Ethics officers play vital role


says G. Seetharaman of The Economic Times of India. ETHICAL BUSINESS


Technology giants Apple and Google have often had questions raised about the ethicality of their business practices – Apple for not doing enough to improve worker conditions at its suppliers’ factories in China, and Google for using its position as the dominant search engine to thwart competition. So it did not come as too much of a


surprise to many people when the two companieswere in the news for avoiding paying taxes in the US on billions of dollars of profits through the tactic of creating subsidiaries in countries like Ireland. Apple chief executive TimCook has called for reforms in the tax system and says Apple pays every single dollar it owes.


Legal versus ethical Itmay turn out thatApple and Google did nothing illegal but just took advantage of the loopholes in the tax structures of different countries. This issue fits into the debate of “legal versus ethical”, according to Centre for Business Ethics executive director W. Michael Hoffman, at Bentley University in the US. He believes these matters should be


addressed by a company’s ethics committee or chief ethics officer. “If a particular thing is not prevented by law, you need to think aboutwhether it will set a bad precedent or what would happen if it was reported by the media,” he says. Another such example is a chemical


company discharging effluents without treating them when the law doesn’t prevent it. Legally the company may be fine, but is failing in its responsibility toward the environment, says Hoffman. Among prominent global companies


with chief ethics officers are construction and engineering company Bechtel Corporation, Prudential Financial and retailer Best Buy. If the tax episode rekindled the ethics


debate globally, Ranbaxy Laboratories’ $500 million settlement for charges related to drug safety and falsifying data


Practices that are legal may not necessarily be ethical,


has done the same in India. Experts believe such instances only highlight the need for companies to givemore than cur- sory attention to ensuring propriety in the workplace. Ethics officers are still a rarity among


companies in India.While largecompanies haveadetailed codeofconduct, it seldom resonates beyond thepaper it is printed on.But in the US, the code of conduct is taken very seriously. “Companies, for instance,


We don't understand that what is legal


may not necessarily be ethical


are very particular about diver- sity and inclusion,” says India’s Society for Human Resource Management CEO Achal Khanna. Some Tata group com- panies are among the few in India that have ethics officers.


Ethics of minutiae While in many countries the chief compliance officer’s role has been


expanded to includematters of ethics, in India they are still largely concerned with legalmatters. Insome cases, the com- pany secretary is also the chief compliance officer. But experts say there is certainly a need for ethics officers. Khanna cites minor infractions, such as a company that offered free food to itsemployees so good they were taking it home. In another instance, a senior offi- cial in a company was found taking office stationery home for his children.


A teacher of marketing and organi-


sational behaviour,Dheeraj Sharma, says that though business ethics are largely universal, cross-cultural differences result in a lack of universal understanding of the concept. “Thus, in India we don’t under- stand that what is legal may not neces- sarily be ethical. That’s why companies need ethics officers.” E


AUGUST/OCTOBER 2013 | WWW.EXECUTIVEPA.ASIA 23


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