Seminar in Business Ethics: Reporting System Administration

This report examines internal communication mechanisms for reporting unethical behavior within an organization, focusing on Ethics & Compliance Officers (ECOs), ombudsmen, and assist lines. It details the roles and responsibilities of ECOs in managing internal reporting systems, including their characteristics and scope, and contrasts them with the role of an ombudsman in mediating and investigating employee concerns while guaranteeing anonymity. The report also explores assist lines, or ethics hotlines, as a method of obtaining information about potential ethical or illegal situations, including how they work and the types of inquiries they handle. Additionally, it discusses whistleblowing, including when it occurs, when it is appropriate, and the negative outcomes it can have on both the whistleblower and the organization. The report concludes by emphasizing the importance of carefully managing these internal reporting systems to prevent external whistleblowing and its associated ramifications. The report also highlights the importance of confidentiality and anonymity to encourage reporting and emphasizes four wrongdoing categories for colleges and universities: unethical financial abuse, unethical personal conduct, unethical treatment of college property, and unethical use of information technology.

Seminar in Business Ethics
Chapter 8 | Ethics Reporting System

By the end of
chapter we
will be able
to
Describe Describe the negative outcomes whistleblowing has on
both the whistle-blower and the organization
Manage Manage an assist line to receive employee complaints
by telephone or Internet
Establish Establish an ombudsman position
Create Create an ethics & compliance officer (ECO) position
Administer Administer an internal reporting system for ethical
issues

This chapter explores three internal communication m
obtaining information about unethical behaviour
Ethics & compliance officer (ECO)
An ombudsman
An assist line

Why employees see
unethical conduct,
but often don’t do
anything about it
• According to National Business Ethics
Survey these are the main reasons:
• 59% believe no corrective action will
be taken
• 46% fear retaliation
• 39% fear no anonymity
• 24% assumed someone else would
report it
• 18% did not know who to contact

Ethics & Compliance
Officer (ECO)

Ethics & Compliance Officer (ECO)
The ECO’s primary duty is to manage the organization’s internal reporting system.
Giving ethics high visibility demonstrates a good faith effort to enhance ethics within the organization
Some organizations assign a dedicated ECO for this role
Others assign it as a side task to one of the existing high-level employees
Some organizations make it a centralized role, so the ECO manages all ethical activities and its reporting system
Others make it a decentralized job, so the ECO gives the oversight, but every department or locations creates their own
ethical activities

Characteristics of an ECO
Well networked to
all business units
A high position
with authority
Well trusted and
respected from
other executives
Independent with
freedom
of organization’s
politics
Operationally
experienced
Has access to
internal
information
Gain knowledge to
ethics theories
Has high level of
communication
skills and problem-
solving skills

ECO’s scope
includes
Gift giving with suppliers and
customers
Personal use of organizational
property.
Asking probing questions to
clarify situational nuances

Ombudsman

Ombudsman
Another channel for communicating information about potential ethical and legal violations is an
organizational ombudsman.
The ombudsman concept originated in government and has spread to other types of organizations.
An ombudsman’s job scope is typically much narrower than that of an ECO

Ombudsman job scope inclu
Guarantees the employee anonymity
Investigates the employee’s concern,
Mediates a fair settlement,
Protects the employee from retaliation.
Serves as a deterrent against managerial abuse of power and other unethical
activities.

THE OMBUDSMAN IS GRANTED ACCESS TO ALL
EMPLOYEES, INCLUDING BOARD MEMBERS, WHEN
INVESTIGATING A COMPLAINT.
AN OMBUDSMAN, LIKE LAWYERS AND ACCOUNTANTS, IS
HELD LEGALLY ACCOUNTABLE TO A PROFESSIONAL CODE
OF ETHICS.