Academic journal article Journal of Applied Management and Entrepreneurship

Implementing Ethics in a Corporate Environment: A Conversation with Steve L. Scheck

Academic journal article Journal of Applied Management and Entrepreneurship

Implementing Ethics in a Corporate Environment: A Conversation with Steve L. Scheck

Article excerpt

Executive Summary

There has been an ongoing discussion regarding the proper placement of the ethics office in the corporate structure. Often the ethics officer is a designated staff position: part of the HR component, located in a separate Ethics Office, or a member of the legal department. All of these configurations have the ethics serving in a staff rather than line position and operating in an advisory capacity.

ConocoPhillips decided to place the office in the audit and finance area. This placement locates the ethics function squarely in an operating division of the firm whose purview extends into all other areas of the corporation. We had the opportunity to talk with Steve L. Scheck, General Auditor and Chief Ethics Officer for ConocoPhillips regarding the processes for implementing ethics and compliance. Scheck describes how the Conoco President's Awards based on core values have carried over into ConocoPhillips. He discusses the firm's approach to conducting investigations of ethical violations and emphasizes the value added of combining this function with general internal auditing.

Scheck was born in 1949 and grew up in Arkansas City, Kansas. He attended the University of Oklahoma and East Central State University where he graduated with a bachelor's degree in accounting in 1971. Scheck began his career with Conoco in 1972 in the finance department in Ponca City, Oklahoma. After serving in a variety of domestic and international positions, Scheck moved to the corporate office in Houston in 1991 and has held senior management positions in the company's upstream, downstream and corporate finance groups. In 1996 Scheck became general auditor of Conoco and in 2002 was named general auditor and chief ethics officer of the merged ConocoPhillips operations.

Authors: In a previous conversation, ConocoPhillips' chairman, Archie Dunham, told us that the President's Awards were an important element in creating an effective ethics culture at Conoco. Did these awards continue to play the same role at ConocoPhillips after the merger?

Scheck: While we changed a little bit in what we call it and how we do it, we still have the ethics award at Conoco/Phillips. You go around the company today and people still have the ethics awards that we gave them at Conoco. The people and teams still proudly display them in their offices. I've got one of the prototypes here. Today, we call this award the Spirit Value Awards. Integrity and ethics are among those values. We have a process to nominate, review, and award. We have a huge event in February where we bring together all of the award winners and several layers of management. There are probably three or four hundred people at the gala dinner and there is a reception before hand. There is a video of each award winner. Each one of the winners is brought up on stage to receive their award from one of the management committee members. It's called the Spirit Awards and it is embedded in the new company as well. We didn't have to fight or push to get that done when we merged the two companies. It was something that came naturally for both companies.

Phillips had something known as the Shield Award which is the old Phillips 66 Shield; we had the President's Award. We put them together because it was a merger of equals. Rather than call them one thing or the other, we called them The Spirit of Performance Award because we built our company around the word "Spirit" and the acronym that it stands for ("Safety" "People" "Integrity", "Responsibility" "Innovation", "Teamwork").

Authors: That's nice to hear. I heard that one of the reasons that Phillips had sought the merger was because they saw real value in Conoco's culture and wanted to merge with a company like that.

Scheck: We formed seven integration teams and each team had a leader from a heritage company (Conoco or Phillips). Our job was to establish for the organization what the policies and procedures were and to staff the organization. …

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