I recently had the opportunity to visit with ECI President Pat Harned. We discussed consumer behavior, corporate ethics, and compliance evolution, which are three interconnected factors that play a crucial role in shaping the business landscape of today. We considered some of the key factors that impact them and the challenges associated with different approaches.
One of the major trends discussed in the episode is the growing importance of consumer behavior and responsibility. Consumers are increasingly willing to pay more for products from companies that are conscious of their global impact. This shift in consumer preferences has led to a rise in purpose-driven companies that prioritize ethical practices and sustainability. Employees, too, now prefer to associate themselves with organizations that have a positive impact on the world. As Tom Fox aptly puts it, “Employees are increasingly at the future workforces coming into workplaces with an expectation that they’re going to work for purpose-driven companies.”
This changing landscape has significant implications for corporate ethics and compliance. The ethics and compliance profession is evolving to emphasize corporate values and purpose. The Ethics & Compliance Initiative (ECI) aims to lead in this area by equipping professionals with the tools they need to navigate the complex regulatory environment. Experienced professionals in the ethics and compliance field are crucial for organizational success, and ECI engages senior advisors to mentor leaders and provide guidance.
However, this evolution also brings forth challenges. The role of the compliance officer is becoming more tied to senior levels of the organization, with liability attached to it. Compliance officers now have a seat at the table, but with that comes the responsibility to take action on the big problems that society is increasingly facing. As Tom Fox points out, “The next generation of employees is looking at companies and saying when are they going actually to be taking action on some of these big problems?”
To address these challenges, collaboration with regulatory bodies such as the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) is vital. The DOJ and SEC will often seek input from ethics and compliance practitioners on essential topics that impact compliance officers and businesses. This is a key role for ECI to help play with the compliance community to facilitate this public/private partnership. This partnership ensures that the compliance profession plays a leadership role in ethics, sustainability, and governance. As Tom Fox mentions, “It has been a very nice development to see that they’re interested in the input from our profession.”
The episode also highlights the importance of ECI’s role as a thought leader in the ethics and compliance space. With the convergence of various fields, such as ESG (Environmental, Social, and Governance), ethics and compliance professionals need to stay ahead of the curve. ECI is putting together a blue-ribbon commission to examine what an effective ESG effort looks like and how it ties to corporate purpose and values. This initiative aims to help companies meet the growing expectations of employees and consumers.
In conclusion, consumer behavior, corporate ethics, and compliance evolution are intertwined factors that shape the business landscape. The preferences of consumers and employees are driving the rise of purpose-driven companies, emphasizing the need for ethical practices and sustainability. The ethics and compliance profession is evolving to meet these demands, with ECI leading the way. Collaboration with regulatory bodies and thought leadership initiatives are crucial for navigating complex challenges and ensuring a positive impact on society. As we move forward, organizations need to consider the effect on consumer behavior, corporate ethics, and compliance evolution when making decisions.
