On the occasion of L’Oréal group’s recognition as one of the most ethical companies on the global level, for the 10th time, Daily News Egypt interviewed Emmanuel Lulin, L’Oréal Group’s senior vice-president and ethics chief officer. The discussion tackled L’Oréal Group’s commitment worldwide towards ethics, and how the group has succeeded in implementing an effective ethical strategy at the workplace. The transcript for which is below, lightly edited for clarity:
The business ethics area is relatively new, so can we begin by defining what L’Oréal’s business ethics are?
Ethics is about the principles which we define for ourselves, in terms of how the company operates as well as how people behave within the organisation.
In the case of L’Oréal, it was a proactive approach, which started in 2000. L’Oréal was one of the first companies to establish a ‘Code of Ethics’ and appoint a chief ethics officer in 2007. L’Oréal articulates ethics around four ethical principles: integrity, respect, courage, and transparency.
These principles are expressed in the daily operations of our teams around the world and must be understood by all L’Oréal’s employees.
Hence, the role of this department is to contribute, educate, and train in order to reach ethical decisions.
Business is not merely a realm for profit maximising; it is also a human reality. As such, human excellence can manifest itself in the decisions and the conduct of individuals and organisations. L’Oréal is committed to highlighting ethics as essential to and at the core of its business activities and decision-making. The complexities of a global and dynamic business world, where non-economic and economic concerns coexist, give ethics a vital role in guiding human action, always with the potential for human excellence in mind.
Do you think the law follows ethics completely, as both of them are on the same track?
The law may be understood as the systematic set of universally accepted rules and regulations created by an appropriate authority such as the government, which may be regional, national, or international. However, it is not strictly the same as ethics; some things could be lawful in the eyes of the law, but might seem ethically awful. You can spot on the difference by asking yourself two questions “Do I have the right to do this?” versus “Is this the right thing to do?” Ethics prove that if an action could be the right thing to do, it still does not mean that you should do it
What are the roles and responsibilities of the ethics chief officer?
The roles are to make sure that we act properly, to make sure that managers are able to lead, to make sure that people take their responsibilities, to make sure there is a good equilibrium in both power and responsibility. Ethics help create good governance; it constantly reminds us of what we are doing. “Trust” is ethics’ most eminent benefit
If you want to measure the activity of an organisation, you can look at the financial accounts – regardless of the currency. When you want to measure the proficiency/efficiency of an organisation, you do not look at the market’s numbers; you look at a special currency called “trust”. We as an organisation need the trust of our consumers, clients, suppliers, shareholders and above all we need the trust of our employees. As a matter of fact, I perceive what I do as more of a duty than a job.
Are there any examples of ethical activities implemented at L’Oréal which you can share?
The deployment of L’Oréal’s ethics programme is based on three major levers.
First, there is a steering and a monitoring system which includes tools for ethical risk analysis and assessment, as well as a market reporting system and regular audits. Our strong commitment to ethics has drawn the attention of the public, as well as our investors and NGOs, it is therefore essential that it happens in a measurable way and we report our progress to external stakeholders. We measure ethics at the leadership and management levels for instance, evaluating how managers manage and their personal involvement to promote this culture of ethics. All managers have key performance indicators related to ethics. The board of directors and the executive committee look at our progress as they look at our business and financial performance.
The two other levers are awareness raising and engagement to promote the involvement of employees at all levels of the group on ethics and promoting a culture of dialogue and transparency, the “Speakup” policy.
Why is there only one central unit for ethics located in the headquarters?
L’Oréal’s headquarters is located in Paris, but we have L’Oréal’s ethics strategy and programmes that compromises about 75 ethics officers in every country we operate in, for example, in Egypt we have a L’Oréal Egypt ethical correspondent. We always seek maturity, listening skills, and public relations skills more than having multiple central units. What is interesting is that we decided to have ethics chief officers as a post than to have an ethics committee. We wanted to avoid the risk of jeopardising the value of an ethics committee
How should companies judge the success of their compliance efforts?
There are several ways to judge success. For example, when people say that they believe and trust in the company, or if they buy the company’s products, then the success is coming through its consumers. You can also say that success is achieved when investors consider your company to be sustainable, making them interested in buying shares
You can also judge from the employees as when there are employees who are interested in joining this company because they believe in the culture that the company stands for, which are the freedom of expression, safety, anti-bullying, anti-corruption, and anti-harassment. This is what I consider as a success.
We have zero tolerance for corruption and sexual harassment. We operate in 150 countries around the globe, but we address the issues head-on instead of sweeping them under the rug. We pride ourselves in communicating our problems internally using statistics. We openly share the cases with everyone and we highlight the problems that were handled, in order to be very transparent with our employees
Why is simply complying with the law no longer enough?
The issue is that the speed of technical and scientific innovation is much faster than the process it takes to create a legal framework. There is a gap in the market, and this gap is filled by our values. Abiding by the law is not the sole framework for decision-making anymore. It is better for companies to concentrate on the positive side of ethics rather than the negative side. It helps to create a culture of integrity and loyalty rather than conflict.
Are there any particular ethical issues which companies should look out for in the coming years?
I think that the concept of human rights is a very crucial topic in today’s world; it will become the key focus in every corporation. Corruption is a huge subject but I believe that human rights are more important and will most probably triumph in eliminating corruption. Human rights will be the next instrument of change. The increasing focus on human rights forces organisations to have a wider and a more integrated view of the local situation where they operate
Concluding, can you tell us more about the itinerary of your business trip to Cairo and what are the objectives you wish to accomplish?
This is my fifth or sixth visit to Egypt. We at L’Oréal are very optimistic about Egypt, and what I see is that L’Oréal Egypt is heading in the right direction on all levels.
For me, I hope that I can continue to implement our four principles of ethics at all of L’Oréal’s subsidiaries. I believe that businesses must pursue ethical policies in order to succeed. Today’s investors, shareholders, and consumers do not only expect strong ethical standards but also request them. People are becoming increasingly aware of the importance of human rights. Therefore, companies should ensure their supply chains are free from human rights violations and make sure that their products are ethically sourced.
