ethics in their organization’s
success; showing a public willingness to address difficult or
ambiguous ethical issues; modeling ethical behaviors; promising a
long-term commitment to ethical learning within the organization;
and serving on ethics oversight committees.
Ethics officers suggested that a leader’s involvement reminds
employees and stakeholders of a program’s importance and helps
to create a sense of investment among leaders themselves. In
addition, about half of the respondents noted that positive
relationships with leadership enhanced their effectiveness as
ethics officers.
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Meaning and Importance of Findings
The idea that the ethical tone is set at the top of an organization is
pervasive in the business ethics literature and in the anecdotes
shared by ethics officers. It seems intuitive that a leader’s ongoing,
visible support can bolster a program’s credibility and importance
in the eyes of employees and other stakeholders.
Such support may be especially important for programs that focus
on ethical values. As noted previously, values-oriented programs, as
compared to strict compliance programs, are often justified to
employees in ways that raise expectations for program success. A
leader’s active participation in such programs can send a dual
message that underscores a program’s importance to the organization as well as the leader’s personal interest in seeing it succeed.
Choosing an Ethics Officer
Findings
Many organizations choose employees with long tenure and diverse
experiences to become ethics officers. More than half of the ethics
officers we talked with had 10 to 25 years of work experience in
their current organizations. They tended to view their tenure and
experience as important to program success. In particular, their
track record was a known quantity to senior leadership and to
other employees in the organization. As one ethics officer commented, ‘‘whoever is in charge of the ethics program has got to be
respected and perceived as credible.’’
The personal networks and operational experiences of ethics
officers may be crucial in facilitating an ethics program’s success.
Prior to becoming ethics officers, three in four respondents said
they had experience in a variety of other areas within their
organizations. Ethics officers believed that their experiences and
related contacts helped to: facilitate their understanding of operational details and the role of ethics in the larger organizational
picture, increase their personal credibility as ethics officers in the
eyes of employees, and use appropriate channels effectively to get
things done.
Ethics officers may serve as linchpins for ethics across different
functional areas. About a third of ethics officers noted that they
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maintained key relationships across departments and functional
areas to promote their organization’s ethics agenda. They did so
formally—by serving on a variety of interrelated committees—and
informally through their personal interactions.
Meaning and Importance of Findings
The frequent need for collaboration and trust in the work of ethics
officers makes their positions sensitive ones to fill. An organization’s ability to choose a suitable ethics officer for its program can
be an important element in successfully integrating that program
within the workplace.
In many cases, choosing an internally credible ethics officer with
operational experience may be very beneficial. Because such
individuals typically have strong interpersonal networks, credibility, and knowledge of their organization’s culture, they are often
able to ‘‘hit the ground running.’’ However, there are also situations
where an ethics officer’s prior or ongoing relationships with an
organization’s leadership may become a liability. This can occur if
leadership itself has been associated with past wrongdoing. In such
cases, it may be best to select an ethics officer who is new to the
organization. Organizations should consider these kinds of factors
in choosing an ethics officer who is capable of moving an ethics
program forward.
Staffing a Program
Findings
The staffing of ethics programs varied across organizations. In
about a third of organizations, ethics officers and staff devoted
their full time to ethics-related activities. In about half of the
organizations studied, ethics offices were staffed with a mix of
employees who worked either full or part time on ethics activities.
In a handful of organizations, all ethics officers and staff had other
work duties in addition to their ethics work.
The number of staff working in ethics offices varied considerably.
Including administrative personnel, most organizations had between five and fifteen staff members in their ethics offices. Where
there were larger numbers of employees working in ethics offices,
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this usually included other specialized staff functions that fell
under the ethics umbrella.
Ethics officers identified pros and cons of alternative staffing
approaches. Below are some insights of ethics officers comparing
the use of part-time and full-time staff in ethics functions:
(1) Part-time ethics staff members who retain other duties can
bring important operational knowledge and experience to the
ethics office. Part-time staff members who have operational
experience are often well prepared to deal with a variety of
ethics issues and can also be helpful in increasing program
credibility among employees.
(2) The ethics knowledge of part-time ethics staff may not be on
par with that of full-time staff members. Because ethics is not
their sole focus, part-time staff may have less training and
experience in handling ethics-related tasks than their fulltime counterparts.
