Shared values or strong compliance (or both)?

The challenge for oganisations is to make values and compliance work together.

If organisations want ethical employees, they should focus on shared values rather than a long list of what staff can’t do.

Last century, we did not come across many chief compliance officers. In recent years, however, we have seen a significant focus on compliance, with the increased involvement and attention of executives and boards.

The question is, should we focus on shared values or on establishing a strong compliance infrastructure to ensure people do the right thing? The answer is we need both. 

Compliance and an organisation’s values need to be aligned and complementary. We can have policies, a code, an ethics hotline and ethics tests but that does not mean we can be confident that people will identify ethical issues when they arise and make ethical decisions.

If we focus only on compliance, we try to ensure that people only do what is allowed, and that appropriate punishments are dished out if they do not. A values-based approach focuses on self-governance, where people share the values of the organisation and use them in their decisions. 

While most organisations use elements of both approaches, compliance is the most prevalent. This is despite us knowing that a values-based approach is more effective for encouraging ethical behaviour and leads to other organisational positives, such as higher morale, commitment and innovation. 

Professional Development: Professional ethics - a practical guide: Gain an understanding, or refresher, of ethics and what it means in practical terms for day-to-day purposes.

It takes more than rules 

With compliance-focused approaches, we need to be aware that people may seek out ways to circumvent rules if they are illogical, contradict practice or are not enforced consistently. There may even be a perverse incentive to act outside of the rules.

Also, it is impossible to have rules that cover every possible problem and context. In many workplaces we keep adding rules to address the exceptional behaviour of the very few or non-compliance with existing rules. 

Rules that are not enforced impose requirements mostly on those who did not need them in the first place. Inadequate or uneven enforcement throughout the organisation is also likely to be seen as unfair and negatively affect performance and morale.

We must be very careful about what sort of rules we introduce and consider the impact they may have on people’s motivation, performance and ability to excel. 

"... it is impossible to have rules that cover every possible problem and context."

Do we want people to have the ability to respond to their clients’ needs as they arise or do we think it is better they slavishly follow approved responses that hopefully will fit those needs? 

To take this issue to its fundamental ethical base: people have moral responsibility because they have moral agency. Moral agency is based on the premise that a person is self-directed or autonomous. Further, people have dignity and should not be treated only as a means to an end. 

A work environment that is aligned with our personal values and allows us to be self-governing is one that enables us to act as responsible moral agents. Focusing on shared values allows us to grasp the benefits of moral autonomy and responsibility, while at the same time appreciating the need for, and limitations of, compliance-focused rules. 

The challenge is how to balance values and compliance so that people are guided and supported, but not suffocated. 

Read next: Who bears moral responsibility for organisations?

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June 2017
June 2017

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