Practical Applications of The Code of Professional Ethics for Compliance & Ethics Professionals (2014 Compliance & Ethics Institute P13)
Practical Applications of the Code of
Ethics for Compliance & Ethics
Art Weiss, JD, CCEP-F CCEP- I Joseph Murphy, JD, CCEP
Urton Anderson, PhD, CCEP Marjorie Doyle, JD, CCEP ‑F
Society of Corporate Compliance and Ethics
6500 Barrie Road, Suite 250, Minneapolis, MN 55435, United States
www.corporatecompliance.org | +1 952 933 4977 or 888 277 4977
• Why a Code of Ethics?
• Structure of the Code
• How the Code of Ethics for Professionals can help in making tough
• How others are using the Code
• How to educate your team and your management on the Code
• Case studies
• The compliance officer as a whistleblower
Why a Code of Ethics?
• Promotes an ethical culture for the compliance
• Clarifies the compliance professional’s ethical
• Strengthens the compliance professional’s
• Sets expectations for those who rely on the work of
• Helps protect the public interest
• Provides guidance in resolving ethical dilemmas
Where did the code come from?
• HCCA Professional Code of Ethics (1999)
• Code of Ethics Development Committee(2007)
– JOE MURPHY
– REBECCA WALKER
– URTON ANDERSON
– MICHAEL HOROWITZ
– SHELLY MILANO
– MARJORIE DOYLE
• Principles: broad standards
1. Obligation to Public
2. Obligation to Employing Organization
3. Obligation to the Profession
• Rules of Conduct: minimum level of professional
conduct for CEPs
– 17 rules
• Commentary: clarifies/elaborates on the Rules
• Enforcement: primarily - CEP’s own
secondarily - peers & general public.
Obligations to the Public
Compliance and ethics professionals
(CEPs) should abide by and promote
compliance with the spirit and the letter of
the law governing their employing
organization’s conduct and exemplify the
highest ethical standards in their
professional conduct in order to contribute
to the public good.
• CEPs shall take such steps as are necessary to
prevent misconduct by their employing
both illegal acts and
Obligations to the Employing Organization
Compliance and ethics professionals
(CEPs) should serve their employing
organizations with the highest sense of
integrity, exercise unprejudiced and
unbiased judgment on their behalf, and
promote effective compliance and ethics
Obligations to the Profession
Compliance and ethics professionals (CEPs)
should strive, through their actions, to uphold the
integrity and dignity of the profession, to
advance the effectiveness of compliance and
ethics programs and to promote professionalism
in compliance and ethics.
The Case of the Fishy Fishing Trip
An employee calls, reporting that he was
invited by a senior VP to go on a fishing
trip with him that was paid for by a major
supplier. The general counsel says “it’s
not illegal, so don’t let it distract you from
the billing monitoring; just drop it.”
The Case of the Unknown Risk
Over that past week you have had several
meetings with the Head of Human Resources,
the Controller and the CFO regarding a notice
from the EEOC that a charge of discrimination
has been filed regarding the promotion and
compensation practices of the organization’s
finance and accounting departments. The notice
request of request asked that your organization
submit a statement of position, supply
information on personnel policies and permit an
Case 2 - The Case of the Unknown Risk
As compliance officer you report periodically to the audit
committee of the board and have in fact just meet with at
their quarterly meeting three weeks ago. Give the need
for the board to exercise reasonable oversight, which
you recall from the Caremark case implies that
“appropriate information as to compliance with applicable
laws will come to its [the board’s] attention in a timely
manner as a matter of ordinary operations,” you are
concerned that you should immediately notify the audit
committee chair regarding the EEOC notification. You
asked the CFO and she says to wait and just include it in
your next report to the audit committee.
The Case of the Perilous Inquiry
You are a lawyer in the compliance office. Senior
management asks you to investigate an allegation, but
not to second guess any of the prior judgments made
about this matter, and not to investigate all the instances
of alleged misconduct. You are also asked for advice
on whether the person who reported this matter could be
fired under the law. Your company’s code of conduct
prohibits retaliation for reporting suspected misconduct.