(3) Using part-time ethics staff can help to increase program
ownership among employees and reduce potential isolation of
the ethics function. Part-time staffing models give employees
from other functions substantive involvement in administering ethics programs. Such involvement can increase program ownership. In addition, some organizations seek to
enhance ownership of ethics programs by periodically rotating employees from other functions through particular
ethics positions. Rotation strategies can be used to fill either
full-time or part-time ethics positions. The main drawback is
that each new employee must ‘‘come up to speed’’ in the new
position.
(4) Full-time ethics staff members have greater continuity in their
positions as compared to part-timer staffers. Full-time attention to ethics programs can help to ensure consistency in the
work of the ethics function. In particular, full-time employees
may be more effective in following up and completing ongoing
projects, such as ethics investigations, in a timely fashion. In
contrast, timeliness in ethics-related work can be a problem
for part-time ethics staff because their other responsibilities
may sometimes take precedence.
(5) Organizations with very few ethics staff members, whether
full time or part time, can have difficulties addressing ethics
issues proactively. Without sufficient support, ethics staff
members can become overwhelmed by daily operational
responsibilities.
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Meaning and Importance of Findings
The findings suggest that there is no uniform approach to staffing
an ethics program. At the same time, staffing decisions can have
important implications for ethics program integration. Ethics
officers should be aware of the diversity of staffing options and
pay special attention to the advantages and disadvantages of
employing full-time versus part-time ethics staff members.
In addition, certain approaches to staffing may prove more or
less effective for organizations depending on their ethics priorities
and goals. Awareness of program priorities and goals can help
ethics officers to better evaluate and choose appropriate staffing
options. For example, organizations seeking to encourage program
ownership among employees may want to explore at least some
part-time or rotating ethics positions as a means to expose more
employees to the ethics office and its functions.
PART IV: ETHICS COMMUNICATIONS
Overview
There are many ways to communicate with employees about ethics.
Experienced ethics officers know that how they communicate can
have a marked effect on how employees perceive and respond to
their programs. Even well-structured programs can fail if their
focus and intent are misunderstood or if ethics strategies and
practices do not engage employees. This section focuses on how
organizations communicate with employees in general and through
specific mechanisms such as: developing codes of ethics, providing
education and training, and establishing means to get ethics advice
and report misconduct.
Communicating with Employees About Ethics
Findings
Organizations used various formal approaches to communicate
ethics standards to employees. Nearly all ethics officers said that
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their organizations distributed a code of conduct. About three in
four organizations provided some form of ethics training for
employees and nearly two in three had an ethics help line. About
one in five ethics officers also noted that ethical behavior was part
of employee performance and salary reviews in their organizations.
Ethics officers used multiple means to deliver ethics-related
messages and encourage further dialogue. The means identified
by ethics officers included: e-mails, intra-net sites and other forms
of web-based delivery, newsletters, articles, posters, videos, speeches by organizational leaders, facilitated discussion sessions with
employees, and so forth. Ethics officers felt that by using multiple
approaches to deliver their messages, they had the greatest chance
of reaching diverse groups of employees and of meeting organizational and employee needs.
Many organizations regularly solicited employee input about their
programs through formal and informal means. Two in three ethics
officers said they solicited employee input in one or more of the
following ways: conducting surveys and focus groups, responding
to questions on ethics advice lines, taking suggestions in training
sessions and at other times, and discussing ethical issues informally with individuals and in group settings. Finally, several ethics
officers noted that by seeking employee input on ethics, their
programs reinforced the message that employee views matter to
their organizations.
Employee input on issues of workplace ethics can make a
difference. Among other benefits, ethics officers credited employee
input with: drawing attention to differing ethical needs among
employees in different positions, levels, or functional areas
within their organizations; identifying potential areas for program
improvement; and highlighting program elements that employees
viewed as effective or useful.
Ethics surveys may meet some informational needs but not
others. About one in three ethics officers said their organizations
conducted some form of employee ethics survey to gather quantitative information. Ethics officers typically found these surveys
useful in providing general information on observed misconduct,
willingness to report misconduct, usefulness of training programs,
and similar topics.
At the same time, ethics officers noted a number of difficulties
with surveys. About one in four said that their employees were
already over-surveyed, making it difficult to gather trend data.
