Corporate governance and HR ethics: case insights on compliance programs

Abstract This study examines how compliance programs operate as governance mechanisms, shaping the ethical conduct of human resources over time. Drawing on Michel Foucault’s conceptualization of ethics, the paper analyses how different configurations of compliance practices influence employees’ moral subjectification. The study adopts a qualitative case study approach, based on 19 semi-structured interviews with organizational members holding governance, leadership, and operational roles in a pharmaceutical company operating under the Italian Legislative Decree (LD) 231/01, complemented by documentary analysis. The findings reveal a two-stage process. In the initial phase, the compliance program functioned primarily through the technologies of government, emphasizing control, monitoring, and sanctions. These mechanisms constrained employees’ discretion and fostered compliance, driven by fear of punishment rather than ethical engagement. In the subsequent phase, changes in leadership practices—particularly the role of the Compliance Officer—reoriented the compliance program toward enabling technologies that supported ethical reflection, autonomy, and self-regulation. As a result, employees increasingly perceived compliance as a resource for responsible decision-making rather than a coercive constraint. The study contributes to the governance literature by showing how the same compliance framework can produce different ethical outcomes, depending on how governance mechanisms are enacted and interpreted. This highlights the critical role of leadership in aligning control systems with the development of ethical self-governance.