By Dr. Paul Vorster
Ethics has become a catchphrase in South Africa. With the sheer number of ethical failures encountered in the public, private, and SOE sectors, managing the ethics of organisations is starting to become a priority. Many organisations have realised that managing ethics risk is as important as managing operational, strategic or financial risk. Unfortunately, the same organisations often struggle to take ethics seriously, or provide the resources required for the effective management of ethics.
The job of managing ethics often falls to ethics practitioners’, which are a much-needed resource right now. These individuals are often asked to spearhead ethics management interventions, compile an ethics risk register, generate ethics awareness, and develop and design ethics management strategies and interventions. In addition, they also provide ethics advisory services to employees, train senior management on ethics, analyse behavioural trends, revise ethics policies, and manage the safe-reporting system in the organisation. This must be done while the ethics practitioner tries to catalyse the development of an ethical culture which is a corporate governance imperative in the King IV Code of Corporate Governance.
It is becoming clear then, that ethics practitioners have a very challenging role. To add to this challenge, most ethics practitioners fulfil this role on a part-time basis where they must simultaneously focus on their primary designation while trying to manage ethics.
Much about the ethics practitioner role is unknown. This creates an additional challenge as there is no uniform approach for an ethics practitioner to operate effectively.
The Ethics Practitioners’ Survey was therefore conceived by The Ethics Institute to better understand the ethics practitioner and the ethics management functions of organisations. This survey was completed by 249 ethics practitioners operating in Southern Africa. Numerous questions about the role of the ethics officer were asked. In this article we will look more closely at some of this data with a focus on the challenges faced by the ethics practitioner in their day-to-day work.
What does an ethics practitioner do?
Figure 1 below displays the most frequent tasks (i.e. priorities) completed by the ethics practitioner based on the survey results.
Figure 1. The primary (most frequently implemented) tasks of the ethics practitioner
It can be noted from the above list, which only displays those activities which are considered a priority by ethics practitioners, that the number of tasks the ethics officer must accomplish are widespread. This is extremely challenging. Let us look more closely at some of these tasks.
Most ethics practitioners indicated that most of their job involves fighting corruption and fraud in organisations (73%) followed by the provision of ethics advisory services to non-managerial employees (69%). Thereafter, the most important tasks of the ethics practitioner were to provide ethics advice to line managers (67%) and manage disclosures of financial interest (67%). Other tasks that also take priority include the conducting of pre-employment screening to ensure ‘good apples’ are selected into the organisation (65%), implementing organisation-wide ethics awareness programmes (63%), and investigating ethics issues/problems in the organisation (63%).
This is by no means a comprehensive list. It can be noted however that the tasks are numerous and often highly complex. Additionally, many of these tasks take the same priority.
What are the characteristics of the ethics management function?
To better understand the role of the ethics practitioner we also inquired about the ethics management function. For example, whether the ethics management function is a standalone function (i.e. in the form of an independent ethics office) or whether it is shared with another function.
Figure 2. Is the ethics function a standalone function or is it shared with another function?
It is interesting to note that 71% of ethics practitioners indicated that the ethics management function they work in is a shared function.
In other words, nearly 3 out of every 4 ethics practitioners manage the ethics of the organisation on a part-time basis. Only 29% of ethics practitioners indicated the ethics function is a standalone function. If the complexities of the tasks of the ethics practitioner is considered, this poses a huge challenge for ethics practitioners to be effective at their work with other work considerations often taking priority.
However, it is possible that many organisations incentivise the management of the ethics function. To answer this question, we asked ethics practitioners whether management of the ethics function formed part of their key performance indicators (KPIs).
Figure 3. The management of the ethics function is often not incentivised
It can be noted from the results in Figure 3 that more than 2 out of 3 ethics practitioners are not incentivised for taking on the responsibility of the management of ethics in the organisation. This indicates that this position is not a ‘core’ priority for most organisations.
We also wanted to find out which functions in the organisation most often take up the responsibility of managing ethics.
Figure 4 on the following page elicits which functions in the organisation were most likely to manage the ethics as an additional part of their mandate.
Figure 4. Functions that manage the ethics of the organisation
It can be noted from Figure 4 that Human Resources (19%), Risk (18%) and Compliance (12%) are the functions that most often take on the responsibility for managing ethics in the organisation. Even the Company Secretariat (CoSec) manage ethics more often than an independent ethics function (9%).
Although these functions can manage ethics effectively and do so in many organisations, it is often more challenging. For example, the greatest challenge with the Human Resources function managing ethics, is that this function may be perceived as the disciplinary function in the organisation. This may create a fear to report to the ethics practitioners that are trying to manage ethics and create open communication between this function and employees.
Additionally, the Risk function may be viewed in a similar manner. This function often focuses on cataloging risk and developing mitigation interventions. Although this is useful, ethics risk mitigation is only a small part of the responsibilities of the ethics practitioner. This is a similar problem with the Compliance function. Additionally, although the CoSec is becoming more involved in the management of ethics in most corporate organisations, this function may not enjoy the positional power and influence of some other functions and may be ignored.
The biggest challenge with situating the ethics function in an existing function is the confusion this creates amongst employees regarding the role of the ethics practitioner.
In Figure 5 on the following page, we look more closely at some of the most pertinent challenges faced by ethics practitioners in their day-to-day work.
Figure 5. The primary challenges faced by ethics practitioners when managing ethics
It can be noted from Figure 5 that the most challenging aspect to managing ethics in the organisation is not having the finances/resources to do so effectively (13%). In addition, ethics practitioners also indicated that corruption, illegality, and a lack of ‘organisational will’ was as potent a challenge as not being resourced effectively (13%). It would also be naive to think that these two themes are not related to one another as finances/resources are often withheld when the organisational will to manage ethics is lacking.
A very interesting challenge to managing ethics was the misconceptions and fear about what the ethics practitioner does (9%). In other words, employees do not really understand the role of the ethics practitioner and therefore do not use this ethics practitioner as a resource for ethics advice or for reporting misconduct. This is an interesting challenge as previous results elucidated that the ethics function is often shared by another function.
Additionally, we now know that most ethics practitioners manage ethics part-time and are not well incentivised to do so. It would also be naïve to think that the role-confusion employees display regarding the ethics practitioner is because the ethics practitioner role is not well defined in organisations.
From initial investigations into the role of the ethics practitioner it has become evident that it involves a high level of complexity. In addition, there are many tasks that need to be accomplished by the ethics practitioner for ethics to be managed effectively.
The under-resourcing of the ethics function and the lack of incentives for ethics practitioners indicates that the job of the ethics practitioner is highly challenging. With business and organisational ethics becoming highly important areas of focus for organisations, it is ironic that the ethics function is not given the same importance as many other functions.
In summary, organisations should prioritise the ethics management function and ensure that ethics practitioners are provided the support and resources to manage ethics and ethics risk in the organisation. Unless organisations change their mindset towards the management of ethics, more ethical failures will be sure to follow.