Good and Bad Regulation: What is Ethics and Compliance Role?

Good and Bad Regulation: What is Ethics and Compliance Role?

I read this example in Yuval Noah Harari book “Sapiens: A Brief History of Humankind”. This is the extraordinary example when corruption helped the humanity.

In Nazi Germany it was “non-compliant” to let Jewish children out of prisons. The legitimate orders of those days and supporting legislation were to kill them. Not a very friendly regulation, right? But it was something that “compliance” SS squads ensured everybody followed. Ethics of those days could not help much either, as the predominant moral view in German society was fascism. The officials who, in spite of cruel laws, helped to free those kids and saved their lives, without the doubt did the right thing. But from perspective of those days, they were corrupt criminals.      

This was a vivid illustration of bad regulation in a society. One can say, however, that those days have gone. But there is no guarantee that similar situations do not and cannot realistically occur within other countries or even corporations of today. In fact, if we look at the FCPA enforcement track record I would not be very positive at all. In these circumstances, in my view, it is the job of the new generation stewards of Ethics and Compliance to stand strong for ethical rules. But how to effectively oppose unethical regulation within a corporation or even a country when you are not being heard? Will you agree that, it may be difficult to express opposite views to those in power?

Here is where we can learn from the human rights’ expert. Famous Martin Luther King Jr. not long before being killed shared with us the following thought: “I think we all have a moral obligation to obey just laws. On the other hand, we have moral obligation to disobey unjust laws, because non-cooperation with evil is as much a moral obligation as is cooperation with good.

After these words I thought who he thinks he is to judge what is just or unjust, but after listening further I changed my opinion. He continued and set out criteria how one should non-comply with unjust laws: “He must do it openly, he must do it cheerfully, he must do it lovingly. He must do it civilly, not uncivilly and he must do it with willingness to accept the penalty…”, basically to attract attention to this unjust law and influence people with this fact to change it.

So, it seems that this is it. This is the formula for Ethic and Compliance professionals to act against unjust regulation (verbal and written) in corporations – an open, cheerful and loving disagreement and a willingness to accept the penalty. But what if this does not work out well? Before I conclude I will leave you here with 3 pessimistic scenarios that a compliance professional may encounter.

(1)  Scenario 1. This is the worst one. You sit quietly not seeing the problem in a company until you are fired or jailed or both. When the situation happens you will be easily blamed by the same people who asked your approval and expressed unhappiness because of disagreement. In addition, you will definitely come as a suspect. Because seeing something and not doing anything is nothing else but covering the wrongdoing.

(2)  Scenario 2. This is the 2nd worse. You get discredited by the organization you used to be part of. Your peaceful disagreement will be interpreted as a threat, while your behavior as hard or soft skill gap. Of course, it does not go as brutal as during old times when might leaders opposing those in power could end as Jesus, Gandi or King. But you can probably expect your reputation harmed and portrayed as difficult person or incompetent. This may ruin your career in this area as other companies may not be willing to provide you with an offer letter any more.

(3)  Scenario 3. You resign and find another job. Point R.1.4. of the Code of Professional Ethics of Compliance and Ethics Professionals requires you to consider resignation. Not much I can say here. I hope that this will make an impact and your move will deliver the right message. This is not that bad outcome, unless you are unable to find another appropriate job. In such case it will be a sacrifice in the name of ethics and compliance and your personal safety. You can become even poor and miserable but standing strong on your values.

In conclusion, I want to summarize and stress on the 2 points highlighted here. First, it is your job to challenge unjust regulation. Second, you have to take care of yourself. If you keep control over these things you will be just fine.

Until next time and hope you find this useful.



Pavlo is a regional Legal and Compliance Head with a global pharmaceutical company. He leads Legal and Compliance function in CIS & Romania as a part of Emerging Markets business region.

He got his LL.M. degree in International Business Law from Tilburg University, the Netherlands. He also graduated from Ukrainian university with a Master degree in Commercial Law.

Pavlo is an attorney at law admited to Ukrainian Bar, and a certified compliance professional (CCEP-I). Pavlo has been recognised in 2016 as the best Compliance Officer by one of the most reputable Ukrainian legal publisher (Yuridicheskaya practica).