What is the difference between ethics and compliance?

Ethics and compliance are essentially different sides of the same coin. Compliance is following the law, while ethics is doing what is right regardless of what the law says. Compliance is something that the government requires you to do. Ethics, on the other hand, is something you choose to consider when taking action. As an example, various countries have environmental laws that require products to be labeled in a certain way and may include font requirements, placement rules, etc. Failing to properly label a product or follow some other technical regulation is not unethical or immoral, but it is noncompliant, meaning that the company may face fines, liability or other government action. By contrast, a government may not dictate whether a company makes its products more environmentally safe or easier to recycle, but doing so may be the ethical thing to do.

--Compliance means conforming to relevant laws, regulations, policies, standards, procedures, or contractual obligations. These may be external (local, state, federal, or third-party) or internal obligations. Compliance with external obligations and EDMC’s own requirements are a critical component of effective risk management, enabling the Company to better prevent, detect, and respond to violations that are damaging to its viability. --Ethics refers to moral principles and values that guide a person or an organization, and ethical conduct refers to knowing the difference between right and wrong and choosing to do what is right. Our Business Ethics Policy and Code of Conduct is designed to regulate behavior by putting into practice rules and policies employees are expected to adhere to, while promoting ethical behavior based on shared organizational values.

Dear Friend, --Compliance means conforming to relevant laws, regulations, policies, standards, procedures, or contractual obligations. These may be external (local, state, federal, or third-party) or internal obligations. Compliance with external obligations and EDMC’s own requirements are a critical component of effective risk management, enabling the Company to better prevent, detect, and respond to violations that are damaging to its viability. --Ethics refers to moral principles and values that guide a person or an organization, and ethical conduct refers to knowing the difference between right and wrong and choosing to do what is right. Our Business Ethics Policy and Code of Conduct is designed to regulate behavior by putting into practice rules and policies employees are expected to adhere to, while promoting ethical behavior based on shared organizational values.

Compliance is following the law, while ethics is doing what is right regardless of what the law says. Compliance is something that the government requires you to do.

**Ethics and compliance are essentially different sides of the same coin.** Compliance is following the law, while ethics is doing what is right regardless of what the law says. Compliance is something that the government requires you to do. Ethics, on the other hand, is something you choose to consider when taking action. As an example, various countries have environmental laws that require products to be labeled in a certain way and may include font requirements, placement rules, etc. Failing to properly label a product or follow some other technical regulation is not unethical or immoral, but it is noncompliant, meaning that the company may face fines, liability or other government action. By contrast, a government may not dictate whether a company makes its products more environmentally safe or easier to recycle, but doing so may be the ethical thing to do. If your policies and training place great emphasis on high-level values of right and wrong, you may not be properly pushing a culture of compliance. Of course, too much focus on legal standards without strong ethics messaging may inhibit the kind of values-based culture that makes employees proud and companies great. It is important to think about and convey the importance of both ethical considerations and compliance. The distinction between ethics and compliance becomes even more interesting when you are dealing with a compliance issue that has an ethical component. The most obvious example is corruption. Besides being prohibited by the Foreign Corrupt Practices Act (FCPA), U.K. Anti-Bribery Act and scores of other local laws (and thus a compliance issue), most people would agree that corruption is wrong and has an ethical component. But even with a seemingly obvious ethics issue, using a “do the right thing” message to drive your anti-corruption program may not be the right move in every circumstance. **For example**, you likely have a policy that prohibits employees from giving cash, lavish gifts or favors to public sector employees. The policy is part of your anti-corruption program, and messages about right and wrong, values and morality, should be the most effective way to motivate employees to follow the policy. After all, everyone knows bribery is wrong. But actually, such a message may lack credibility with many of your employees who live in cultures where lavish gifts are expected or cash gifts on certain occasions are appropriate. It may actually feel wrong to them to refrain from giving an expensive gift as part of a business relationship. Similarly, employees sometimes rationalize their actions as right because they believe the ends justify the means. Isn’t it better to give a lavish gift and help the company get business than to let the work go to a competitor? What is really “right” here? For these employees, the more effective message may be about compliance with the FCPA and similar laws, emphasizing the potential liability, brand impact and business risks of non-compliance. The best programs will recognize the difference between ethics and compliance and drive both as integral components of company culture and successful performance. In the end, companies that follow the law and prioritize ethics have a competitive advantage.