SHOULD EVERY LISTED COMPANY HAVE AN ETHICS OFFICER?

ANAND GDEVANAND H

JAYANANDHA BHARATHIKIRTHIKA C

MILTON RAJA SELVAM E

LISTED COMPANY• For a company to be listed it should adhere to rules

and regulations framed under foregoing statutes• Listed companies drive the stock exchange• Any unethical practices if identified in listed

companies affect the performance of that company (Ex: Volkswagen defeat device)

GSK SCANDAL• GSK was fined $500 Million for bribing hospitals in

China.• Company can show that it has a robust corporate

compliance policy, a CEO who preaches about the importance of clean practices in places like China and high-level executives and board members who even travel to hot spots to check on compliance efforts, it’s less likely that employees and managers will commit fraud or get involved in a bribery scheme. If a company makes security a top priority, then at least in theory, it can catch hackers before they do irreparable damage.

ROLE OF ETHICS OFFICERS• Integrating a company's business objectives, Culture and

compliance initiatives.• Report on a wide range of regulatory and ethical matters.• They can make sure business practices match company

vision.• Sharpen and articulate corporate values and messages.

• Help employees at all levels of the organization to make correct decisions in difficult situations• Can be helpful to some who may not have had

ethics education or at previous employers. • Example: This is especially true for IT security

personnel because of their access to sensitive information as well as the responsibility to protect it.

ROLE OF ETHICS OFFICERS

QUALITIES OF AN ETHICS OFFICER• Passion for the role and commitment to the culture• Strategic vision and a holistic approach• Business partnering• A keen eye for cost• Continuous improvement and stellar organization

QUALITIES OF AN ETHICS OFFICER• Avoid the head office plague• Understand risk• Tone at the top• Walking the talk• Excellent marketing skills

REASONS TO RECRUIT AN ETHICS OFFICER• For integrating business objectives, culture and

compliance initiatives on a wide range of regulatory and ethical matters

Factors that we need to recruit ethics officer • To improve the company's reputation and public

perception• To provide a mechanism for reporting issues• Strategic vision and a holistic approach

UNETHICAL PRACTICES• TOYOTA (2010-safety concerns,$124 million, man

hours-50,000)• Halliburton (business practices with countries that

are prohibited for trade by US)• Wal-Mart's business practices (predatory pricing)• Chevron (dumping billions of gallons of toxic waste

into the South American rainforest)

CONCLUSION• Many companies have embraced the importance of ethics as an

important function.• A company’s managers play an important role in establishing its

ethical tone.• Ethics officers are responsible for setting standards for what is and

is not acceptable employee behaviour.• The rise of Ethics Officers, whether combined with compliance or

not, is the most significant trend we see today in compliance.

CONCLUSION• The ethical culture has to extend through every

layer of a company, including the behaviour of sales personnel who are on the frontlines of every business.  • An Ethics Officer has an important function in

every company – they have to ask the question of whether a company “should” act in a certain way, as opposed to whether the company “can” act in a certain way.