No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • CCI Magazine
    • Writing for CCI
    • Career Connection
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
    • Great Women in Compliance
    • Unless: The Podcast (Hemma Lomax)
  • Research
  • Webinars
  • Events
  • Subscribe
Jump to a Section
  • At the Office
    • Ethics
    • HR Compliance
    • Leadership & Career
    • Well-Being at Work
  • Compliance & Risk
    • Compliance
    • FCPA
    • Fraud
    • Risk
  • Finserv & Audit
    • Financial Services
    • Internal Audit
  • Governance
    • ESG
    • Getting Governance Right
  • Infosec
    • Cybersecurity
    • Data Privacy
  • Opinion
    • Adam Balfour
    • Jim DeLoach
    • Mary Shirley
    • Yan Tougas
No Result
View All Result
Corporate Compliance Insights
Home Ethics

Ethics is Key to Filling Growing Gap as Technology Outpaces Regulation

L’Oreal Sets an Example by Focusing on Ethics

by Henry Engler
June 25, 2019
in Ethics, Featured
light bulbs reading "ethics honesty integrity"

Thomson Reuters’ Henry Engler shares insights from an interview with L’Oreal Chief Ethics Officer Emmanuel Lulin on the corporation’s approach and commitment to ethics. Leaders from all industries could take a cue from L’Oreal with respect to how to embed ethics into the fabric of the organization.

Rapid innovation in the business world and an inability for regulation and law to keep pace means that companies need more than ever to place a higher premium on ethical behavior, Emmanuel Lulin, Chief Ethics Officer for L’Oreal, the French cosmetics giant, told Regulatory Intelligence in a recent interview.

L’Oreal, a 110-year old company whose operations span the globe, sees ethical behavioral among its executive leadership, employees and suppliers as a necessary component for the company’s long-term business success, said Lulin. In his chief ethics role, which he has held for the past 11 years, Lulin reports directly to CEO Jean-Paul Agon.

Technology is central to this cultural change. In Lulin’s view, the world in which companies now operate has changed to such a degree that no company can afford to ignore ethics as a core part of its principles and management oversight. Technological innovation has created a gap between new and emerging issues that companies face and the regulations to deal with them.

“Traditionally, every time there was an innovation or discovery, the law would come in to give a framework. Today, on a number of subjects the law is insufficient or too late or nonexistent,” said Lulin.

“I think the key criteria to distinguish a slightly more ethical organization from a slightly less ethical organization is sincerity.”

“When the speed of technological and scientific discovery is faster than the speed of legal production, it has two consequences: the relative importance of law decreases and the relative importance of ethics increases… because we have to make a decision. And how do we make decisions? According to our ethical values,” he said.

Ethical Failures Trigger Rising Number of CEO Departures

The importance of ethical behavior has been amplified for those at the top of the management pyramid. Strategy&, the consulting arm of PwC, recently released its latest survey on CEOs, with the results showing that the turnover rate at the top of the world’s largest 2,500 companies reached 17.5 percent in 2018, the highest since the survey started in 2000.

While about 75 percent of these departures were internally planned and only about 20 percent were “involuntary,” like firings, the reason for the dismissals has changed. A decade ago, half of all exits were triggered by poor financial performance and less than 10 percent by “ethical lapses,” PwC said. In 2018, however, 39 percent of departures were due to ethical issues, such as “fraud, bribery, insider trading, environmental disasters, inflated resumes and sexual indiscretions,” while bad financial performance only accounted for 35 percent.

In Lulin’s view, these new challenges go beyond the abilities of traditional human resource and compliance functions and require firms to focus on the integrity and the sincerity of their dealings with customers and employees. “I think the key criteria to distinguish a slightly more ethical organization from a slightly less ethical organization is sincerity,” Lulin said. “It is the sincerity with which we walk the talk. It’s not compliance, because compliance just asks us to obey what the law asks us to do. Ethics is not about obeying — it’s about agreeing.”

Ethics Becomes Differentiating Factor for Companies

In the tech world, companies such as Facebook and Google have spawned ethical issues that were unthought of 10 years ago. All of this is new terrain — often well beyond the scope of current legislation and regulation — leaves many countries trying to catch up quickly.

