The E&C Pulse - March 26, 2019

March 26, 2019 LRN Corporation

Turning Competition Between Ethics, Compliance and HR to Teamwork

profile_pics_5It’s not always an easy relationship between the functions of ethics and compliance and human resources, even though both play significant roles in setting and maintaining a company's culture.

Despite their shared goals of wanting loyal and engaged employees who through their work espouse the organization’s values, shine a light on potential problems and serve as an example for coworkers, there can be tension between compliance and HR on matters of turf, data and oversight.

I moderated at the Ethisphere Institute’s Global Ethics Summit earlier this month a panel that featured three ethics and compliance executives who shared strategies for how they forged relationships with HR and found ways to work together and create successes for all sides.

Katie Lawler, senior vice president and global chief ethics officer for U.S. Bank, previously worked in the bank’s human resources department, where she managed the ethics program until 2016 when she joined the law division as a deputy general counsel. In 2017, when the ethics program was elevated to a standalone function, Katie was tapped to lead it.

Even though she came from HR, Lawler said transitioning the function was still challenging. Because HR historically owned all things related to employees, she said it was difficult to figure out where one function’s responsibilities ended and the other’s began.

“We’ve focused on building the relationships and showing the connection with all of the various HR touchpoints to the ethical culture of the organization,” said Lawler. "So that HR partnership is vital.”

Lisa Beth Lentini, who has worked in top compliance roles at business support services company Deluxe Corp., and at business travel services firm Carlson Wagonlit, said part of forging the collaborative atmosphere necessary for success is learning the language of the hearts and minds of the people with whom you are working.

“We all come in from different vantage points and we all bring our own language,” she said, adding it’s vital to pull together language and craft an approach that appeals to and is meaningful to multiple constituencies.

“Being able to sell what you do as an ethics officer or compliance officer is very important to get buy-in,” said Lentini.

Laurie Gallagher, chief compliance and litigation counsel at Saudi Arabia-based petrochemical manufacturer SABIC, said the company expanded worldwide through a series of acquisitions, so there was no global HR or compliance function in place.

“We spent a lot of time to create those definitions of what was in the realm of HR, what is in the realm of compliance,” she said. The key point is to really integrate because employees "don’t want to see a bright line" between compliance and HR.

“We’ve got to make sure that the employees are feeling like they’ve had the engagement from both of the teams, and issues are resolved so they don’t get turned off coming to compliance or coming to HR when they see something that is potentially corrosive,” said Gallagher.

To that end, Gallagher helped to ensure compliance and ethics were well integrated in developing what the company calls its Leadership Way program, which sets standards of leadership behaviors across all skill sets to unify messaging throughout the company.

The challenge is not just telling employees what they can’t do but setting expectations for what is good behavior, she said.

“Rather than segmenting expectations, we’re coming with one unified face of employee behavioral expectations, and helping the HR team to address those issues is part of that,” said Gallagher.

Giving everybody a win

What started out as a potential conflict between the ethics and HR teams at U.S. Bank turned out to be a huge success for both teams. The bank updates its code of conduct training every two years, and Lawler initially was dissatisfied with what the HR-managed enterprise education team proposed.

She told them of her desire for something different and, instead of getting pushback, she heard from the team it wanted to do something bold and innovative, but couldn’t find partners. Lawler offered her unit up as a guinea pig, the collaboration produced a new training that was extremely well-received and won the education team some awards and recognition. And, because of that success, they already approached Lawler with ideas for the next update.

“Having freed them up, they see us as the partner they want to work with, which is just the greatest win,” said Lawler.

When Lentini started at Deluxe, ethics was managed by the employment lawyer and the code was a three-page document. One of the first things she did was bring together people from various functions she considered allies because they had “a spark in them, a little passion around doing the right thing.” Many came from HR.

Over months this group developed a code that was in line with the company's brand and its values, and was one that incorporated concepts expected in a code of business ethics.

“Since HR and quite a few other functions were so intimately involved in the creation of this new version of the code, they saw themselves as being stewards of it,” said Lentini. That buy-in led to other collaborations, including working with the brand people and the HR people to to start a regular cadence of communication.

“It’s allowed us to amplify the voice of compliance and ethics, and to amplify the voices of those other help make the message stronger,” she said.


Ben DiPietro



LRN's 2019 Ethics and Compliance Program Effectiveness Report found 38% of respondents said their organization's leaders support taking disciplinary action against top performers who take part in misconduct, while 49% said employees where they work are comfortable in jumping levels to bring attention to ethical issues.




Michael Avenatti, the attorney who represented Stormy Daniels in her lawsuit against U.S. President Donald Trump, was charged with allegedly trying to extort Nike for millions of dollars, Associated Press reports. He says he will be exonerated.

More and more, companies are tracking employees in the workplace, and not many workers seem to care, Fast Company reports.

The disparity in pay between high-income earners and the rest of the U.S. might be worse than many realize, Yahoo Finance reports. 

The reactions of three U.S. airlines following the accident involving Boeing's 737 MAX engine says a lot about the companies, Inc. reports.

Companies that offer digital health services through apps and other technology are grappling with what to do when a patient confesses suicidal thoughts or behaviors, Stat reports.

Use of artificial intelligence is cutting expense account fraud--estimated at around $7 billion annually--in half, Reuters reports.

A disciplinary board recommends public censure of Penn State University's former general counsel for ethical violations related to the Jerry Sandusky sexual assault cases, Corporate Counsel reports.

Metair Chairman Brand Pretorius says corruption scandals in South Africa are eroding trust in government and business, and says better governance and greater transparency are needed, Business Day reports.



Last chance to reserve your spot for tomorrow's webcast featuring LRN's Susan Divers, Collin Lowney of AECOM and Joseph Suich of GE Power. Learn from two practitioners as they discuss systems in use, insights gained and actions taken through this type of data analytics.



#ICYMI: “Only a human being can do the next right thing.” LRN chairman and CEO Dov Seidman stresses the importance of moral leadership in the age of AI and notes the future of work on distinctly human traits in this recent blog post.



About the Author

By combining values-based education, rich insights, and expert advisory services into innovative, comprehensive solutions, LRN can help elevate behavior and the bottom line for your company.

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