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Several others noted that they were only allowed to insert a handful
of ethics questions into an existing organizational survey. As a
result, they could not address many important issues. Ethics
officers whose programs focused on ethical values as well as
compliance faced additional survey challenges because of their
need to assess employee views on a broader range of program
aspects. Unfortunately, this was not always possible.
Some organizations seek to engage employees in ongoing dialogue about ethics. About one in four ethics officers talked about
drawing employees into regular dialogue on workplace ethics
through training sessions, focus groups, informal discussions,
and other means. The term ‘‘dialogue’’ was used to indicate twoway ethics communications, as compared to those in which
information is simply delivered to employees or solicited from
them. As one ethics officer noted, dialogue is another way of putting
ethics ‘‘in front of people.’’ Ethics officers in this study whose
programs focused on ethical values were more likely to encourage
dialogue than those with strict compliance priorities.
Ethics officers seek to address employee skepticism and cynicism
toward ethics programs through communications. Nearly three in
four ethics officers said they were routinely challenged to address
employee skepticism or distrust of their programs. The challenges
were varied and included employee perceptions that ethics programs: served as protections for management, were meant for
appearances rather than substantive purposes, showed management’s distrust for employees, and were an organizational fad.
Several ethics officers also linked employee cynicism to past
corporate actions during mergers, restructurings, and downsizings.
Meaning and Importance of Findings
The findings show that ethics officers view communications as
essential to the successful integration of their programs. Communications can be formalized through codes of ethics, education and
training initiatives, and help lines. These can be used along with
less formal means to further program priorities and goals. Each of
these approaches can be used to reinforce the others as part of a
comprehensive strategy for communicating ethics.
The remaining discussion touches briefly on an organization’s
ability to deliver ethics messages effectively. It then addresses how
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organizations solicit input and engage employees in ethics dialogue.
Through codes of ethics, training materials, and other communications, organizations try to clearly articulate the meaning and
importance of their ethical standards to employees. There are many
publications available that discuss techniques and approaches for
doing this well. Yet, sometimes overlooked is the ability to let
employees know how ethical concerns impact critical decisions at
the highest organizational levels. For example, when leaders make
decisions with substantive ethical implications such as downsizing, they have opportunities to present their ethical and not just
economic reasoning. Such communications can reinforce the
message that ethics matters in business decisions at all levels. In
contrast, when employees perceive mixed messages about ethics or
are uncertain of their organization’s ethical stance, they may be
less likely to remain supportive.
Employees can also serve as a critical source of input and
feedback for ethics officers. The information that ethics officers get
from employees can help them to monitor program effectiveness,
make sensitive program decisions, and increase program support
among employees. Employee input can be particularly useful in
surfacing key differences in how management and employees
perceive ethics. For example, employees may perceive contradictions between ethics rhetoric and actual practices of which
management is unaware. To build support for ethics initiatives,
organizations need to surface these perceptions.
Experienced ethics officers also recognize that the quality and
breadth of employee input often depends on the questions put to
them. To learn what employees think and to benefit from their
suggestions, organizations need to ask questions on topics that
matter to employees as well as management. The right questions to
ask will depend on program priorities and goals. For example, while
it may seem appropriate for organizations with strict compliance
programs to limit input to compliance issues, those with valuesoriented programs may need additional information. They may
want to ask employees: what ethical issues they encounter most in
their work, whether the ethics program addresses these issues,
whether core ethical values are being practiced, and whether
leaders are modeling ethical behavior appropriately.
In contrast to compliance questions that typically address
management concerns, questions like those above seek to address
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issues that directly concern employees in their daily work. As one
ethics officer noted, ‘‘people can’t put themselves in the shoes of a
company. They identify with their peers and workgroup.’’ Put
another way, organizations with values-oriented programs should
not necessarily model their communications efforts on those
with strict compliance programs. Rather, to encourage employee
involvement and build program support, they may need to seek
input on additional topics of concern to employees.
Finally, those who seek employee feedback should be prepared
to respond to it. It does little good, and may actually cause
problems, when ethics officers solicit but fail to address employee
concerns. A rule of thumb mentioned by several ethics officers is
to limit questions to topics that their organizations are willing to
address.
