September 5, 2008

Chief Ethics Officer – can we take the post seriously?

Filed under: Organisation design — Nicola Rowe @ 8:39 am

In the wake of its contracting scandals, Boeing hired one. HP had one all along, but that didn’t stop chairwoman Patricia Dunn from spying on her fellow board members. Can we take the post of chief ethics officer seriously?

Having a vice-president for ethics helps a corporation to avoid the appearance of impropriety and be seen to be doing the right thing. That’s not just a nice-to-have: Forbes magazine points out that federal sentencing guidelines provide for preferential treatment in white-collar crime prosecutions if companies have “effective compliance and ethics programmes” in place.

What does it say about a company that it needs to appoint a head of ethics? Some worry that creating the post signals to the world at large that the company has ethical problems to address. Others argue that creating a special post for ethics is unnecessary, since ethics is everyone’s business: in this view, ethics should be part of the DNA of the organisation, lived by everyone from the CEO on down to the newest shop-floor assistant. 

Yet a chief ethics officer can be an appropriate point-person for a variety of reasons. While a would-be whistleblower who sees a company breaching the law can go to the chief legal officer, it’s not so clear where he or she should turn to air conduct that seems dubious, but might not breach the law.  Chief ethics officers can raise their voices in the C-suite to highlight technically correct conduct that’s inconsistent with the company’s vision and values. And, for those who tend to be cynical about company values statements, the appointment of a C-level ethics officer is a powerful statement from on high that the company takes its values seriously. 


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