For those of you at the 2019 J.P. Morgan Healthcare Conference in San Francisco, we realize deals and investment news dominate the conference, but let’s take a moment to discuss ethics. Per our previous post where we discussed why ethics is now in the spotlight more than ever, the difference between ethics and compliance, proposed use of ethics officers, and why employees are pushing back against “bad” company actions, this post reveals an alternative to the use of an ethics officer - an ethics committee. The post concludes with how Venture Catalyst can help you with your company’s ethics needs.
Solution? Ethics Committees
Ethics is defined as a moral code that governs behavior, i.e., a company’s actions. A company has a responsibility to uphold the ethical values of the entire company’s community – including employees – and a top down approach of ethics from an ethics officer or chief executive does not work. The solution? We recommend an ethics committee, representing all facets of a company’s community, provide the ethical lens to guide the company’s business.
Ethics committees are typically used in medical/health care and research settings and can be repurposed for the tech/startup context. In a medical/health care setting, ethics committees are composed of members of the local community (e.g., hospital) who discuss the ethical issues that are associated with the health care, treatment, and well-being of a patient. The committee facilitates the decision-making process that incorporates and respects the patient’s concerns, values, and interests in order to recommend a solution that is acceptable to all stakeholders (e.g., patient, family members of the patient, physicians, and other members of the hospital staff). In addition, an ethics committee develops educational programming and policies for its institution, a valuable reference when similar ethical issues arise in the future. Finally, these committees are utilized to discuss new procedures before they are implemented.
In a research context, an ethics committee is usually referred to as an institutional review board (IRB), which evaluates proposed research protocols that involve people as research subjects. Members of the IRB are often members of the populations likely to be studied in research or individuals who have conducted research with these populations. The IRB is an important institutional safeguard to protect vulnerable populations from unethical research. IRBs evaluate all aspects of a research protocol, including recruitment, potential benefits and risks, and disclosure of results. Revisions to the protocol are almost always required by the IRB and result in a more robust and better protocol. Incorporating changes before the research begins ensures the well-being and safety of participants. These committees provide important guidance to researchers about the conduct of appropriate research and also encourage public confidence in research because the public can be confident that only ethical research protocols move forward.
Interestingly, IRBs are the most robust example of ethics committees incorporated into US law (it can be found in the Code of Federal Regulations 45 CFR 46, if you’re interested). This also means there is a large and fully developed community of practitioners who are well versed in setting these up and operating them.
An ethics committee for a tech company/startup can incorporate various aspects of the medical/health care ethics committee and IRB. Incorporating an ethics analysis by an ethics committee helps to protect companies from bad actions. Below are ten big picture recommendations for developing an ethics committee for tech/startups:
There should be an overall plan for ethics, called an Ethics Oversight Plan. The plan should lay out the structure, authorities, responsibilities, and relationship between internal stakeholders as it relates to ethics. This will ensure that all parties are clear on their role(s) and that there is a formalized commitment to ethics at the organization.
Ethics committee members should be from different parts of the company. Incorporating as many facets of the company’s “community” into the ethics committee helps to ensure that the company’s actions reflect the ethical code of all its employees. Representatives from legal, compliance, diversity, marketing/communications, coding/programming, IT, human resources, finance, operations, privacy, security, etc. are all integral members of the corporate “person”. These individuals provide differing perspectives to address complex topics to ensure that the company community’s ethical principles and values guide business decisions. Importantly, both experts and non-experts should be involved.
As many divisions of the company as possible should have one seat on the ethics committee. To account for availability, have members and alternate members such that any one of these individuals may sit on the committee when an ethics committee meeting is convened.
At least one member of the ethics committee should be a person not affiliated with the company. This person(s) should be knowledgeable about/experienced with working with the population(s) most likely affected by the the company’s product/process, etc. An “outsider” from the public provides an additional safeguard to the company by not being financially dependent or tied to the company. This person would be required to sign a non-disclosure agreement to protect proprietary information.
Members of the ethics committee should receive mandatory ethics training. All members should understand the purpose, role, and function of an ethics committee and one person should be appointed the chair of the committee. While all individuals have their own code of ethics they live by, it is helpful to have training on how to perform an ethics analysis and facilitate building consensus on sensitive and controversial topics. A formal process, e.g., forms, definitions, system, should be in place to help with the analysis. Training should be rigorous, e.g., similar to training required for IRB (research) committees, which have extensive requirements.
The ethics committee should have the authority to stop bad actions of the company. It should be able to rein in a corporation’s psychopathic tendencies. Without authority, the ethics committee is simply window dressing, and the status quo remains. Because the composition of the committee consists of multiple divisions of the company, individuals on the committee represent the company. The committee’s decisions reflect the company’s membership and ethical values, which makes it difficult to ignore. While some companies may still choose to ignore the ethics committee, citing “business decisions”, incorporating ethics into a business decision often leads to a more successful outcome. At the very least, the company should revise its proposal/project/action to reflect the recommendations of the ethics committee.