Developing a Code of Ethics
Findings
Ethics officers seek to create codes of ethics that provide guidance
but do not intimidate employees. Several ethics officers indicated
the need to create codes of ethics that were clear and concise but
not overly technical in specifying standards. They noted that for
codes to be useful, employees must be able access information
readily. Less accessible codes can actually add to confusion and
fear. As one ethics officer observed, trying to use particularly dense
or legalistic codes is like navigating an ‘‘ethical maze or minefield.’’
Organizations varied in their approaches to developing codes of
ethics. In about two-thirds of organizations, middle and senior level
managers developed ethics codes with little or no input from lower
level employees. The remaining third of organizations solicited
employee input in developing their codes. In addition, about a
quarter of ethics officers noted that while their organizations had
initially developed their codes without employee input, they did
solicit such input during subsequent program or code revisions.
Organizations that solicited employee input during code development or in code revisions used several primary approaches. Ethics
officers typically used one or more of the following approaches to
solicit employee input: interviews, focus groups, and surveys. A
handful of organizations took additional steps including: distribu-
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ting draft codes for general employee comment and pilot-testing
their codes in specific locations prior to rollout.
Organizations that chose not to solicit employee input during code
development or in later revisions did so for varying reasons. Ethics
officers identified one or more of the following reasons to explain
why their organizations did not solicit employee input: limited time
and resources to develop a code, mistrust of formal data-gathering
methods, fear of creating documents that might adversely affect
their organization’s interests in future litigation, and a belief that
employee input was unnecessary because code content was almost
entirely determined by legal and regulatory requirements.
Meaning and Importance of Findings
A code of ethics can be a useful guide for employees—one that
identifies key ethical standards and helps to clarify what organizations expect in terms of behavior. Effective codes can help to
raise ethical awareness, facilitate dialogue, and encourage
employees to take greater ownership of ethics programs within
their organizations. The comments of several ethics officers in this
study also remind us that, to fulfill their promise, codes must be
clear, readable, and accessible to employees. Codes that are not
may frustrate employees, increase their confusion, and even
induce fear of action.
Findings from the study also suggest a contradiction in some
organizations between their espoused and actual practices for code
development. Whereas ethics officers talked about the importance
of employee input, particularly in developing values-oriented
codes, at least one in four admitted that they did not seek this
input within their own organizations. This is understandable in
crisis situations where external pressures may require an organization to develop a program very quickly. However, it does not
explain why some organizations with values-oriented programs
have not actively sought employee input at later opportunities.
For organizations with values-oriented programs, the above
example is an important reminder that stated ethics priorities
and justifications are sometimes poorly aligned with actual practices. Organizations that overlook such problems risk disappointing their employees, feeding cynicism, and undermining their hard
work in other areas. This may limit integration and program
effectiveness.
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Ethics Education and Training
Findings
Ethics officers emphasized the importance of education and training
in raising awareness of ethics at work. All organizations in this
study conducted some form of ethics training for employees. About
three in five of these organizations mandated ethics training for all
employees. One ethics officer summarized the views of many in
saying, ‘‘the training program is one of the most important things
that you can do to promote ethical practice. It’s the element of your
program that will be seen, felt, touched and experienced by every
single employee.’’
The focus of ethics education and training varied across organizations. Organizations typically focused on ethics education and
training in two broad areas: general awareness and functional or
job-specific awareness. The former emphasizes broad organizational standards, policies, and procedures. The latter identifies
specific areas where ethical issues are likely to arise within
employee job functions. About a half of the organizations provided
general ethics training alone. The remainder provided a combination of general and job-specific training. Ethics officers noted that
regardless of the training focus, the most effective sessions
typically address issues and topics that are both substantive and
relevant to their audiences.
Ethics officers were concerned about updating their training
initiatives. Despite confidence in the quality of their current
training initiatives, about half of ethics officers felt challenged to
keep training fresh and vital for employees. Several felt that their
training efforts needed to evolve with their employees. As one ethics
officer noted, ‘‘Our audience has matured. I think it’s insulting to
hit them with the same stuff year after year.’’
Methods of delivering ethics training differed substantially across
organizations. Ethics officers selected delivery methods based on
perceived organizational needs, resources, and culture. Often, they
used more than a single method to deliver their training. Methods
included training delivered by: ethics officers in partnership with
human resources or other departments, ethics officers in partnership with external trainers, employee trainers who participated in
train-the-trainer sessions with ethics officers, managers supplied
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with ethics training materials developed by the ethics office,15 and
employees using self-administered videos, modules, and other
tools. Company intranet sites were often used to deliver selfadministered training.
