Ethics v. Compliance: As an ethics & compliance consultant and an advocate of both, I often get asked what is the difference between the two, especially in emerging markets where these concepts are recently being introduced into organizational cultures.

With compliance, you’re either compliant or you’re not, it’s a rather straightforward black or white assessment— whereas ethics has more gray, subjective dimensions.

Compliance: You must adhere to the law, rule, regulation, policy, procedure, or standard applicable to you/your organization. The End.

Ethics: is much harder to define as it implicates a moral judgment and adopting a personal code of conduct that reflects “positive” values: right and wrong, good and bad.
With ethics, you aim for more elevated but more abstract values like “ winning with integrity”, “transparency”, “honorable behavior”, and “doing the right thing.”

The problem with compliance alone is that a lot of companies fall into the “tick the box”, “window dressing” category, which is producing every surface level document/policy the regulator requires without real substance behind the program, which may result in a poor corporate culture.

With ethics alone, you run the risk of going on a philosophical tangent that ignores certain laws/regulations completely, which may get you in trouble with the regulator.

Can you be compliant, but unethical? Absolutely! For the same reasons, your business conduct can be legal but unethical. A common example is hiring foreign suppliers in perfect legality whose labor practices do not fit the ethical expectations of local customers.

And what about the opposite: being ethical, but non-compliant? You bet! Think of hotel employees for example who have to throw out tons of food every night. Giving it to the homeless isn’t allowed in many countries because of food regulations. But they do it anyway.

Ideally, you want to achieve a delicate balance between ethics & compliance. Companies that integrate a culture of ethical conduct into their compliance program, get employees to follow the rules, not just because they have to, but because it’s the right thing to do.


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