|Leadership: Legal and Ethical Behaviour|
Page 1 of 42There are two types of compliance when it comes to behaviour within an organisation: legal and ethical. Legal compliance is about following the law, rules, and regulations, while ethics means doing what is right and behaving with integrity. It is important to note that you can be legally compliant and yet unethical.
In This Report
The DefinitionThere are two types of compliance when it comes to behaviour within an organisation: legal and ethical. Legal compliance is about following the law, rules, and regulations, while ethics means doing what is right and behaving with integrity. It is important to note that you can be legally compliant and yet unethical.
The StageEvery organisation should aspire to be legally and ethically compliant, and not just for moral reasons: research has shown that organisations adopting a high standard of ethical behaviour do better in the long run.
The starting point for an ethical organisation is the board and senior management, who should always act with the objective of protecting the organisation’s reputation and financial integrity. Having ethics as a fundamental value of an organisation elevates the performance of everyone in it. When employees see their leaders acting with integrity and living up to the organisation’s values or code of conduct, there is a sense of alignment and unity. A good business practice, developed with integrity at its heart, also builds the reputation of an organisation with its customers and stakeholders, and contributes significantly to its continued success.
Unfortunately, corruption and bribery are endemic in many businesses around the world, especially in those where there is great pressure to perform. To help avoid this, an organisation needs a robust risk assessment process, one which both identifies risks and prioritises risk management. This means the compliance officer is now more important than ever. Not only is he or she responsible for managing the organisation’s compliance and reputational risk, he or she also has a bigger role in shaping its ethical culture.
Organisations need to ensure their ethical and compliance programmes enable them to achieve their goals. Regular audits, checks, and appropriate controls are necessary to maintain a high standard of legal and ethical behaviour. Ultimately, organisations should try to go beyond a culture of compliance to a culture of trust and integrity. Employees working in a culture of trust choose to be ethical not because they have to be, but because they want to be.
Remember to login here if you are a BPIR member to access all the content within this report. Many articles/links are for BPIR members only. If you are not a member please consider joining to support our monthly publication of best practice reports and have them delivered to your inbox. BPIR membership includes access to all our best practice databases.
Download the pdf version or continue reading this report in html by clicking "Next" below or use the links in the Article Index.
|< Prev||Next >|