Ethics and the law: one and the same thing?

By Lee Rossini

Ethics is a branch of moral philosophy which consists of the values and principles that guide the behaviour of an individual or a group. Our values are learnt from our families, friends, mentors, colleagues and the society in which we live. There are in fact many different influences on our values, which in turn have an impact on how we behave. What is immediately apparent is the possibility for disagreement and conflict between individuals, businesses and even countries. The values instilled in us may differ from the values instilled in our friends. Countries may hold certain values as important whilst others do not. The differences in values lead to differing perceptions of what constitutes ethical behavior.

These conflicting views present numerous challenges when deciding on what is an acceptable and appropriate course of action in a set of circumstances. This is where the law has an important role to play in limiting the conflict by prescribing the courses of action. As such, the law is an accepted system of rules, regulations and guidelines which are enforced through social institutions designed to govern the whole of society and the actions of its individual members. For example, the law dictates how employees, clients, or children are to be treated. There are also laws protecting the environment and laws against fraud, the payment of a minimum wage, how companies must be run and how estates must be dealt with, amongst many others. Each law represents the values and ethics of the society in which they exist. 

The main differences between the law and ethics are:

• Laws are created by the government to govern behavior in areas where it appears that self-regulation is not enough. It clearly defines what is acceptable behavior and what is not. Ethics is expected standards of behavior in a society which are governed by individual, legal and professional norms.
• The law is expressed and published and is available to all members of society. Ethics on the other hand, is abstract and not written down. Ethics is agreed-to codes of conduct which govern what is acceptable in terms of how people live and interact with each other.   
• The law is legally binding and prescribes some form of punishment if it is broken, whilst there is no punishment for the violation of ethics as its rules are not legally binding. 
• The law is designed to maintain peace and order and to protect all the members of society, whilst ethics is designed to assist people in deciding what is right and wrong and what is an appropriate way in which to act. 

Although the objectives of law and ethics differ, they are closely aligned and support each other as they both provide guidelines on how to act in a particular manner. In fact, appropriate laws are often implemented following an ethical violation. When situations occur which most people in a society consider to be unfair and overstepping the accepted norms of society, new legislation is implemented to prevent such behavior from being repeated. In the financial services sector, the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act), Treating Customers Fairly (TCF), and the Retail Distribution Review (RDR), amongst others, are examples of legislation and guidelines that are necessary after accepted norms relating to the ethical treatment of clients were repeatedly broken. As self-regulation proved untenable, laws were introduced to provide minimum standards of how clients should be treated.

Although the law provides a framework which guides our behaviour, it does not prevent unethical behavior. This comes down to our individual values, ethical codes and behaviour. We are personally responsible for the decisions we make. It is up to each of us, as individuals, to carefully consider the decisions we make in each situation and ask ourselves these questions: do they fall within the legal framework and would they be considered ethically sound?