Ethics vs. Compliance: Conflicts Can Undermine An Organization's Credibility

See this article about a major conflict of interest at the SEC that undermines its credibility in the Madoff matter:
http://www.washingtonpost.com/wp-dyn/content/article/2011/03/04/AR2011030406203.html

     In the case described above, the SEC official in question had inherited funds from Madoff accounts after the death of his mother.  He must have known this could, at a minimum, "appear" to taint his objectivity and credibility (and that of the SEC) if he were to participate in the investigation of the Madoff Ponzi scheme.  In fact, he went as far as to ask the SEC General Counsel for a legal opinion.  Unfortunately, he received bad advice, telling the official that there was no conflict of interest and that he could participate.

     Herein lies the difference between organizational compliance and values-based ethics. A strict interpretation of law yielded an opinion that the SEC official who cashed-in Madoff accounts inherited from his mother, and was the potential target of a lawsuit from other investors, could legally participate in the subsequent Madoff investigation. But ethically speaking, was this the right decision for the SEC? Legal or not, doesn't it undermine the credibility of an already embattled SEC with the Congress, the taxpayers, and thousands of investors who believe the SEC failed to do its due diligence in the first place?

     A world-class Ethics and Compliance Program goes beyond the minimal legal requirements and addresses both actual conflicts and the appearance of conflicts of interest, always assessing the organization's vulnerability to outside criticism that can undermine its integrity, credibility, and profitability. What kind of program does your organization have?