Magazine article Workforce

HR Plays a Central Role in Ethics Programs

Magazine article Workforce

HR Plays a Central Role in Ethics Programs

Article excerpt

Today's business climate presents more than a few challenges to your organization's ethical practices. Safeguarding your company is your job. Take a stand for business ethics.

We recently received a call from a from a friend and associate who has enjoyed a long career in human resources. Formerly a human resources manager in a division of a large national company, she just accepted a challenging position as vice president of human resources at a smaller but rapidly growing firm.

"The CEO hired me because he knew I could professionalize the department and the company," she said, "and one of the first things I noticed was the absence of any type of ethics or compliance initiative. It's up to me to put one in place. Where do I start?"

Before giving her our specific advice on how to start, we assured her this was an appropriate role for her position. Increasingly we've found that human resources managers are taking the lead in recognizing the need for such programs and in making them happen. The reason may be that, like our friend, those in leadership positions in human resources are highly respected within their organizations for integrity, have the ability to solve complex ethical dilemmas, understand the company's culture and communicate well at all levels. These traits are good ingredients for leading a successful corporate ethics initiative.

"HR as the ethics office" isn't an oxymoron. Indeed, a recent national survey of ethics officers by the 500- member Belmont, Massachusetts-based Ethics Officer Association revealed that the most frequently reported internal working interaction was with the human resources function, equaled only by the legal office. Furthermore, human resources managers were cited as more supportive than either the security or finance functions.

This message-that human resources managers were cited as supportive- bears repeating. Recently, we have seen a shift in employee sentiment that does not perceive human resources as being trustworthy or sympathetic to ethical issues. Perhaps this is because the human resources office-operating as a strategic business partner-is viewed as bottom-line oriented only and a tool of corporate management. It might also be a result of human resources still being perceived as having no clout and unable to influence corporate policy regarding core ethical issues. Or there's the perception that the very compensation systems designed by human resources are the root cause of many corporate scandals and employee wrongdoing.

But reality is debunking this myth. In large companies that support a separate ethics/compliance function that reports directly to a senior vice president or the CEO, the ethics officer today is likely to boast an HR background. This group of professionals-which includes Jerry Guthrie, corporate ethics director for BellSouth; Liz Gusich, ethics program director at USAA; and Gretchen Winter, vice president of business practices at Baxter International-is proving that HR people are well-equipped to deal with the myriad issues that arise. Furthermore, they claim the vast majority of calls coming into an ethics "helpline" are personnel-related. Thus, even in smaller companies that don't have the resources for a separate ethics function, ethics initiatives properly fit as part of the human resources department.

Decide if HR is the place for your ethics program. For these reasons, we advised our friend to seize the moment and be proactive in playing a major role in developing an ethics culture in her firm. We suggested she ask herself seven basic questions, which are adapted from recommendations by former NYNEX Ethics Officer Graydon Wood, to see if she would be an effective corporate ethics/compliance officer:

1) Do I hold an influential enough position in the company? …

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