COMPLIANCE & ETHICS: STAND YOUR GROUND OR STAND DOWN?

“When restraint and courtesy are added to strength, the latter becomes irresistible.”  --Mahatma Gandhi

Building upon the topic of my last article, I want to explore how you respond when called upon for your compliance or ethics perspective.

On the one hand, as the cliché goes, to him whose only tool is a hammer, every issue is a nail. At some phase of our own careers we may have found ourselves expounding first and asking critical questions later. At the very least we have encountered compliance professionals who may have operated from this viewpoint. As I recall one individual saying to me years ago, “If he didn’t want my honest opinion, then he shouldn’t have come to me for compliance advice!” At this end of the spectrum, every situation that arises, every request that is received, is met with an oft-detailed compliance laundry list that can bog down many a promising business initiative.

At the other end of the spectrum is the laissez-faire attitude toward compliance and ethics. In such an environment the duty of care is subjugated to the operational imperatives of running the business. Time is money. Rules were made to be broken. What they don’t know won’t hurt them. And so forth. Where compliance has become a reactionary repair mechanism and ethics don’t weigh into substantive decision-making, an organization will eventually find itself on a collision course with the U.S. Federal Sentencing Guidelines and other civil and criminal laws. The wise compliance and ethics professional attempts to improve this culture, but if unsuccessful may best be advised to exit amidst a noisy withdrawal.

Between the Compliance Overlord and the Compliance Pushover models described above do we find the middle ground upon which the majority of us practice our profession. As we often must confess, the black-and-white scenarios aren’t the ones we’re generally called in to decide. Management can make those clear-cut calls on their own with ease.

When management encounters the Overlord too frequently, then management will avoid consulting compliance and ethics professionals. A resulting pattern of inconsistent and self-serving decision-making increases in this environment, exposing the organization to decreased morale, employee confusion, and potential litigation.

When management encounters the Pushover too frequently, then management will only seek out compliance and ethics professionals to rubber-stamp otherwise questionable or insubstantial decisions. A resulting pattern of patchwork compliance counsel that largely misses the breadth of business line decision-making spreads in this environment, exposing the organization to rogue players, overly-confident self-assessments, and potential litigation or criminal prosecution.

In short, know when to stand your ground and know when to stand down and let management carry on.

When our organization’s compliance & ethics culture is strong, visible, and active, then management and employees know that they can rely upon us to exercise good judgment in the face of ambiguity. Your good judgment is best understood within and across your organization when exercised judiciously. When you get to know your management colleagues, truly understand their business strategies and objectives, and defer to their expertise when compliance and ethical standards are being substantially met, you will earn that reputation for wise and judicious counsel.

When you weigh in on matters sparingly and appropriately, your organization will prosper ethically in your stead.