Companies need to recognise inherent differences between compliance and ethics

Ethics govern what is morally wrong ...

The Star Tribune recently posted an interesting question in one of its editorial pages: 'Are compliance and ethics really that different?'

Nicole Zwieg Daly, the director of Center for Ethics in Practice at the University of St Thomas Opus College of Business, highlighted an excellent example which underlines the fact that compliance and ethics are unique disciplines. However, because both are designed to manage human behavior, it is easy to see why the two are so often conjoined.

Ms Daly recently had the privilege of speaking to a group of professionals as part of an ethics panel sponsored by their international association. After a combination of ethics and compliance-type questions, one participant asked if she should add a duty-to-disclose clause to one of her contracts, recognising it could potentially conflict with confidentiality values stated in the association's code of conduct. Ms Daly responded by sharing that whether or not you add a duty-to-disclose clause in your contracts is wholly up to you as a business owner, and how you plan to strategically manage your business liabilities. However, if you go to bed at night with an enduring feeling that you should have disclosed information to reasonably prevent harm to your client or another, it does not matter whether you are compliant with the duty-to-disclose clause, it matters that you did what was right to prevent someone from serious harm. That is the difference between compliance and ethics. Following a duty-to-disclose policy because you are supposed to, is compliance. Disclosing because you feel like it is the right decision in terms of your values, is ethics. Compliance governs what is legally wrong. Ethics governs what is morally wrong.

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