Ethics officers noted that different approaches to training have
different strengths. They highlighted the appropriateness of various
training approaches in meeting different organizational needs.
Their observations included the following:16
(1) Training led by managers can increase manager involvement
and encourage ethics dialogue between staff and managers.
This training approach requires managers to take time to
understand ethics materials well enough to discuss them
with employees. In addition, such training ensures faceto-face ethics discussion between managers and employees—an important first step in establishing ongoing ethics
dialogue.
(2) Training led by managers may be of inconsistent quality.
Several ethics officers were concerned that the use of unprepared or disinterested managers could lead to wide variations
in the quality and effectiveness of ethics training received by
employees.
(3) Training led by managers or designated employees can facilitate program ownership. Some ethics officers, interested in
furthering employee involvement in their programs, felt that
they could better accomplish this task by using nonprofessional trainers such as managers and designated employees.
One observed that despite a few difficulties, ‘‘it is more
important to have someone be excited about training and
[ownership of] ethics.’’
(4) Training led by ethics professionals, managers, and designated employees can facilitate dialogue and offer greater
responsiveness to audience needs. Ethics officers who
were interested in ethics dialogue and discussion preferred
group-training approaches that encouraged employee
interaction. They also noted the ability of good trainers to
adjust training sessions to the unique needs of particular
employee groups17—something that is more difficult to do
with
videos
and
other
self-administered
training
materials.
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(5) Professional ethics trainers and self-administered training can
provide greater accuracy and consistency in delivering ethicsrelated information to employees. Some ethics officers felt that
using professional ethics trainers or self-administered training materials afforded greater consistency and control over
training content as compared with other approaches.
(6) Self-administered ethics materials can offer greater convenience in training at a lower cost. Ethics officers who favored
using self-administered materials noted that employees could
take the training at individually convenient times. They could
also avoid scheduling and other logistical problems associated with stand-up training sessions. In addition, several
ethics officers felt that costs associated with developing and
using self- administered materials were lower than those for
other training methods.
Meaning and Importance of Findings
Ethics education and training initiatives can be a critical means to
communicate with employees. Through these initiatives organizations can: raise ethical awareness, emphasize the relevance of
ethical issues, answer employee questions and address their
concerns, stimulate ethics dialogue among employees and managers, and encourage ownership of ethics programs at all levels.
There are many approaches available to deliver ethics education and training to employees. The right approach for any
particular organization depends, in part, on its program priorities
and justifications. Awareness of the different options available
can help ethics officers to better evaluate and choose an
appropriate training option. For example, organizations interested
in the consistency and ease of training, and less concerned with
interactive dialogue, may opt for self-administered training
materials. Those more concerned with encouraging interactive
dialogue and responsiveness to individual needs may prefer to
have ethics officers, managers, employees, or experts lead training sessions.
Ethics officers should also recognize that they are not limited to
a single training approach. For example, an organization might
decide to use stand-up trainers to deliver general ethics training
but use self-paced modules to deliver job-specific training.
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Seeking Help and Reporting Misconduct
Findings
Ethics advice lines18 are an important source of communication
with employees. About half of the organizations studied had an
ethics advice line for employees to ask questions and report
unethical behavior. While most organizations used internal staff
to take advice line calls, about a quarter outsourced this function. Whether advice line services were outsourced or handled
internally, both methods provided the option for callers to remain
anonymous.
Ethics officers identified several key benefits of answering advice
line calls internally as well as outsourcing them. Benefits of
answering advice line calls internally included: the opportunity to
communicate directly with employees, the chance to gain additional information from employees, and the ability to answer many
employee questions at the time of the call. The benefits of
outsourcing advice line calls included: the ability to take employee
calls after normal working hours, increased employee perceptions
of anonymity, and an increased ability to field calls in different
languages.
Advice lines should be presented as one possible source of ethics
information, not necessarily the first point of contact. About a
quarter of ethics officers noted the importance of introducing
advice lines as one of several available sources of information. To
ensure that the advice line was not viewed as a substitute for
discussing ethical issues with managers, these ethics officers said
they encouraged employees to go to their managers as the first
point of contact.
