Corporate Compasses: The Increasingly Important Corporate Ethics Function Doesn't Have to Be a Challenge to HR's Role in Upholding Ethical Business Behavior

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After telecommunications giant WorldCom Inc. went bankrupt two years ago following disclosures of senior executives' $11 billion worth of accounting fraud, new management had a lot of cleaning up to do.

Among the many steps it has taken to rebuild itself, the company, based in Ashburn, Va., settled with creditors, negotiated a $2.25 billion civil penalty with the Securities and Exchange Commission, set out to reassure customers and vendors, and changed the company's brand to MCI. The company also decided to alter a corporate culture that had enabled unethical business practices to prevail at some levels of the company.

Meet Nancy Higgins. A veteran chief ethics officer--she had served in that role at Lockheed Martin Corp. and at the Boeing Co.--Higgins joined MCI Corp. in October 2003 as executive vice president of ethics and business conduct.

Higgins' mandate, new to the company, included ensuring MCI's compliance with new financial accountability standards in the Sarbanes-Oxley Act of 2002, making the corporate culture more transparent and expanding the company's ethics function.

"In my position," says Higgins, "you have to understand what the company's values are going to be and set them out there so that everyone knows these are the things that are going to guide our behavior--and that if they're asked to do something that doesn't comport, to let us know."

Higgins recruited senior executives from within and outside MCI to join her, began touring MCI facilities to broadcast her concerns to the rank and file, and initiated an upgrade of corporate ethics education that will include new in-person and online elements for all employees. Higgins sits in on all senior staff meetings and joins CEO Michael Capellas, who recruited her, in making reports directly to MCI's board.

The Job Description

The type of role that Higgins has taken on at MCI is not just one company's antidote for its past scandals. The position of ethics officer is one that more and more companies are creating and filling. The Ethics Officer Association, a Waltham, Mass.-based organization for managers of "ethics, …