Are ethical officers critical for businesses? - CNBC Africa

Are ethical officers critical for businesses?

Southern Africa

by Trust Matsilele 0

EthicsSA says though companies have managed to talk with ease on fraud challenges existed on addressing ethics.PHOTOS: Business-Ethics

The institute said challenges in addressing ethics was taking place at a time when companies had found ways of talking with ease about fraud and corruption.

EthicSA said it made business sense to hire somebody specifically to deal with ethics.

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“There are many sound business reasons supporting the rationale for creating a position for an ethics officer, no matter the size of the organisation,” said Deon Rossouw, CEO of the EthicsSA.

“At a broader level, widespread adoption of King III and similar codes, and the integration of many of its principles into law (such as the Companies Act) is testimony to the fact that good governance makes for good business.”

According to the institute, trends showed that smaller business lagged far behind in addressing organisational ethics through an ethics officer.

“For larger companies, it has become common practice to appoint an ethics officer. This incline in the appointment of ethics officers is mostly due to the various corporate governance developments and regulations,” said Rossouw.

“Smaller companies or organisations aren’t as strictly governed and regulated, and might therefore be unaware of the value of appointing an ethics officer.” 

Rossouw added that in the public sector, the Integrity Management Framework, which was adopted by Cabinet in 2013, requires that all national and provincial departments have an ethics officer.

EthicSA said ethical officers act as a clearing house for all ethical issues.

“Ethics officers are often appointed from amongst a company’s own staff in addition to other duties, and that is certainly a good option for smaller companies,” said Rossouw.

“However, training and certification are absolutely essential to ensure that the ethics officer is empowered and can deliver the maximum business value.”

EthicSA says going forward it will be imperative for organisation to ensure they have ethics officer so as to navigate operational complexities.

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“The business environment is much more complex than it used to be, and its complexity is increasing,” said the institute.

“Navigating tricky ethical issues is increasingly something that requires professional expertise—common sense on its own is no longer a reliable guide. Ethics officers become the de facto helpline for company employees on all ethical issues.”