Most businesses thrive and grow based on the reputation that they set forth within the company as well as how they portray themselves in the marketplace. If they treat their employees and customers with respect, they often are a leader in their industry.

When it comes to controversial issues, however, a company is at risk of representing itself in a way that is deemed unethical. When this happens, employees start to leave, and customers go elsewhere to purchase goods or services.

Wondering why your company needs an ethics committee? Keep reading to find out.

What is an Ethics Committee?

An ethics committee is a group of people that are brought together from different departments within a company as well as third parties. The purpose of the committee is to ensure that the company complies with various rules, regulations, and policies within the business.

Including the various departments across the business means that everyone has a say in what goes on within the meetings. Additionally, bringing in an outside voice means that you have a non-biased person that is acting in the best interest of the company.

Keep in mind that a company that is focused on both employee relations and customer service is typically at the top of its industry. This is because it shows that they care about people and have a responsibility to act ethically.

What is the Role of an Ethics Committee?

While the main goal of the ethics committee is to review and ensure that the company is upholding the policies of the business, there are several roles that they take on. Because of this, it is important to know and understand what those duties are.

1. Annually Review Company Policies and Procedures

An ethics committee typically takes on the responsibility of making sure that the policies and procedures within a company are accurate and upheld. This means that they should take apart each policy annually to ensure that it is updated with the most accurate information.

2. Ensures Compliance with Company Policies and Procedures

Not only does the ethics committee review the policies and procedures regularly, but they should also ensure that everything is being followed. This requires more than just word of mouth but typically includes a compliance audit to be conducted.

3. Conflict Resolution

The ethics committee should also be in charge of creating certain policies and procedures that surround the conflict. This typically means that if an issue comes up whether it be internally with an employee or externally with a customer, the ethics committee can be consulted to help in resolution.

4. Discipline Management

In addition to the other duties of the ethics committee, they should also have a hand in all things related to discipline. This includes ensuring that management complies with laws and regulations concerning the discipline of employees.

What are Some Industries that Should Have an Ethics Committee?

Many industries today have an ethics committee that they use to help them stay in compliance with laws and regulations that surround their industry. This is also the case for their internal policies and procedures.

Check out some of the industries that are well known for having an ethics committee:

• The medical industry often has an ethics committee to oversee that compliance is being upheld in all things related to confidentiality and medical treatment.
• Law enforcement agencies are also known for putting an ethics committee in place to ensure that law enforcement officers and others are following policies. 
• Technology companies, especially those who use AI technology in the above-mentioned industries, use an ethics committee to keep them in line with laws and regulations.

While this is not an exhaustive list, it is intended to show you how other industries use their ethics committees and how vital they are.

Why Your Company Needs an Ethics Committee

Companies across a variety of industries need an ethics committee formed to help them stay in compliance with policies and procedures. This can include any internal and external laws, policies, and regulations that exist.

Here are a few reasons your company needs an ethics committee:

1. To keep the company in compliance

One of the most important reasons your company needs an ethics committee is to ensure that it stays in compliance with certain laws, rules, and regulations that exist. This can include those that are only within the walls of the company or those that exist within the industry.

Most companies have certain rules and regulations that are in place to protect the assets of the company. An ethics committee can review these rules and make sure that everyone within the business is following them.

Oftentimes, an industry falls under certain laws and regulations that were created by the governing party. An ethics committee can ensure that they are being reviewed annually and that the company is informed and in compliance with any new regulations.

2. To make sure that policies and procedures are ethical

Whether a company is just forming or they have been in business for many years, it is important to have policies and procedures in place. One of the roles of an ethics committee is to ensure that these policies and procedures are ethical and lawful.

An ethics committee’s first act is typically to review the policies and procedures that currently exist. This is to ensure that they not only make sense but that they are lawful and ethical.

Additionally, as they are reviewing these policies and procedures, they must also ensure that they do not contradict but uphold the regulations in place by the governing body. If they find policies that are not in compliance, they can then inform management to help them rewrite them.

3. To make sure that policies and procedures are updated regularly

Not only is the job of an ethics committee to review and ensure that policies and procedures are ethical and lawful, but they also have a responsibility to make sure they are updated regularly. This means that they must stay knowledgeable about the industry as a whole.

