Ethics complements compliance because the law cannot, does not, and will not cover every aspect of potentially harmful behavior.

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Ethics has been characterized as "doing the right thing" and as a motivational force that influences professionals' values, resembling a "carrot" approach to professional behavior.

Ethics as a Carrot Approach in Corporate Culture

Compliance is related to influencing behavior so that people act in accordance with the law or face consequences, a "stick" approach to behavior.

Compliance as a Stick Approach in Corporate Culture

OpenStax Principles of Management. Source pages used for organizational culture, corporate culture, and management topics. https://openstax.org/books/principles-management

Principles of Management - OpenStax

Ethical dimensions and practices necessary to motivate organizational behavior include transparency, privacy, honesty, objectivity, integrity, carefulness, openness, respect for intellectual property, civility, confidentiality, accountability, responsible mentoring, and respect for colleagues.

Ethical Practices That Motivate Organizational Behavior

Ethical values become "actionable" in corporations when corporations first become aware of, and then assume responsibility for, their duties toward stakeholders and stockholders.

Operationalizing Ethical Values Through Stakeholder and Stockholder Responsibility

Maintaining an ethical corporate culture requires both a values-based approach and a compliance approach. Studies show that ethical and compliance approaches are interrelated and work best together to motivate and sustain lawful and ethical behavior in organizations.

Dual Necessity of Ethics and Compliance for an Ethical Corporate Culture

Why Ethics Complements Compliance Beyond the Reach of Law

The federal Sarbanes-Oxley Act of 2002 set a new baseline of accountability for CEOs and CFOs. Following the Enron scandal and other corporate scandals, the law placed constraints and punitive measures on CEOs and CFOs who knowingly and willingly committed fraud and other crimes.

Sarbanes-Oxley Act of 2002 as a Baseline for CEO and CFO Accountability

Widespread corporate scandals led the U.S. Congress to implement legal and compliance standards intended to curb and discourage illegal activities in corporations.

Corporate Scandals as Impetus for U.S. Compliance Legislation

Self-regulation continues to play a major role in corporations "doing the right thing," while compliance has proven necessary but not always sufficient for corporate governance.

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