Just about any CEO will say that their business has a strong commitment to operating with integrity. While the commitment to being ethical may be true, it is often the practice of enforcing an ethical code of conduct that becomes the issue. The board and the top tier of management may put guidelines or policies in place to ensure that the workforce is staying on the ethical path, but all of the guidelines in the world won’t matter if no one inside the organization is enforcing them. This is where the integrity officer comes in (sometimes this role is called a compliance officer.)
When Ethics are Allowed to Relax, Scandals Happen
In 2015, the automobile industry was rocked with a scandal of huge proportions. The German car manufacturer Volkswagen was charged with violating the Clean Air Act by the United States Environmental Protection Agency. The car company had programmed software inside the TDI (turbocharged direct injection) diesel engine models to trick the emissions testing devices. The engines would appear to be running cleaner than they actually were.
The scandal cost the company billions of dollars and the loss of their reputation. Plus, even years later, Volkswagen is still facing criticism from investors who think the company is not making strides to repair their image fast enough. This sentiment is seconded by Volkswagen’s Head of Integrity, Hiltrud Werner.
Head of Integrity is a Real Job Title
While many businesses have effective compliance training programs, capable compliance officers or compliance committees, the title “Head of Integrity” may be a new one that has to be added to the vocabulary. There are plenty of job titles in the corporate world which bring to mind vague tasks or ideals, although most people wouldn’t be able to actually describe what the role would entail. Titles like Chief Happiness Officer, Growth Hacker, Chief Catalyst, and maybe even Head of Integrity may make the list.
Ethics and integrity are being bandied about a lot these days, and a quick internet search will pull up hundreds of job listings for integrity officers (although, head of integrity may be a little tougher to find.) Sometimes the ethic or integrity officer role is combined with other roles in the legal department or other compliance departments. Yet, there is no denying, after all of the recent scandals such as Enron and Volkswagen, integrity and ethics are becoming hot button topics leading to more and more job openings. (The Enron scandal took place in 2001, and it led to the chiefs being convicted of fraud, conspiracy, bank fraud, and insider trading charges.)
The backlash from the scandals has led to more and more organizations appointing integrity officers and creating ethics departments. Government offices, charities, and international corporations have all jumped on the trend. One prime example: After a scandal in 2016, where the bank Wells Fargo was found to have been opening fake accounts, they set up an entire ethics office to help with the fiasco.
Business experts think this trend is a positive one.
They agree that having a person or department responsible for looking after the corporate culture can be a boon. Plus, creating an ethics committee or having a head of integrity also helps businesses demonstrate their commitment with compliance to the anti-corruption laws. There have been a few rather strident laws put in place in the wake of all of these corporate scandals. The laws require organizations to actively work towards preventing bribery, money laundering, or other dishonest behavior.
While being compliant with these laws is definitely beneficial to the corporations, having an integrity officer can be beneficial in other ways as well.
The Need for the Integrity Officer
According to an associate professor of business ethics, Antonino Vaccaro, there is more to the problem than lack of anti-corruption laws, he said,
“I have done more than 50 criminal cases as an investigator. Every time, the problem is not compliance, it is organizational values. If you have an organization that is healthy and a bad apple arrives, he or she is recognized, re-educated or expelled.”
Who would be responsible for recognizing and re-educating these bad apples? The job would likely fall to the integrity officer. However, a company can’t just simply tack that title on to a random employee and expect there to be a real change according to an ethics and compliance consultant.
Richard Bistrong warns businesses against that approach,
“Splitting the function out isn’t the true measure. It’s the resources they are being given and they are seated at the table when business decisions are being discussed and planned.”
Business leaders have to include the integrity officer or the integrity team in the discussions and the decisions that are being made. The top tier of the company has to reinforce the ethical standards, otherwise, the lower team members will notice and emulate the bad behaviors. Bistrong weighs in on this need,
“We tend to listen more to the people who set our performance goals.”
He has first-hand knowledge of the consequences of working without a strong sense of integrity as he served 15 months for being guilty of an overseas bribery conspiracy. Since finishing his jail sentence, he has started consulting about the need for ethics and integrity.
The Head of Integrity at Volkswagen has been in a position for over a year. Werner oversees 500 employees, and she “helps to raise the voice of integrity in every decision that is made,” so says a VW spokesman named Andreas Meurer.
“This is a process that has to be steered and will not happen just by chance.”
Integrity and Ethics
Having a strong ethics team and an effective integrity officer can help drive the culture of honesty and integrity within an organization, but it is imperative that the CEO and upper level of management also exude the same air of integrity. Another thing to remember is the fact that having an ethics team does not absolve management or the board from responsibility when unethical behavior is found to have taken place.
An integrity officer is only as strong as the management team that backs him or her up, and we can help you build a strong team. Click here to learn more about our innovative integrity-based training program.