The ethics committee should report to the chief executive of the company and to the board. Reporting to both entities helps to ensure that even if the chief executive attempts to ignore the committee’s recommendations, the board becomes a safeguard to prevent bad actions, and vice versa. While compliance and ethics may not always completely align, in most circumstances it is in the best interest of the company to be both compliant and ethical. In certain situations, board members can be held personally liable for actions of the company, therefore it is in members’ best interest to ensure that the company is at the very least aware of any potential ethical quandaries in order to address them.
The ethics committee should be convened on a regular basis to discuss upcoming projects. Incorporating ethics at the inception and throughout a new project will result in a better outcome. Potential landmines be be addressed during the development phase, instead of a last-minute patchwork fix. An ethics analysis helps identify the gaps that need to be addressed in order for various stakeholders to accept the project. This model of incorporating a key perspective/component from the beginning is similar to concepts such as Security by Design or Privacy by Design, where security or privacy is built into products or programs from inception because it is less expensive, easier, and more efficient to build it in rather than try to attach it to the end where it never works as well. Thus, an “Ethics by Design” model follows the same idea. Rather than have an ethics analysis near the end of a project when it is close to completion, it would be more efficient to have the ethics committee weigh in on the project at its inception and throughout the project.
The ethics committee should be tasked with developing the company’s code of ethics. While a company may have a mission statement, the mission statement may or may not reflect the company’s ethical values and code. A separate and specific ethics code for the company not only defines the company culture, it also addresses how ethics would be implemented throughout the company and how to address situations when concerns arise, and in rare circumstances where ethical lines are crossed. The implementation aspect of an ethics code is critical, since it provides a mechanism for employees to have their concerns about potential ethical breaches addressed in a timely and proactive fashion. These policies provide important guidance to the company and help ensure that only ethical proposals move forward while mitigating risk.
The ethics committee should be convened in emergency situations. In some cases, there may be situations where, despite the best intentions of the company and its ethics committee, a crisis develops and a response from the company is necessary. While many companies will rely on an external PR team for messaging, it would be beneficial for the company’s ethics committee to weigh in as a primary analytical and solution providing body. Any lapses in oversight would ultimately fall on the ethics committee, so being part of any response is appropriate.
Location, Location, Location
From an operational perspective, where should an ethics committee be housed? Legal, compliance, diversity, or human resource divisions are often mentioned as possibilities. While all of the above often incorporate ethics as part of its responsibilities, none of these locations are appropriate. Legal and compliance are too focused on meeting requirements and checkboxes, not about discussion. Housing an ethics committee within these divisions would be like setting up a bustling coffee shop in the middle of a research library. Another option is to house the ethics committee within the diversity department. This makes sense since diversity issues are about inclusion, discussion, and moving beyond a hetero-normative view of the world and workplace. Unfortunately, this option is also not a good fit because most companies have fledgling diversity departments that have minimal support and resources, and are frequently not included in the critical path for decision making. In addition, ethics encompasses more than diversity issues, making the scope broader than diversity and inclusion. Finally, human resources may appear to be a good fit, but as many of us have experienced or witnessed, at the end of the day, human resources may appear to serve the employee, but in reality almost always lack true independence.
An ethics committee belongs in its own group that overlaps legal, compliance, diversity, and human resources, but is independent. A stand-alone ethics group sends a powerful message to the public and to employees of the company. It tells all stakeholders that the company is attuned and sensitive to ethics and that business decisions are guided by diverse representatives of the company who are dedicated to promoting ethics within the business. The public can be confident that ethics is incorporated every step of the way. Employees have a mechanism to raise their concerns and be part of the discussion and solution.
Getting It Started
Many early stage companies may not have the resources to fully invest in a stand alone ethics department. Many of these startups may not have departments for legal, compliance, HR, etc. and instead outsource these responsibilities. For these companies, we recommend using an ethics committee model which is temporarily located within an existing department purely for logistical and budgetary support, but reports to the chair of the board and the chief executive. Again, we acknowledge that many of the above suggestions may be challenging for small companies, but can still be fulfilled with commitment and creativity.
Interested in Learning More
Finally, if you are interested in learning more about how we can help you develop an ethics plan, train employees, and start up an ethics committee for your company, please contact us. We have extensive experience creating and working with ethics committees in early and growth stage companies. We help align the company’s goals and deliverables to not only be ethically sound but also business savvy and know how to grow your institutional knowledge as you grow your company.
With expertise in bioethics, regulatory issues, strategy, information and cyber security, privacy, digital health, big data, and research, we are uniquely positioned to help our clients both in the short- and long-term. Our clients attest that we help them identify and solve their immediate needs and help them anticipate and address future challenges by creating learning organizations that maintain the culture of the company throughout the growth phase of the business.
Wrapping Up
Our main wish here is for people, companies, and conferences, especially those in the healthcare and tech industries, to focus early and often on ETHICS. Let’s not wait for the next Theranos to take action. Let’s be proactive and ethical NOW.
Key words: ethics, ethics committees, ethics officer, Silicon Valley, startups, unethical corporate behavior