Otherwise, LegalEDHEC

Written on 24 November 2017
By Geert Demuijnck, Head of Faculty and Professor of Business Ethics, LegalEDHEC, EDHEC Business School
Marie-Agnès Vieitez, Compliance Director of Global Automotive Parts Manufacturer Faurecia
This article can also be read in the latest issue of OTHERWISE #5, the EDHEC Business Magazine
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Right or wrong, legal or illegal: Is it that simple? In a world where the actions and policies of companies are increasingly under microscopic scrutiny, the role of Ethics & Compliance Officer has stepped into the limelight. 

It’s a relatively new job description, one that aims to deal with a company’s responsibilities and liabilities. To get some real‑world perspective on the subject, we spoke with Marie-Agnès Vieitez, Compliance Director of global automotive parts manufacturer Faurecia, about some of the issues and challenges. She argues that this “new” profession is not so much a response to a new reality, as the reflection of a new awareness. “We are just seeing the drawbacks of organizations working in silos; where the legal department only talks to legal, the finance department to finance, quality assurance to quality people, and so on. The function of an Ethics & Compliance Officer is to bring transversality to the organization, to make sure people do the right thing.”

It’s a point we hear underscored by Geert Demuijnck, EDHEC Head of Faculty & Professor of Business Ethics: “Twenty years ago, no company had an ethics officer. The fact that they exist suggests a change in mentality.” As Marie-Agnès Vieitez explains, the basic driver is that organizations need to abide by the law. “And at government level, the state is getting better at enforcing the laws it passes.” Going a step further to satisfy stakeholders, they have internal rules. Companies today typically seek ways to improve how employees respect such rules. 

New expectations

Perhaps the greatest impact on corporate conscience today, according to Marie‑Agnès Vieitez, is “the new level of expectation coming from civil society and humanity as a whole.” With easier access to knowledge of issues such as corruption or child labor, for example, you now have people in the street voicing their protest. That kind of pressure from the community does not go unnoticed, and is picked up in relay by the media. This most modern of phenomena has the particular effect of creating multipronged pressure points, attracting attention from multiple groups of stakeholders. Organizations have learned, or are learning fast, to play by the rules. “These days,” says Marie‑Agnès Vieitez, “a company has a code of ethics to demonstrate what it believes in, and a dedicated department to make sure people understand and follow that code.” In her opinion, there is not much room for gray areas if the company means what it says in its code of ethics. “At the end of the day, it is ethical or not ethical, legal or not legal. When the company has already defined where it stands ethically, you should have the answer in your code of ethics.” Occasionally a dilemma arises if a new situation comes up. In such cases, a solution can always be found starting with guidance from the law and internal policies.

 “If people understand the purpose of your ethics and compliance policy, you can build trust in the organization, and help them to feel they can speak up.”

“Whose side are you on?”

“There are two fundamental challenges in this role,” declares Marie‑Agnès Vieitez: “To be seen to be independent from the management, and to be trusted by employees.” On the subject of independence, she sees that, for a lot of companies, that is where gray zones often emerge. “A classic question to test independence would be, what kind of entertainment can the CEO give or accept? That kind of question should be reported to an audit committee, rather than to the CEO direct.” The audit committee is a higher authority, above the CEO. Such a mechanism safeguards against an unsupervised “king” doing whatever he or she pleases in their “kingdom.” On the subject of earning employee trust, Marie‑Agnès reveals her secret formula: “If people understand the purpose of your ethics and compliance policy, you can build trust in the organization, and help them to feel they can speak up.” She feels it is vitally important to react to every concern raised by every employee, especially for very small issues. This approach encourages people to feel their word will be taken seriously.

EU vs US

Despite globalization, Marie‑Agnès maintains that there is a noticeable difference between European and American toward. “In the States, the culture leans towards compliance with a carrot and stick approach. European companies tend to start from an ethical standpoint, forming their corporate narrative on the journey and purpose.” However, as both aspects are vitally important, US companies are now building more ethics into their compliance programs, and Europeans are beefing up compliance in their ethics programs. Concludes Marie‑Agnès: “The gap is getting smaller, and it’s a good thing".