The Relationship between Ethics and Compliance

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Jaap de Jonge
Editor, Netherlands

The Difference Between Compliance and Ethics

Business people sometimes incorrectly use the terms "ethics" and "compliance" interchangeably. But ethics and compliance have different meanings. Although they often go hand in hand.

COMPLIANCE means following laws, rules or policies (either to the letter or to the spirit of the law, etc.). Governments require corporate compliance, and it's up to boards and corporate directors to get all employees to comply. Compliance is a reactive word that forces people to make a conscious choice.
ETHICS means doing what is right regardless of what the law says. It's also a conscious choice that is a personal one. It's entirely possible to be ethical without being compliant. Ethics is proactive, rather than reactive as compliance is. Our personal values system, including our character, values and core principles, guide us when we make decisions. Most people feel a sense of deep personal satisfaction when they make ethical actions and decisions.<

It is also a matter of levels. Legal compliance - the bare minimum - is one thing. Code of conduct compliance is another. And ethical compliance is even another level above that. When ethics are considered as a fundamental value to a company, that may elevate everyone's performance.