An Investigation of Ethics Officer Independence

In this paper, we examine whether ethics officers are able to perform their assigned duties independently of organizational management. Specifically, we investigate whether inherent conflicts of interest with company management potentially hinder the ability of ethics officers to serve as an effective monitor and deterrent of unethical activity throughout the organization. As part of our analysis, we conducted 10 detailed phone interviews with current and retired ethics officers in order to determine whether practicing ethics officers feel the need for additional independence protection from management. We propose that the current system in which ethics officers report to management must be changed in order for ethics officers to effectively perform their jobs. Specifically, we maintain that ethics officers should (1) be hired by, (2) be fired by, and (3) report directly to the corporate board of directors rather than company management. Such a change in the reporting environment would greatly enhance the independence of ethics officers. W. Michael Hoffman, Ph.D., is the founding Executive Director of the Center for Business Ethics at Bentley College. He received his Ph.D. in Philosophy at the University of Massachusetts/Amherst, has authored or edited 16 books, and has published over 70 articles. In addition, Dr. Hoffman was the first Executive Director of the Ethics Officer Association and currently is the advisor to its board of directors. John D. Neill, Ph.D., CPA, is a professor of accounting at Abilene Christian University and has previously published articles in numerous journals including the Journal of Business Ethics, Journal of Accounting Literature, Accounting Horizons, Journal of Applied Business Research, the Financial Analysts Journal, and the Journal of Accounting, Ethics, and Public Policy. O. Scott Stovall, Ph.D., is an assistant professor of accounting at Abilene Christian University and has published articles in the Journal of Business Ethics, Journal of Applied Business Research, Management Accounting Quarterly, and The Journal of Accounting Case Research.