GEERT VERMEULEN: THE CULTURE OF BUSINESS ETHICS

Geert Vermeulen, CEO of Ethics & Compliance Management & Consulting (ECMC), demonstrates how ethics and compliance belong together. 

 

Listen to the podcast:

Highlights of the conversation:

  • Public value is acting in the general interest, being ethical, and doing the right things. But there is always a dilemma trading: Who am I to say what is right? On the one hand there is the law but, on the other hand, there are the intentions behind the law. Laws are a reflection of beliefs in society. As a compliance officer I am stimulating people to make sure that they stay within the boundaries of the law but, as an ethics and compliance officier, I try to see that they look at doing the right things. Sometimes there are things that are not prohibited by law that may not necessarily be the right things to do. 
  • Sometimes compliance people are aware of a problem but they are not heard. It is possible sometimes that when they report to a legal or a risk officer, the real ethical debate does not take place at board level. Ethics and compliance officers should have a direct reporting line to the board of directors, the supervisory board or the audit committee. We have to make sure that they are heard and empowered, that they have access to certain informations. 
  • What I see is that there has been more and more attention brought to ESG investing. There are ESG indices and one company had even launched a first ESG tracker. CEOs and CFOs get nervous when analysts tell them to buy, sell or hold shares. This is very important to them because this determines how they are perceived, how they are doing. Can’t we develop an ethics indicator to stimulate people so that analysts can see how a company is doing with regards to ethics and sell advice accordingly?
  • I strongly believe that ethical companies will perform better financially in the long term. There is a connection between ethics and financial performance.
  • Trust is one of the key terms in my profession. Companies that have a culture of trust will be trusted. A culture of trust and discussion will stimulate creativity because people will not be afraid to come up with innovative ideas. But implementing trust is not something you learn in business schools. Yet.
  • We, in the Netherlands, have set up a group of about 20 compliance officers (Expert Group on Culture and Behaviour) that has launched a toolbox of 40 to 45 tools to help compliance officers influence culture and behaviour. This toolbox is presently available only to members of the Dutch Compliance Officers Association, but we’re thinking about making it available to a broader audience thanks to an English translation. To develop this toolbox we used a model that used eight factors that influence behaviour (transparency, accountability, incentives, discipline, etc.)
  • In the past when I tried to sell ethics and compliance programs to companies I would rely on fear, telling people that if they don’t invest into ethics and compliance problems they may face big problems. I also told them this was is the right thing to do, but board members would not always respond to that argument. Nowadays I try to produce evidence that ethical companies perform better financially in the long term and to stimulate this long-term thinking.    
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