As keepers of the systems that ensure compliance, CIOs increasingly face moral challenges. Ethical expert Larry Ponemon answers real-life questions on how to resolve these dilemmas.

Ethical conundrums simply don't come up on the job, say 90 percent of the CIOs interviewed for this article. Ninety percent. You'd think that more CIOs would say they had confronted ethical dilemmas given the responsibilities they hold today, the regulations with which they now have to comply and the recent corporate scandals. But so few CIOs acknowledge ethical questions because many IT professionals don't believe their jobs involve value judgments, says Richard De George, a professor of philosophy and business administration at the University of Kansas who wrote the book The Ethics of Information Technology and Business. "A lot of people who work in this area [of IT] don't see any ethical problems. But just because they don't see them doesn't make them go away," says De George. "It only makes them worse."

"If a CIO says: 'I've never faced an ethical issue', they're not living in the real world," says Larry Ponemon, chairman and founder of the Ponemon Institute, a security and privacy research think tank based in Tucson, Arizona.

As steward for the systems that process and store customer, employee, financial, operational and transactional data, CIOs have to either acquiesce or take a stand when, for example, government contractors demand a company's customer lists to check for suspected terrorists (a la JetBlue) even though the demand violates the company's privacy policy. CIOs are also the go-to executive when the CEO wants erased a digital trail leading to his or her misconduct. These responsibilities can bring unwelcome culpability. For instance, last year Richard Causey, Enron's chief accounting officer, who had high-level authority over information technology, was brought up on charges of insider trading, securities fraud and falsifying financial statements.

With those scenarios increasingly common and with CIOs failing to acknowledge that their jobs involve complex decisions that often have a strong ethical component, CIOs are in dire need of a crash course in business ethics. To that end, CIO retained Ponemon to serve as your ethical compass. Ponemon holds a long list of credentials for this task. An adjunct professor of privacy and ethics, he created the compliance risk management practice at PricewaterhouseCoopers, which deals with business ethics issues, before founding his own company. Below, Ponemon provides answers to ethical dilemmas that are based on conversations with CIOs in a variety of industries, who were all granted anonymity in order to enable honesty and openness.

Q:My company is evaluating whether to send programming work overseas to cut costs at a time when we need to stay competitive. If we don't cut costs, we may have to retrench even more staff than if we just lost a few to outsourcing. Do we have a responsibility to our country to keep those jobs locally, or is offshore outsourcing just a dollars-and-cents, bottom-line driven business decision?

A:Your primary ethical consideration as a member of your company's management team is to keep the company competitive. If the outsourced vendor can do the job cheaper with the same or better quality, then move the jobs offshore. Your staff, however, will likely react negatively to this decision. The noble thing to do in that situation is help them find suitable work elsewhere or help them to reskill. This would go a long way toward mitigating their anger.