*This blog post was updated on August 18, 2021 to incorporate new data and company services.
Just about any CEO will say that their business has a strong commitment to operating with integrity. While the commitment to being ethical may be true, many organizations struggle with actually implementing an ethical code of conduct. The board of directors and senior management may put guidelines or policies in place to ensure that their employees are staying on the ethical path, but guidelines don’t matter if no one inside the organization is enforcing them. This is where the integrity officer—sometimes called a compliance officer—comes in.
What is the job of an integrity officer?
While many businesses have effective compliance training programs with capable compliance officers and teams, an integrity officer can help drive the culture of honesty and integrity within an organization beyond compliance training. Ethics and integrity are discussed a lot in today’s business world, and a quick internet search will pull up hundreds of job listings for integrity officers.
Sometimes the integrity officer role is combined with other roles in the legal department or other compliance departments. Yet there is no denying that after a string of high-profile corporate scandals, from Enron to Volkswagen to Wells Fargo, integrity and ethics are becoming hot button topics leading to more and more job openings. The backlash from these scandals has led to more organizations appointing integrity officers and creating ethics departments. Government offices, charities, and international corporations have all jumped on the trend as well.
Why do organizations need an integrity officer?
Having an integrity officer helps businesses demonstrate their commitment to compliance with anti-corruption laws, especially ones that have been put in place in the wake of corporate scandals. The laws require organizations to actively work towards preventing bribery, money-laundering, or other dishonest behavior. While being compliant with these laws certainly benefits corporations, Antonino Vaccaro, an associate professor of business ethics at the University of Navarra, believes that having an integrity officer can also help set the organizational tone from the top. “I have done more than 50 criminal cases as an investigator,” he said. “Every time, the problem is not compliance; it is organizational values. If you have an organization that is healthy and a bad apple arrives, he or she is recognized, re-educated, or expelled.” So, who would be responsible for recognizing and re-educating these bad apples? The job would likely fall to the integrity officer.
“The problem is not compliance; it is organizational values.” –Antonio Vaccaro, Associate Professor of Business Ethics, University of Navarra
However, a company can’t just tack the title of “integrity officer” onto a random employee and expect there to be a real change. Ethics and compliance consultant Richard Bistrong urges that the integrity officer needs not only seasoned experience, but also a wider ethics and compliance team. “Splitting the function out isn’t the true measure,” he says. “It’s the resources they are being given and they are seated at the table when business decisions are being discussed and planned.” Business leaders have to include the integrity officer—and their team—in the discussions and decision-making process. The top tier of the company has to reinforce the ethical standards; otherwise, the lower team members will notice and emulate the bad behaviors. Bistrong has first-hand knowledge of the consequences of working without a strong sense of integrity, as he served a 15-month sentence for an overseas bribery conspiracy. Since finishing his jail sentence, he has started consulting about the need for ethics and integrity. "We tend to listen more to the people who set our performance goals,” he explains.
When company ethics relax, corporate scandals happen
In 2015, the automobile industry was rocked with a scandal of huge proportions. German car manufacturer Volkswagen was charged with violating the Clean Air Act by the United States Environmental Protection Agency. The car company had programmed software inside the TDI (turbocharged direct injection) diesel engine models to trick the emissions testing devices. The engines would appear to be running cleaner than they actually were. The scandal cost the company billions of dollars and the loss of their reputation. Even years later, Volkswagen is still facing criticism from investors who think the company is not making strides to repair their image fast enough. This sentiment was seconded by Volkswagen’s Head of Integrity, Hiltrud Werner.
Werner was tasked with crafting an ethics and compliance program that would elevate integrity throughout the organization and ensure that VW’s culture centered upon doing the right thing out of a personal conviction, not just “check-the-box" compliance. This meant transforming the entire VW organization from a rigid, hierarchical structure to one that allows for individuals to feel comfortable speaking out. Werner called it “three-dimensional change” in a recent podcast with LRN.
The key takeaway
Having a strong ethics and compliance team and an effective integrity officer can help drive the culture of honesty and integrity within an organization, but it is imperative that the CEO and upper level of management also exude the same air of integrity. The presence of an E&C team does not absolve management or the board from responsibility when unethical behavior is found to have taken place. An integrity officer is only as strong as the leaders that support them. And an organization's culture is often only as deep as its leadership team, as tone is set from the top.
To learn more about how your organization can better elevate ethics, compliance, and integrity, check out these resources: