Ethics in a company and the supporting role of the legal department

Having just written about the ethics programs at Lockheed Martin (See my post of Oct. 3, 2008: four activities to promote ethical awareness.), I bestirred myself to sort through my posts on ethics and what’s been written here about expectations of the law department’s role.

Several posts propose that the legal group should not be responsible for a company’s ethics (See my post of Oct. 23, 2005: legal departments should pass the baton; Feb. 12, 2008: primary ethical responsibility lies outside legal department; June 22, 2008: ethics is outside core responsibilities of law departments; Dec. 22, 2005: law department relationships to ethics heads; Aug. 27, 2005: ethics not the responsibility of the law department; Sept. 10, 2005: Chief Governance Officers; Oct. 23, 2005: Krispy Kreme and ethics; July 17, 2008: remove ethics and compliance from the purview of the general counsel.).

Many general counsel, however, disagree. They believe the law department ought rightly be the company’s ethical fulcrum (See my post of Dec.19, 2005: role of BP law department in ethics training; Sept. 21, 2005: ethics responsibilities at Raytheon; Oct. 29, 2005 compliance and ethics; Aug. 27, 2005: reputational risk protector; Oct. 25, 2006: Genentech’s ethics training; Dec. 31, 2006: ethics and compliance reports to general counsel of Raytheon; and May 23, 2007: more detail on ethics structure at Raytheon.).

In any event, in-house counsel should promote ethics in the company and within the department (See my post of Oct. 31, 2007: Linda DiSantis on enlightened views of ethics; April 15, 2007: five key responsibilities of an ethics officer; Oct. 8, 2007: ethics assessments within law departments; and June 10, 2007: Code of Conduct for law department members.).

To the extent legal departments step into the ethics ring, they have many resources to help them (See my post of May 8, 2007: third parties who answer hotline calls; March 26, 2008: consultants on ethics and compliance; Jan. 17, 2006: Ethics Officer Association; Oct. 25, 2006: rebranding the association to the Ethics and Compliance Officers Association (ECOA); June 19, 2006: reporting systems; Dec. 19, 2005: BP’s hotline resource; Oct. 29, 2005: OECG survey on ethics and compliance; July 5, 2006: compliance and ethics software for training; and June 13, 2006: vendors of online training programs.).

Whatever the role of the law department vis-à-vis ethics, some people wonder whether an ethical company reaps the benefits of lower legal expenses (See my post of June 26, 2008: do ethical companies spend less on legal costs.).