But until the technology gap is closed — and Lulin believes the pace of innovation will always be a step ahead of rules — the ethics and culture of large organizations, and whether they are acting in the interests of their customers, has become more of a deciding factor in long-term viability and success. “When you want to measure the performance of an organization, you traditionally look at their accounts. But the accounts have nothing to say about what I see as the most valuable asset, which is a company’s culture of integrity, its ethics. The value of the culture of integrity is nowhere found in the accounts. And it is probably one of the best indicators of a company’s sustainability,” said Lulin.

Annual “Ethics Day”

Integrity, respect, courage and transparency are the four guiding principles of how L’Oreal operates. A key element running through the four principles is trust.

“Every time there was an innovation or discovery, the law would come in to give a framework. Today, on a number of subjects the law is insufficient or too late or nonexistent.”

“When you take an ethical approach, the first message is a message of trust — trust in the intelligence of the people you are working with,” said Lulin. He took a dim view of a rules-based corporate environment, where employees are under constant surveillance. He also showed little enthusiasm for executive performance reviews, which might hold back bonuses or compensation if a manager was found not to have displayed the type of behavior in line with a firm’s values. In Lulin’s view, one can’t be “75 percent ethical.”

As an example of the importance placed on ethics at L’Oreal, the company holds an annual “Ethics Day,” when employees worldwide can ask questions online to CEO Jean-Paul Agon, who responds in real-time and without any censorship, according to Lulin. The company has been holding the companywide conversation for the past 11 years, and it has worked so well that it has been rolled out to regional managers.

In addition to “Ethics Day,” there is a robust, mandatory training program for all 86,000 employees, not only managers. The content includes interactive e-learning modules, presentations and in-person training. The training focuses on practical, real-life examples of ethical dilemmas designed to engage employees to make choices about how they would respond in certain situations. If their course of action is not properly aligned with the company’s core principles, the employee is guided to a better solution, said Lulin.

L’Oreal also has a rigorous corruption prevention program with similar training content that gives employees the tools to make the right decisions if they encounter a situation where someone tries to persuade them to engage in corruption.

This article was originally shared by Thomson Reuters Regulatory Intelligence and is republished here with permission.


Tags: Culture of Ethics
Previous Post

D&B Survey Reveals 1 in 5 Businesses Loses Revenue and Customers Due to Incomplete Data

Next Post

It’s Not Me, Just Look Around: Social Norms and Noncompliant Behavior

Henry Engler

Henry Engler

Henry Engler is Thomson Reuters' North American Regulatory Intelligence Editor in New York. He comes to Thomson Reuters after a decade in the financial industry, in which he served in roles as an executive or managing consultant overseeing compliance-related and other projects. These include projects in Dodd-Frank swaps reporting requirements, TRACE reporting, data requirements, tax and accounting matters, AML systems and employee transaction monitoring. He has worked for firms including IBM Global Business Services, Morgan Stanley and RBS Capital Markets. Henry is a trained economist and has also served as a financial journalist and business strategy executive at Reuters. He has edited books on the European Monetary Union and the future of banking.

Related Posts

no right answer

That ‘Do the Right Thing’ Mug? It’s Missing Some Fine Print.

by Vera Cherepanova
May 20, 2025

Ethics isn’t a slogan; it’s a practice

LRN 2025 Program Maturity Global Study

2025 Global Study on Ethics & Compliance Program Maturity

by Corporate Compliance Insights
May 16, 2025

How does your ethics and compliance program measure up? Global study Ethics & Compliance Program Maturity What’s in this global...

LRN E&C Program Effectiveness in Financial Services

Ethical Gaps in the Financial Services Sector

by Corporate Compliance Insights
April 11, 2025

What ethical gaps might be lurking in your organization? Insights From 2025 Benchmark Report Ethical Gaps in Financial Services What’s...

superhero cape in shadow

Change Is in the Air: Answering the Call for a Hero

by Lisa Beth Lentini Walker
March 24, 2025

Knowing when to step forward and when to step back defines true compliance champions

Next Post
compass on profile of man's head

It’s Not Me, Just Look Around: Social Norms and Noncompliant Behavior

No Result
View All Result

Privacy Policy | AI Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Research
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2025 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT
No Result
View All Result
  • Home
  • About
    • About CCI
    • CCI Magazine
    • Writing for CCI
    • Career Connection
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
    • Great Women in Compliance
    • Unless: The Podcast (Hemma Lomax)
  • Research
  • Webinars
  • Events
  • Subscribe

© 2025 Corporate Compliance Insights