Who Owns Business Ethics Training and Code of Conduct: The Divide Between HR & Ethics and Compliance


The title of this blog caught my eye; I just finished reading it and knew you’d enjoy it. “Ethics and the HR department – a Happy Marriage?” by Polly Foley, senior researcher at the Institute of Business Ethics, is about of course, culture, one of our favorite topics. Polly’s point is that the Ethics function and the HR function should work together effectively to avoid challenges when embedding ethical values into a company’s culture.

I don’t believe it’s solely the responsibility of those two business functions to embed ethical values into the culture; I think it’s the responsibility of all leaders in the company. Perhaps the fact that when we think of ethics, culture and values we only think of HR and compliance, rather than the entire company, is indicative of a problem. However, the point of the article was that these two functions should collaborate, and I’m all for collaboration, particularly when it comes to improving ethical cultures.

According to the article, The Institute of Business Ethics defines “business ethics” as the application of ethical values, such as fairness, honesty, openness, integrity, to business behavior. Business ethics applies to all aspects of business conduct, from boardroom strategies, sales techniques and accounting practices to stakeholder relations and issues of product responsibility, which is why all employees should take comprehensive business ethics training.

If you’re going to run an ethical business, one where the people who work for it apply ethical principles to their decision-making every day, you must establish high standards. But – and we’ve been preaching this for a while – it’s not enough to establish standards, high or otherwise. Employees must be trained on them. It’s refreshing to see Polly agree with our stance that to actively build and support an ethical culture requires business ethics training, policies, a Code of Conduct and awareness programs.

Building an ethical culture is not a “once and done” exercise; it’s an ongoing effort that requires nurturing. Share on Twitter

I also found this article interesting as a marketer. Because we sell ethics and compliance software and services to a very large market, our buyers are sometimes different. In the mid to larger end of our market we typically sell to ethics and compliance professionals but in the smaller end of the market our buyer is often HR. So I found it fascinating that while professionals from both functions agree that more collaboration between departments is necessary, there are real challenges to working together.

Polly noted that while a Conference Board survey of ethics and compliance and HR professionals found 77% of respondents ‘would like to see a more collaborative approach between the two functions than their company is currently taking,’ it’s not uncommon for tensions and perceived lack of co-operation to exist between the two functions. These tensions include a lack of respect and stepping on each other’s toes.

So how can these tensions be remedied; what’s the best way for these functions to work together?

Well there are some guidelines that can help keep a tug-of-war from happening. Below is a chart that outlines the issues typically handled by each department.

Ethics & Compliance Issues vs. Human Resources Issues

Ethics & Compliance

Human Resources

Conflicts of Interest


Financial Fraud


Bribery, Corruption & Gifts

Wrongful Termination & Discipline

Falsifying Documents

Abuse & Intimidation

Accounting & Auditing Issues

Internet or E-mail Abuse

Confidential Information

Workplace Conduct

Violation of Laws or Regulations


Misappropriation of Assets

Drugs & Alcohol

Environmental, Health & Safety




Beyond specific issues, however, certainly HR can help monitor how effectively ethical messages and values are being received by employees, through employee surveys and exit interviews. The groups can work together to develop a rewards system for ethical behavior – these are becoming more common – such as ethics ‘awards’ or employee incentives to encourage and reward employees who demonstrate ethical behavior.

Typically ethics and compliance will be responsible for creating or refreshing the company’s Code of Conduct and ensuring that all employees receive business ethics training. Again, it’s often ethics and compliance that will purchase compliance software to assist in creating and distributing policies and managing investigations. Why can’t these be collaborative efforts with HR? HR can offer great credibility and assistance to the ethics and compliance department when incidents happen and need to be investigated.

But, like with almost any situation, if there is tension, it can probably be resolved with open communication.

The two functions working together can certainly lead the way in creating and maintaining a company’s ethical culture, but that should be something that all leaders do, and all employees help enforce. Today, an ethical culture is more than a compliance and HR asset; it’s a brand asset, it’s a recruiting asset… it’s really every leaders’ job to ensure it’s a priority.

Today, an ethical culture is more than a compliance and HR asset; it’s a brand asset. Share on Twitter

Do you feel all leaders “own” the ethical culture in your organization? Do you notice any tension between your HR and ethics and compliance departments? Who rolls out your business ethics training?

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