Ethics and compliance are two very different things, and getting them confused can hurt your company. In fact, you can have a strong compliance program in place and still not be an ethical company, as Enron demonstrated handily in 2001.

And Enron isn’t the only example. There are many examples of big companies tainted by corruption that had ticked all the boxes on their compliance programs. But ethics is more than a box-ticking exercise, and relying on a compliance program to enforce a culture of ethics puts a company in dangerous territory.

“Compliance tells us what we must do, ethics tells us what we should do,” says Tom Tropp, Vice President Corporate Ethics at Arthur J Gallagher & Co. “Compliance is about obeying the law, about not violating a contract. Ethics is about values, it’s about what we believe in,” he says.

I interviewed Tropp at the 2012 Global Ethics Summit, where he was a featured speaker, and he shared some of the ways his company, one of Ethisphere’s most ethical, keeps ethics at the forefront of business.

Tone from the Top

The key to making ethics easy is starting at the very top of the organization. “The first thing you need is buy-in from the top,” says Tropp. Once you have that, the ethics message permeates the organization pretty easily, he says.

[isight-ad]“There are challenges with that, obviously. You have to have someone proactively working the process,” says Tropp. But if you have the commitment from the highest levels of the company, the rest should just be a matter of taking the necessary steps to get the rest of the company on board.

Step 1: Identify Your Values

“So the first thing you need to do is identify what your values are,” says Tropp. “And surprisingly, many companies don’t do that. If you look at the list of the Fortune 1000 companies, every one of them has a code of conduct.  Very few actually state what their beliefs are, what their values are. They’ll [have] a neutral type of statement, such as ‘we believe in fair dealing’ or ‘we’re a highly ethical company’, but they never define it.”

Defining a company’s values requires some introspection at the highest levels of the organization, says Trop, and it should provide the answer to the question: “What do we believe we should do, in addition to what we must do?”

Step 2: Communicate the Message

Next, you need to communicate the message to everyone inside and outside the company. To do this, you need to have a statement that is clear, that deals with values, and that all your employees understand.

“We tell our employees that we want every employee, we want every competitor, we want every client to know exactly what it is we believe in,” says Tropp.

This makes everyone accountable for not just their own behavior but that of their coworkers, supervisors and everyone who comes into contact with the company.

“If we’ve all talked about what it is we believe in, and we talk about it regularly, when I don’t do what I’ve told you we should do, you will call me on it… I will hear from you because we’ve had that conversation; we’ve agreed that these are the things we should do,” says Tropp.

Step 3: Reinforce your Values 24/7

Once you’ve done all the work to get your message of ethics articulated and communicated, the last step is to reinforce it.

“In our company we have code of conduct like every other public company, and then we have a document that’s called ‘The Gallagher Way’,” says Tropp. It’s a list of 25 things that we believe in. None of it has anything to do with compliance. It all has to do with things like empathy and respect,” he says.

The list is posted on the wall in every Gallagher office everywhere in the world, included in every proposal sent to a prospective client and referred to in management meetings. “So a leader of a division, in deciding an approach to something, very often will say, ‘well, we’re doing it this way because that’s the Gallagher Way of doing it’, says Tropp.

It has nothing to do with compliance; it has everything to do with your values and what you believe in. And to make it stick, it has to be reinforced 24/7.