An ethics committee is usually well informed because the very nature of their job is to ensure that a company complies. Part of staying in compliance means that policies and procedures have to be updated from time to time.

This is typically done through annual reviews of company policies and procedures to make sure they are still valid. In addition, the committee should also keep an ear to the ground in the industry itself to watch for certain changes.

4. To protect the company’s reputation

The most important purpose of an ethics committee is to protect the company’s reputation. Because of this, they have a responsibility to make sure that they know everything that is going on in the company.

Since the committee is made up of department heads as well as outside parties, there is a good chance that nothing will be left out. Even though the third-party individuals may not know the day-to-day happenings, they should be updated regularly.

To protect a company’s reputation, an ethics committee must do everything they can to ensure that employees and management have everything they need. This includes updated policies as well as professional development opportunities that allow them to learn more.

5. To protect employees from unfair treatment

One of the jobs of the ethics committee is to make sure that not only operating procedures and policies are in place, but those that pertain to employees are as well. This means that they also must ensure employees are being protected from unfair treatment.

A review of the policies and procedures in place for a company should include those that concern employees’ rights and responsibilities. This includes job descriptions, discipline files, and various rules that have come into existence.

An ethics committee can ensure that employees are protected from unethical treatment by making sure these policies are up-to-date with the latest laws. Keep in mind that protecting employees from unfair treatment also protects the company from potential lawsuits.

6. To increase the overall morale of the company

Oftentimes when issues arise within a company regarding ethical issues, this can be seen in the overall morale of the employees. An ethics committee can be a great asset in investigating the reasons and solving them.

Since the ethics committee is charged with reviewing and ensuring compliance within a company, they can also pick up on various things that may be weighing the company down. This includes unethical practices that can endanger the company’s reputation and bring the overall morale of the company to an all-time low.

What are Some of the Requirements for those Serving on an Ethics Committee?

Before you begin to add people to your ethics committee, you should ensure that you have researched the most common requirements for them. These include people who have a stellar reputation as they relate to ethics in the workplace.

Keep in mind that the ethics committee does not and should not only include upper management. The chosen should be selected based on their reputation and should be from a variety of backgrounds and departments.

This means that while you might have a few members of upper management, you may also have members who are employees but not leaders. This will ensure that a large demographic of the company is being represented accurately.

Goals of the Ethics Committee

When it comes to the various goals of an ethics committee, it is important to keep in mind that the ultimate goal is to protect the interests of the company as a whole. This protection includes that the company is not only in compliance with the law but that their employees are safe as well.

Here are a few goals that you should keep in mind when forming your ethics committee:

• To protect the rights of all employees and customers
• To uphold the policies and procedures of the company
• To ensure compliance with governing bodies
• To create a safe environment for all employees and management
• To build the overall reputation of the company

Although these goals are common sense, having an ethics committee that oversees these areas is an important step in the right direction for many companies. 

What are the Benefits of Having an Ethics Committee?

The reputation of a company is what determines its future success overall and is often based on areas of business ethics. When a company is deemed as following ethical guidelines, then they are often seen as trustworthy and tend to do well in their industries.

Certain benefits of having an ethics committee include but are not limited to building a reputation within their industry that is free of backlash. This means that with a committee such as this onboard, they can protect themselves from any compliance issues.

Another benefit of forming an ethics committee within your company is that it builds trust from other employees to know that not only does it exist, but it is not made up of only upper management but also their peers.

Many employees take to heart the fact that their voices are being heard in terms of various policies and procedures within the business. When unfair practices are introduced, the committee has the opportunity to review them to ensure that it is within compliance with the company.

If your company is in the public eye, meaning that it is traded on the stock exchange, having an ethics committee can also be a great benefit. This is because investors typically like to do business with those who prove themselves worthy and ethical.

If a company is seen as not following ethical business practices, investors will typically go elsewhere to invest their money. This is why a company should have an ethics committee on board to ensure that they stay on top of their game.

Ready to Form Your Ethics Committee?

Now that you have a better understanding of what an ethics committee is and how your company can benefit, you should be ready to form your own. Keep in mind that creating your ethics committee should be a thoughtful process that is done carefully. 

If your company is experiencing high turnover rates, it may be time to create an ethics committee to ensure that there is not an underlying issue going on. Having a committee such as this can improve the overall morale of your company as well as make your company one of the top in the industry.