You hear the words "ethics" and "compliance" being used a lot in terms of businesses and whether they are doing the right thing. Many would lump the two terms together as if they mean the same thing. They may both have a mission to accomplish a similar goal, but they are not the same. This blog will serve to differentiate ethics from compliance, explain the importance of ethics in the workplace and, show how to create a culture of ethics and compliance.
The Difference Between Ethics and Compliance
It is fair to say that the two terms are related, but some distinctions between them are essential to know. The Oxford dictionary defines the term ethics as moral principles that govern a person's actions; it can also be described as a code of conduct/standards that steer decisions and activities based on duties stemmed from core values. Compliance is defined as conforming or adapting one's actions to another's rules. They are done not because you may think it falls into your moral beliefs, but because those actions fall within the law or within a framework or standard that you are looking to follow.
Sometimes these two terms might work together, and laws follow your morals. Take, for example, the matter of stealing, do people refrain from stealing because they know it is against the law and they risk getting caught or, do they not steal because, in their hearts, they know it is wrong to take something that is not theirs?
Why is ethics important in corporate culture?
You may be thinking when it comes to the corporate workforce, compliance is the only thing that matters, but that is not all true. Having bad ethics equates to having a bad corporate culture. Listed below are some of the ways having good ethics can help corporate culture.
- Misconduct declines. Having a code of conduct that goes over expectations of fair treatment and ethical behavior gives employees standards that they can use to act professionally. These codes often surpass the requirements of the law and build transparency, accountability, respect, and trust.
- Boost morale. Employees want to feel safe and work for a boss and with coworkers who are honest, honorable, and think that they can trust. Like anyone else, employees want to feel respected, valued, safe, secure, and encouraged. Facilitating an ethical compliance culture strengthens all these elements of a positive environment, improving employee morale.
- Increases productivity. Following ethical practices in a corporate environment enhances office managers' performance, especially when the code goes along with employees' values.
How to create a culture of ethics and compliance?
- Put policies in writing. You will need a detailed manual of the procedures and a code of conduct. Employees should know that they can look to a written reference to understand their expectations fully. Employees should attest to receiving and reading the code of conduct on an annual basis.
- Appoint a compliance officer. Having a person overseeing the compliance and ethics initiative makes the process run smoothly. Having a corporate compliance officer instills power in that role, and that person serves as a leader of corporate integrity, accountability, and ethics.
- Hold employees accountable. To keep employees accountable, you need to define the company's mission, goals, and values. Keeping employees accountable with these codes will build a proactive space at all levels; accountability builds trust, improves morale, increases performance, boost compliance, and strengthens corporate culture. When employees are accountable to the same values from the top down, it enforces the validity of these values and employees can look to their management as role models. Actions speak louder than words, so employees should be able to see that their management lives and acts by the same mission, goals and values that employees do.
- Have clear and consistent communication. Whether through group meetings, mass emails, or phone conferences, it is crucial to communicate your ethics and compliance policies to employees, so they understand how these policies impact them.
- Implement ethics training. Even with a written code, training is still a necessary step. Being hands-on with employees can show how ethics and compliance can be applied in day to day activities, creating a valuable real-world connection. Ethics training often involves giving employees the tools to make the right ethical decisions. What are the lenses through which employees should make decisions to stay within the ethical realm? It is important to include case studies in this training so that employees can learn to determine the ethical way of making decisions, by checking if the action they are taking is right according to rules, if it meets a good goal, and if the decision is fitting or appropriate for the situation concerned.
Creating an excellent corporate culture is a crucial element in improving the way your employees work and how your business runs. Ethics and compliance should be taken seriously and should be motivated by you wanting to create a positive culture and not just about covering your bases or reducing liability. Your code should reflect your vision, mission, and values for your company to create permanent change.