Category: Compliance

Just Because it’s Legal, Doesn’t Make it Right


EthicsA few weeks ago I attended the annual conference for the National Society of Compliance Professionals (NSCP).  Being a compliance oriented conference, the program covered many of the topics you would expect, including CCO responsibilities, effective compliance programs, risk management, vendor oversight, cybersecurity, AML and fraud, and SEC exam and enforcement action updates.

One particular session caught my eye though, maybe because it wasn’t the standard fare: Legal vs. Compliance vs. Ethics.

The panelists explained that compliance is something imposed by external authorities and legal requirements, while ethics are driven from internal values.   Since laws are often established after the fact to address a wrong, just because it is legal today (i.e. no law against it), doesn’t make it right.

Companies are collections of human beings, who may not always make the right choices.  Traditional internal controls are not sufficient to completely prevent bad corporate behavior, and because of the leverage that many companies have, their actions can have a disproportionate impact on society.  Regulators are starting to look beyond legal compliance to an organization’s culture of ethics.

Just like a strong compliance program, a strong ethics program requires many of the same elements:

  • Tone at the top, mood in the middle, buzz at the bottom
  • Written policies
  • Ongoing training and communication
  • Accountable leaders
  • As well as: adequate resources, discipline for violations, measurement, and risk assessment

Boston Financial’s Ethics Awareness Program, Integrity in Action, includes written ethics standards, company policies and an associate call line. Associates are expected to immediately report if they see or suspect an unethical, illegal or unsafe activity. This can be done by speaking directly to their manager, a human resources representative, or the associate call line. The Boston Financial Ethics policies include the following:

  • Corporate Code of Ethics and Professional Standards
  • Harassment
  • E-Mail and Internet
  • Conduct Guidelines
  • Equal Employment Opportunities (EEO)
  • Ethical Reporting and Anti-Retaliation
  • Drug and Alcohol
  • Social Media
  • Confidentiality Agreement

On an annual basis, each associate is required to complete an online ethics training session, to reacquaint themselves with all of the policies.

Earlier in the conference, a speaker from the SEC also commented about a culture of ethics and the importance of tone at the top.  As he mentioned, to make money, you need to stay in business, and that happens by doing the right things for your shareholders.

So why do ethics matter?  The panelists shared evidence that in a strong ethical culture:

  • Employees are 1/3 more likely to report misconduct
  • But 2/3 less likely to observe instances of it in the first place
  • Employees freely speak up to senior leaders, resulting in improved productivity
  • Shareholder returns seen to be 5% higher than peer organizations

And of course, because it’s all about doing the right thing.

Ann Marie Mierzykowski

Ann Marie Mierzykowski

Ann Marie has been at Boston Financial since 2003, initially as a consultant in the retirement division, and then as an Officer in the Corporate Marketing department. She is responsible for positioning Boston Financial as a thought leader in the industry, promoting all business lines and overseeing strategic corporate initiatives from a marketing perspective. Prior to joining Boston Financial, she was Vice President / Director II at PFPC (now BNY Mellon) with client relationship management responsibilities for financial services companies with outsourced retirement plan operations. Ann Marie has a Bachelors Degree in Mathematics from The College of the Holy Cross, and received her Fellow, Life Management Institute certification in Pension Planning from the Life Office Management Association.


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