Meaning and Importance of Findings
Ethics advice lines can offer organizations the opportunity to
educate their employees about ethics on an ongoing basis. They
can become important sources for organizations to learn about
ethical issues and questions that concern their employees. In
addition, they can serve as outlets for employees to report
suspected misconduct, thereby surfacing potential problems early
and limiting damage to organizations. Finally, the option to report
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misconduct anonymously may help to reduce potential acts of
retribution against whistleblowers.
The ways that organizations choose to introduce their advice
lines will depend on their program priorities and justifications.
Organizations with strong values-oriented programs may prefer to
emphasize the advice line as a means for employees to ask
questions and increase their awareness of workplace ethics.
Organizations with strict compliance programs may prefer to
emphasize the advice line’s utility in reporting misconduct anonymously. The decision to handle an advice line internally or to
outsource this function will depend on similar factors. Some
organizations may even decide to combine the two approaches,
answering calls internally during regular business hours and
outsourcing calls at other times.
Finally, organizations may need to clarify the fact that advice
lines are not a substitute for face-to-face dialogue and discussion
about workplace ethics. They are just one of several options for
getting help or reporting misconduct. Organizations that do not
emphasize these points at the outset may face negative reactions
and unexpected difficulties later. For example, instead of a
potential resource, some managers may perceive advice lines as
threats that bypass and thereby compromise their authority on
issues of workplace ethics.
CONCLUSION
In comparing ethics and compliance programs across a range of
organizations and industries, this study suggests that successful
programs are more than the sum of their parts. There are many
ways to develop and structure a program, raise ethical awareness,
train employees, and so forth. But to deliver on program promises
and meet the expectations of leaders and employees, organizations
need to integrate these program parts into everyday business
activities. The challenge is to figure out how to proceed.
Predictably, interviews with ethics officers in this study suggest
that there is no single, most effective model for integration. But this
does not imply that all approaches are equal. Rather, program
success is likely to depend on an awareness of best practices and
an ability to choose those most appropriate for one’s organization.
Understanding context will be critical.
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Adding to the challenge, the meaning of ‘‘effectiveness’’ may
change as organizational priorities shift. It is encouraging to see
that such change is, in some cases, toward more comprehensive
ethics and compliance programs. However, this also suggests that
today’s successes will not ensure future ones. Effective programs
will have to fit their organizations by evolving and changing along
with them.
Ethics officers need to recognize that changing ethics priorities
and definitions of success may have major implications for their
programs. They should expect to challenge their assumptions
about what works, balance competing priorities, and even revise
time-tested program practices and structures. But they won’t be
able to do it alone. For continued success, ethics officers will surely
need the support and guidance of business leaders and employees,
corporate boards, fellow ethics officers, reseachers, and others.
APPENDIX
Design and Method
The intent in this study was to tap the collective knowledge and
expertise of ethics officers on the topic of integration. In-depth
interviews were used to capture details that standard surveys
typically miss. The interview format was particularly effective for
following up and clarifying key points raised by the ethics officers.
Below are the essentials of the study design and method.
•
•
Between September 1998 and March 1999 we conducted 26
structured, in-depth interviews with ethics officers at Fortune
500 companies and with several leading governmental and
nonprofit organizations. The study sample represented a
diverse set of industries including healthcare, telecommunications, aerospace, manufacturing, banking, insurance, and
retail. To gather meaningful data on integration, we selected
organizations with well-established ethics programs. The final selection of study participants was based on convenience.
Two-thirds of the interviews were conducted with members of
the ERC Fellows Program. To ensure a more representative
set of interviews and to reduce the potential for bias in the
JOSHUA JOSEPH
•
•
345
sample, we completed the remaining third of the interviews
with organizations that were not part of the Fellows Program.
While most interviews were conducted by telephone, five were
conducted face-to-face. The interviews averaged one to two
hours in length. With the permission of the interviewees, the
sessions were tape-recorded.
To facilitate more thoughtful and open responses to the
interview questions, participants were sent copies of the
questions prior to the interviews. They were also informed
that their responses in the interviews and their organizational
affiliations would be held in confidence; neither would be
identified in any subsequent reports without their permission.
In conducting this research we did not attempt to define
ethics for our interviewees or to solicit their definitions. Because the study’s emphasis was on the integration process
itself, we focused on how organizations conduct their ethics
work rather than how they define it. Ethics officers were free
to respond to the study questions using the ethics definitions
and frameworks appropriate to their own organizations.
