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The chief ethics and compliance officer (CECO) is a relatively new profession, which becomes more and more trendy nowadays. The position firstly appeared at the end of the twentieth century, in the 1980s or the 1990s, according to different sources (Clark par. 3; Deloitte 2). Presently, almost every large corporation has a particular person (or even the whole team of those), who performs the duties of the CECO and keeps an eye on the company’s ethics and compliance program; still, not all organizations can afford to hire people for such a position.
The primary task of chief ethics and compliance officers is to preserve the reputation of the company they work in. Job responsibilities of these employees are based on compliance programs of particular organizations, as well as their culture, ethics and promoted values. Hence, it is hard to recount every single responsibility the CECO has since those are never the same and vary widely from company to company. Some corporations have chief compliance officers, that is, employees without ethical responsibilities; others hire chief ethics officers, who are not responsible for keeping an eye on the organization’s compliance program (Deloitte 2). However, most commonly, that is something that is between.
Since the position of CECO is relatively new, it is associated with numerous unclear issues. One of the most significant is the place that is reasonable for the chief ethics and compliance officer to take within the organization. Since the CECO is responsible for keeping track of how the organization and its employees work, he or she obviously needs to have power and authority. However, the CECO should not be the part of the Board of Directors since then the workforce will not see this person as one of them and will not trust him or her; thus, it is not the best place to be aware of everything that is going on in the organization (Bednar 4). However, the CECO still should obtain one of the management positions. In that case, he or she can report to the lawyer, the HR manager or the CEO directly.
The first option is not suitable because the company’s lawyer and the CECO have too different responsibilities and goals: the former is responsible for defending the company while the latter is the person who brings bad news to the CEO (Bednar 5). Hence, if the information the CECO gathers passes through the lawyer, it will probably be filtered and the CEO will never see the full picture. Placing the chief ethics and compliance officer under the HR manager is unreasonable since the responsibilities of the CECO have nothing to do with employment issues (Bednar 6). Moreover, in such a case, the importance of the position can also be diminished, and the CECO will not get the authority and power he or she needs to perform the duties. Therefore, the best place for the CECO is the management position, reporting to the CEO directly.
Many large corporations have already hired their ethics and compliance officers. For example, Lockheed Martin, the US aerospace, security, and defense company, not only has such an executive-level position but has also achieved excellence in this field and now proceeds with its ethics supplier mentoring program, teaching others how to do a great job (Lockheed Martin 2). Nevertheless, not all organizations can afford themselves to open such a position. Moreover, not all of them actually need a chief ethics and compliance officer.
As Hannah Clark writes in her article in Forbes, CECOs are able to not only maintain the company’s reputation but also get this company “off the hook” (par. 2). The Federal Sentencing Guidelines have even stated that corporations, which have their own compliance and ethics programs, as well as people who control the adherence to those, will get “preferential treatment” in the case of the prosecutions for white-collar crimes (Clark par. 3).
However, giving all ethics and compliance responsibilities to one person is often fraught with adverse consequences, and there have been many times of CECOs being involved in fraud and scandals. As an example, Hannah Clark tells about the scandal occurred under the watch of Kevin Hunsaker, the chief ethics officer of Hewlett-Packard (par. 1). When Hunsaker found out that the head of Hewlett-Packard’s investigations unit was spying on employees in order to uncover the person who was responsible for the leakage of information to the press, he did nothing about it, even though he definitely had to (Clark par. 9).
With this in mind, that is not necessarily a bad thing that small organizations are not able to hire their CECOs. From my point of view, instead of hiring someone from outside and spending more money, small companies should make some of their current employees responsible for ethical issues and the compliance program; and it will be better if several people are chosen. Those individuals can keep their current positions and work as chief ethics officer half-time. Evidently, all of them should obtain management positions and report to the CEO of the organization directly since only in such a way CECOs can really make a difference.
Works Cited
Bednar, Dick. The Role of the Chief Ethics & Compliance Officer 2007. Web.
Clark, Hannah. Chief Ethics Officers: Who Needs Them? 2006. Web.
Deloitte. The Chief Compliance Officer: The fourth ingredient in a world-class ethics and compliance program 2015. Web.
Lockheed Martin. Ethics2015. Web.
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