No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • 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
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • 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
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Ethics

Temperance — The Cornerstone of an Ethical Corporate Culture

by Jim Nortz
May 7, 2015
in Ethics
Temperance — The Cornerstone of an Ethical Corporate Culture

This article appeared previously Association of Corporate Counsel’s ACC Docket and is published here with permission from the journal.

Many years ago, an Operations Vice President knocked on my door and spoke the magic words that always get a corporate counsel’s attention: “We have a problem. Do you have a minute to talk?” Moments later, after we were seated at the conference table in my office, he explained that a mass-balance calculation on a chemical manufacturing unit in one of our Louisiana facilities suggested that we were exceeding our permitted emissions limit for hazardous air pollutants. Given the potentially serious implications of this discovery, I immediately booked a flight to New Orleans and commenced an on-site investigation into the matter the following day. At the conclusion of my investigation, I discovered that the situation was much worse than we initially feared. There were two manufacturing units responsible for these emissions, and one of them did not have an operating permit at all. Astonishingly, we had built and operated a chemical plant for over a decade, one that processed millions of pounds of hazardous materials a year, without a construction or operating permit. In addition, the permit for the one plant that was licensed to operate only allowed us to emit a few pounds of a hazardous air pollutant (HAP) from the facility on an annual basis. The investigation revealed that, between the two plants, we were emitting over 400,000 pounds of this HAP per year.

The upshot of this discovery was that we were operating in violation of a half dozen federal and state environmental laws and were facing significant fines and penalties — if not criminal indictments — if this came to light. Taking all the circumstances into account, we elected to shut the non-compliance unit down, self-report to the state and federal authorities and conduct a thorough investigation of air emissions from all the operating units in the plant. We spent the next year and over $1 million carefully examining every other emission source and then implemented systemic controls to ensure we did not repeat such a blunder in the future. Most would agree that we did the right thing. But, the thing is, we didn’t have to.

We had gotten away with violating the law for over a decade.

State and federal environmental regulators had come and gone and never detected any problem. We could have very easily ignored the concern raised by the plant and swept the issue under the rug, telling them: “It’s not perfect, but there’s no reason to take any action at this point to fix it. The regulators aren’t concerned. Keep production up and keep our customers happy.” Had we done so, I have little doubt that we never would have been caught, we would have generated tens of millions of dollars in additional revenue and we would have saved ourselves the expense of a yearlong air audit. By complying with the law, even when we did not have to, we were exercising the cardinal virtue of temperance (i.e., self-restraint or self-regulation), a habit of moral excellence that is a vital prerequisite to ethical corporate conduct.

Like stop signs on city streets, laws applicable to business don’t actually stop anyone from doing anything. They only influence behavior to the extent individuals choose to restrain themselves from violating them. It is true that you may rely on the cardinal virtue of prudence to comply with the law in circumstances where there is a high likelihood of getting caught or damaging your reputation in the marketplace. But temperance comes into play frequently because, like the millions who exceed speed limits every day, there are many circumstances in which companies can violate laws for years with little risk of getting caught. Our example of invisible air emissions at our plant in Louisiana is just one way that corporate “speeding” could go undetected in perpetuity. Others examples include private conversations with doctors promoting products for off-label uses, choosing not to tell a buyer about a product defect, failing to perform all mandatory corporate sexual harassment training, failing to comply with all applicable workplace safety rules, failing to fully comply with all aspects of operating permits, improper disposal of hazardous materials, making late payments on amounts owed to suppliers, failing to comply with all applicable data privacy laws and failing to maintain corporate records in accordance with all applicable record retention rules. To be sure, there are companies who have been caught and punished for violating such laws, but they are the exception rather than the rule. Many more “speed” and get away with it every day, and few, if any, can claim a perfect compliance record. Regardless of where your firm may fall on the scofflaw spectrum, one way you might improve your firm’s performance would be to speak openly about the importance of self-restraint in running an ethical business. The following are some steps you might take in doing so:

  1. Evaluate your own habits and consider the degree to which you may be failing to restrain yourself from “speeding” at work. Make adjustments as needed to be more temperate.
  2. Take an honest look around your firm and consider the degree to which your colleagues habitually step over the line in the interest of getting the job done. Consider responsive actions that might change the culture in the organization, or at least rein in the loose cannons.
  3. Consider whether your firm really has systems that are up to the basic task of knowing and disseminating information about applicable legal requirements. If not, propose cost-effective methodologies to remedy any shortcomings.
  4. Conduct workshops focused on the importance of temperance and integrate them into your routine business ethics training programs for employees and executives. Regardless of what steps you take, be mindful of the fact that temperance in a business environment is not a natural state. The pressure to get the job done in the most efficient and cost-effective way is an unrelenting force that can induce even the most conscientious employees to bend or break the rules. Consequently, sustained action is required to create a culture in which your colleagues are both expected and encouraged to do the right thing, even when no one is looking.

Previous Post

How Can Internal Audit Support the Growing Responsibilities of the Audit Committee?

Next Post

SEC Enforcement and Compliance Priorities 2015

Jim Nortz

Jim Nortz

Jim NortzJim Nortz is Founder & President of Axiom Compliance & Ethics Solutions LLC, a firm dedicated to driving ethical excellence by helping organizations implement effective compliance and ethics programs. Jim is a nationally recognized expert and thought leader in the field of business ethics and compliance with over a decade of experience serving multinational petrochemical, staffing, business process outsourcing, pharmaceutical and medical device corporations. Jim spent the first 17 years of his career as a criminal and civil litigator and Senior Corporate Counsel before becoming Crompton Corporation’s first Vice President, Business Ethics and Compliance in 2003. Since then, Jim has served as a compliance officer at Crompton and for five other multinational corporations, the most recent of which was as Chief Compliance Officer at Carestream Health. Jim has extensive experience in implementing world-class compliance and ethics programs sufficiently robust to withstand U.S. Department of Justice scrutiny. Jim is a frequent guest lecturer at the University of Rochester’s Simon School of Business, RIT’s Saunders School of Business, St. John Fisher College, Nazareth College and other law schools, universities and organizations around the country. Jim writes the monthly business ethics columns for the Association of Corporate Counsel Docket magazine and the Rochester Business Journal. Jim is a National Association of Corporate Directors Fellow, a member of the International Association of Independent Corporate Monitors and serves on the Board of Directors of the Rochester Chapter of Conscious Capitalism as the Board’s Secretary and Chair of the Governance and Nomination Committee. Previously, Jim served on the Board of Directors for the Ethics and Compliance Officers Association and the Board of the Rochester Area Business Ethics Foundation.

Related Posts

data breach

Sobering Reality: Drizly Order Indicates Officers May Face Personal Liability for Data Breaches

by Baker Donelson
February 1, 2023

The FTC says Drizly’s CEO James Cory Rellas was alerted to a potential security loophole two years before a data...

finserv whatsapp

WhatsApp, FinServ? Feds Seem Done With Grace Period on Messaging Apps

by Harriet Christie
February 1, 2023

A flurry of settlements with investment banks over use of unauthorized messaging apps makes one thing clear: The feds aren’t...

well being intentions

New Beginnings & New Understandings

by Lisa Beth Lentini Walker
February 1, 2023

As the calendar rolls into February, the percentage of us who have kept our New Year’s resolutions is likely pretty...

remote work

With Employees on the Move, Make Sure You Can See the Entire Map

by Jennifer Stein
February 1, 2023

About two-thirds of American employees work remotely at least part of the time. Ensuring compliance means more than just making...

Next Post
SEC Enforcement and Compliance Priorities 2015

SEC Enforcement and Compliance Priorities 2015

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Code of Conduct Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy 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
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • 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
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 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