Limitations
The data collected in this study may not represent all organizations
within the for-profit, government, or nonprofit sectors. As noted
previously, this was an exploratory study of how organizations
integrate ethics programs into their work environment. We were
particularly interested in the efforts of large organizations with
well-established programs. As these organizations tend to be
concentrated in the for-profit sector, our sample was drawn
primarily from this sector. Similarly, while we tried to include
organizations from a diverse set of industries,19 the selection of
participants was based on convenience.
Interviewees may have simplified their responses, given socially
desirable answers, or failed to share negative/critical information
about themselves or their organizations. While all interview studies
are subject to these possibilities, we took several precautions to
reduce them. To elicit a full range of responses, we made it clear
that there would be no references either to the respondents or their
organizations in the final report or related articles based on the
study. We also encouraged respondents to share any other
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BUSINESS AND SOCIETY REVIEW
information—even if not specifically covered in the interview
questions—that might help us better understand their ethics
programs.
NOTES
1. In this paper, the term ‘‘ethics officer’’ is used to refer to those who are
responsible for overseeing ethics and compliance programs.
2. For readability, the term ‘‘ethics program’’ will often be used when
referring simultaneously to both ethics and compliance programs.
3. These guidelines apply to organizations convicted of violating federal
criminal law. They allow substantial fine reductions for organizations meeting
specified requirements for effective compliance programs and increased fines
for those failing to meet the requirements.
4. J. Joseph, The ERCs 2000 National Business Ethics Survey (Ethics
Resource Center, 2000).
5. This omission was not intentional. We had difficulty identifying and
securing the participation of emerging-technology companies whose ethics
programs were sufficiently established to make the interview questions
relevant.
6. Recent empirical work suggests that the potential impact of ethics
programs may be greatest during periods of organizational transition.
(J. Joseph, ERCs 2000 National Business Ethics Survey: Volume I, Ethics
Resource Center, 2000).
7. For a thorough discussion of the Federal Sentensing Guidelines for
Organizations see P. Fiorelli, ‘‘Fine Reductions through Effective Ethics
Programs,’’ Albany Law Review 56(2) (1992).
8. A broader focus on ethical values does not mean that organizations are
focusing less on issues of compliance. Compliance goals typically remain
central due to the Guidelines and other regulatory requirements. Rather, a
focus on ethical values adds an important set of organizational goals and
incentives.
9. This was a topic that emerged as important in discussions after about half
of the interviews had already been completed. As a result, not all of the ethics
officers who participated in the study were asked to address this topic.
10. About one in five ethics officers offered each of the suggestions presented
in this section.
11. In fact, few organizations we talked with appeared to deal effectively with
employees who were investigated but ultimately not charged with wrongdoing.
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347
In such cases, ethics officers were often uncomfortable following up with
employees, fearing that they would only make matters worse.
12. Program auditing was sometimes conducted by other organizational
functions when it was not part of an ethics officer’s responsibilities.
13. Please note that the relatively short discussion of leadership in this
article is not intended to minimize its importance in program integration. The
ERC Fellows Program has also funded a separate, in-depth study on ethical
leadership. See L. Trevino, L. Hartman, and M. Brown, ‘‘Moral Person and
Moral Manager: How Executives Develop a Reputation for Ethical Leadership,’’
California Management Review 42(4) (2000).
14. Use of the term ‘‘champion’’ varied across organizations. For example,
some ethics officers considered their CEOs champions for mandating an ethics
program, regardless of their involvement in the actual program. Others used
the term champion to refer to leaders who showed active, ongoing support for
ethics programs through communications and other activities.
15. Ethics officers referred to a variant of this approach as ‘‘cascading’’
training. It typically begins with the CEO training his or her direct reports and
moves down through the organization as each manager in turn trains his or her
own employees.
16. Not all ethics officers who participated in the study chose to address this
topic. Therefore, the perceptions of the training approaches presented here
represent the views of a relatively small number of ethics officers—typically 15
to 20 percent of study participants.
17. Training approaches that can be adapted to local needs can be
particularly useful in cross-cultural settings.
18. These lines are also commonly referred to as ethics hotlines, help lines,
or alert lines.
19. Part I of this article provides industry breakdowns as well as additional
demographic information on the organizations that were included in this study.