2016, the Year of Ethics & Compliance, of Corporate Transparency and Anti-Fraud

Ethics & Compliance Magazine | Year 1, 2016, Issue #1 | Author(s): Cristian Ducu (Centre for Advanced Research in Management and Applied Ethics)

The field of Ethics & Compliance Management has evolved significantly in the last 10 years. In part, because the regulatory systems have been inflated all around the globe as a result of major criminal activities in the economic sector (i.e., fraud, money-laundering, Ponzi schemes, tax evasion, cartels and other unfair competition practices etc.). We all know why SOX exists today, for instance.

But there are also non-judicial reasons. We might include here the watchdog activities of international and local NGOs and society at large through democratization of access to communication means (particularly via social media). Who would have known about and, consequently, acted upon the use of child labour in cotton fields from Uzbekistan? Or the use of conflict minerals by technology manufacturers?

We might also count here the strong push from a growing community of Corporate Governance, Governance-Risk-Compliance (GRC), Anti-Fraud, Ethics & Compliance, Business Ethics, Social Responsibility (CSR)/Sustainability professionals. And this is particularly interesting since it led to a slight change in what we now call “Corporate Responsibility & Accountability” in organisational (not only corporate) transparency, which, in turn, was translated into regulatory measures (seeEuropean Union’s Directive 2014/95/UE, introducing mandatory non-financial reporting for large enterprises and groups, or the General Data Protection Regulation, creating a new position in the Compliance section, i.e., Data Protection Officer) or industry initiatives (e.g., business codes of conduct for specific industries: Global Principles of Business Ethics for the Aerospace and Defence Industry, the family of codes existing under the leadership of European Federation of Pharmaceutical Industries and Associations etc.).

If we try a wide-angle perspective over this complex landscape, where organisational governance blends with risk management, prevention and countering of illegal and immoral behaviour, audit and reporting (both financial and non-financial), human rights, environmental protection etc., we will discover that 2016 may be the year when we can make a significant change in terms of professional development and openness. What I mean by this, first and foremost, is that the unstructured manner in which the field of Ethics & Compliance has developed thus far has left the professionals, in many cases, with an insignificant or less important role within the organisational framework. Many agree that there is a major need for ethical leadership, in all types of organisations, from private to public sector and from academic to non-profit sector, but they continue to assign minor roles to Ethics & Compliance Officers, to place them at lower levels, in HR or Legal Departments, in reclusive Compliance Units etc. A report by the Ethics Resource Center from 2007 recommended that “the Chief Ethics & Compliance Officer should be a senior member of the management team, present when difficult and complex conversations are being held.”[1] Or, to quote a news release, “Ethics & Compliance Officers need a seat at the executive and board tables”,[2] not just to be called upon when crisis sets in.

In 2016, it is expected to observe a stronger voice from the Ethics & Compliance Initiative (ECI), promoting its message across the U.S. and Western Europe. But we will also hear the voice of a new professional organisation: the European Ethics & Compliance Forum, which will promote a Europeanprofessional ethos.

In 2016, it is expected to witness an exponential increase in public events on corporate transparency, anti-fraud, ethics & compliance; from conferences dedicated to problematic industries, like Pharma, for instance (e.g., 10th International Pharmaceutical Compliance Congress (Warsaw; May 10-12, 2016) or The 17thPharmaceutical compliance Congress and Best Practices Forum(Washington, DC; October 19-21, 2016)) to more general ones: 1st European Ethics & Compliance Forum(Bucharest; November 10-11, 2016). This is not merely an opportunity to become more visible, but is it an opportunity to share expertise and best practices, to genuinely learn from each other and stop chasing meaningless certifications to put on our business cards.

In 2016, we will definitely have a stronger debate on a common European anti-bribery directive. After the UK, Germany and Romania, just to name a few, Spain adopted, in 2015, its own version of anti-bribery regulation (included in the new Penal Code). Other EU member states are expected to make similar moves: either adopting independent documents (like the UK Anti-Bribery Act) or introducing specific regulations in a larger legal framework.

Second, the Ethics & Compliance professionals need to be more open to interdisciplinarity and leave behind the idea of focusing on conformity with the law. They need to be better equipped to assess the ethical aspects of organisational life, meaning to learn more about Ethics and Moral Psychology, about Organisational Psychology, Ethical Audit and Moral Leadership.

In other words, 2016 might be the moment for consolidating the field of Ethics and Compliance.


[1] Ethics Resource Center, Leading Corporate Integrity: Definining the Role of the Chief Ethics & Compliance Officer (CECO); Washington, DC, 2007, p. 19.
[2] Ethics & Compliance Officers Need a Seat at the Executive and Board Tables: Conference Board; News Releases 07-37, The Conference Board of Canada, 2006. Url: http://www.conferenceboard.ca/press/2006/ethics.asp, last access: 2008-01-18.

Ethics & Compliance Magazine, 2016, issue no. 1

Ethics & Compliance Magazine, 2016, issue no. 1

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