In today's corporate climate of scandals, regulations and low public opinion, maintaining customer trust and a positive corporate image can be difficult. One way for a company to navigate these troubled waters is to recruit an ethics officer.
Ethics officers can integrate a company's business objectives, culture and compliance initiatives, as well as report on a wide range of regulatory and ethical matters. They can make sure business practices match company vision, as well as sharpen and articulate corporate values and messages. During the past few years, more and more companies have seen the value of having an ethics officer in the organization. The Belmont, Mass.-based Ethics Officer Association reports that in 2001 its membership was around 600. This year, its membership has grown to more than 1,200.
Here are some specific reasons why enterprises should consider having an ethics officer:
To provide assistance with meeting regulatory compliance: An ethics officer can work with the company's top brass to make sure that they are compliant with legislation such as the Sarbanes-Oxley Act (SOX). A survey of business executives by New York-based PricewaterhouseCoopers LLP indicates that SOX accounts for 54% of total compliance spending, which added up to more than $6 billion in 2005. An ethics officer can develop and implement ethics training programs for the company as well as monitor their effectiveness so top management can measure the results.
To improve the company's reputation and public perception: In the last few years, some companies' reputations have been tarnished by scandals and other misdeeds. To help bring them out of the muck, some companies such as MCI have hired an ethics officer to rebuild their reputation with employees, regulators and the general public. Fortunately for MCI, after much hard work it was able to turn the corner and has been re-listed on Nasdaq. However, proactively hiring an ethics officer before there is trouble will help mitigate problems from occurring in the first place.
To provide a mechanism for reporting issues: The United States Sentencing Commission and the Federal Sentencing Guidelines recommend companies have nonretaliatory systems in place for reporting misconduct. Creating and implementing an infrastructure for reporting and managing ethical issues and inquires is something for which an ethics officer is responsible. These systems could include e-mail addresses, anonymous phone and fax numbers, and Web contact pages.
A quality ethics officer will be able to thoroughly and discreetly investigate claims of unethical and improper behavior when they are reported. If employees feel as though they can safely report an issue that will be taken seriously, then they probably will. This will not only improve morale but could be cost effective as well. This is especially true if employees are reporting abuse of resources, which can cost the company money. Furthermore, internal reporting of intentional or unintentional exposure or release of customer information could help head off a potential lawsuit.
An ethics officer can establish an ethical corporate climate at an organization and back it with specific polices and guidelines that should strengthen the company. This is especially important today, as an ethical breakdown in a company could potentially have serious consequences at all levels of the organization.
Joe Malec is a security analyst at St. Louis-based Enterprise Rent-A-Car Co., specializing in compliance and application security. He is also the president of the St. Louis chapter of the Information Systems Security Association and serves on the ISSA International Ethics Committee.