The Case of the Hackneyed CEP
You are already overworked in your compliance position.
Your boss says you are alienating some important
people in the company by your aggressiveness. You are
now told that you need to pick up responsibility for an
additional, time-consuming area involving contract
administration. A person from HR who has been doing
benefits work in the 6 months he has worked for the
company after graduating from college, will be
reassigned to help with compliance work.
The Case of the Compromising Spouse
Your spouse underwent a procedure in your medical
institution. A group of patients who had the same
procedure now are threatening to sue because of side
effects. Your spouse is having the same bad side
effects. Company legal counsel tells you to stay out of it
– it’s a legal matter. You request access to a
management meeting on this subject and are told you
are not necessary. Patients are claiming key information
was concealed. You have seen some internal
documents supporting this view.
The Case of the Muffled Orator
You are asked to speak at an SCCE
program. Your boss says “no, we don’t
want to draw attention to ourselves; the
compliance program is strictly an internal
The Case of the Twitters
As compliance officer for a pharmaceutical company you
are involved in the review of marketing practices for off
label marketing. The marketing department has begun
exploring social media such as Facebook and YouTube.
Several of its efforts you have found to be questionable
and have discussed them with senor management and
general counsel. Specifically problematic have been their
efforts to initiate viral, peer-to-peer marketing of several
off-label usages of one of the company’s most profitable
Case 7 - The Case of the Twitters
The marketing VP is adamant that there are no explicit regulations
or laws that they are breaking. Further, it is not the company that is
sending this information but others over whom they have no control.
You counter that clearly what they are doing would be violations if
done in traditional media or presentations by sales reps. Senior
management and the GC have sided with marketing and requested
that you restrict your review to traditional marketing.
The Case of the Broken Whistle
Helen is VP of Fraud Risk Management for a large financial services
organization. She supervised a group responsible for investigating
mortgage fraud and reporting fraud and suspicious activity to
regulators and the board of directors.
Helen’s team opened an investigation of several branches of the
northeast region after receiving a tip from a former branch employee
who had been fired after objecting to fraudulent practices. They
found widespread fraud and a number of branches were closed and
over 40 employees terminated.
Her team began to investigate other branches around the country and
were finding similar results. Further she believes Employee
Relations and Lending Managers were colluding to circumvent fraud
reporting channels to conceal fraud perpetrated by high-producing
loan officers and managers. Employees have been told by lending
area executives to report observed fraud and wrongdoing to
Employee Relations and not Helen’s unit.
Case 8 - The Case of the Broken Whistle
Employees that report allegations to Employee Relations seem to be
being transferred, demoted, harassed or even terminated. Helen has
asked Internal Audit to investigate these allegations of retaliation.
Meanwhile her company is being merged with another large bank.
Helen’s concerns have been concealed from the acquiring bank and
Employee Relations has been directed to investigate Helen.
The new management has sided with Employee Relations and has
offered her a severance package of $250,000 with the condition that
she remain silent on her allegations.
The Case of the Vanishing Whistle
In-Teng was a compliance officer with ABE China Ltd., a the Chinese
subsidiary of Q Corp - a large manufacturer of medical equipment.
In-Teng raised objections to alleged kickbacks the company was
paying related to equipment sales to army hospitals in China. He
provided documentation to support the allegations to Q Corp’s
China chief financial officer for healthcare.
Two weeks have past – In-Teng has been notified that he shouldn’t
report for work for the remaining three weeks of his employment
contract and that his contract would not be renewed.
How others are using the Code
How do you use the Code?
Educating your team and management on the Professional Code
• Incorporate in compliance function charter
• Refer in terms of employment or engagement
• Incorporate into position description
• Include the Code in organizational compliance
• Give copies of the Code to Board members and
Compliance officer as whistleblower???
• What does the law permit?
• What is ethical?
• What would you do?
Chief Compliance & Ethics Officer,
TAMKO Building Products
Marjorie Doyle & Associates LL C
University of Kentucky