Markkula Center of Applied Ethics

Role And Responsibilities of Ethics and Compliance Officers

  

"Ethics and Compliance are two separate functions," said Patrick Gnazzo at the February 2012 meeting of the Business and Organizational Ethics Partnership (BOEP). "Compliance is not an art form-it's about rules, policies, and regulations." Ethics, he continued, is an art form, and to practice it, you have to understand the business you're in and how best to communicate its values to employees and other stakeholders.

Gnazzo should know. Here's how Ethisphere magazine describes him:

Want your company to toe the line and stay ethical in its dealings? Better get Gnazzo. Previously SVP for the highly regarded business practices, risk and compliance programs at United Technologies Corp (UTC), Gnazzo bravely jumped ship in 2005 to create a compliance and ethics culture at scandal-ridden Computer Associates. From all reports he appears to have done a great job.

Gnazzo shared lessons from these experiences with the ethics and compliance officers and business ethics scholars who form the BOEP. In the compliance area, he emphasized the need not to pretend to be an expert in everything. "A compliance officer's role is oversight. I'm not the expert on each function's compliance. My role is to be sure the functions are doing what they said they'd do." He recommended close listening, frequent compliments, and giving employees the opportunity to "tell on themselves" if something has gone wrong.

In the ethics area, Gnazzo pointed out that everyone has his or her own opinion of what "ethics" means. The definition for the company, he argued, should not come from the ethics officer or even the CEO but from the board of directors, who are ultimately responsible for corporate behavior. The average tenure of today's CEO is less than half that of a board member.

To spread the corporation's values throughout the organization, "open communication is paramount," Gnazzo said. The company needs to tell employees, "We really want to know what you think," and then to thank individuals when they raise issues. Gnazzo has always taken a strong anti-retaliation stance. "If someone asks me what my real job is, I say, it's to protect employees who speak up."

Reflecting on approaches he tried that didn't work, Gnazzo mentioned "trusting everyone to do the right thing." While he doesn't think a compliance officer should be a cop, he advised, "Don't be shocked when you find out people are acting unethically. People can find loopholes in just about everything."


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