Soon after this, ABC experienced a business ethics crisis (not in the East Asia and Pacific region). An ABC official had broken the law while con- ducting business on behalf of the company. A large fine was levied against the company, and a lesser fine against the official in question. But because ABC had already made great strides in establishing and implementing a business practices program prior to this incident, the government merely stipulated that the company should bring its business practices program to fruition in a timely manner. The government acknowledged that this program would help the company prevent similar forms of corrupt behavior.
ABC’s anticorruption program is part of the company’s comprehensive global initiative to promote responsible business conduct throughout its operations and among its joint-venture partners. The company does not believe in having different business ethics programs for each region or creating a separate and distinct anticorruption program; it pursues a com- mon set of best practices throughout the world.
The business practices officer at ABC notes, “A successful business practices program—including a company’s efforts to combat corrup- tion—boils down to three main issues: successfully communicating, mon- itoring, and enforcing its standards.”
Throughout, the guide emphasizes the importance of maintaining accu- rate books and records and of complying with standard accounting pro- cedures. ABC believes that rigorous accounting procedures and policies can do much to ensure that the company avoids any form of corruption or detects possible forms of corruption.
ABC does permit facilitating payments under specific circumstances in some locations, but subject to stringent controls. Both the regional finan- cial director and the regional legal director must be consulted before a facilitating payment can be made on behalf of the company.
Implementation System
In the early 1990s ABC’s Board of Directors mandated the establishment of the Office of Business Practices to take responsibility for assessing the company’s business practice standards and monitoring its business prac- tices. This decision was influenced by the company’s core values study and the government investigation but also by such factors as market trends in business ethics and health care industry regulations and policy.
The company’s business practices officer reports to the head of the Legal Department, but in matters relating to business practices she reports directly to the ABC Board of Directors. She meets with the Board of Directors twice a year to report on the activities of the Office of Busi- ness Practices and to communicate any issues pertinent to business prac- tices within the company. If necessary, she can call an ad hoc meeting with the Board of Directors.
Regional Business Ethics Panels
ABC holds its managers responsible for:
• Serving as role models for the company’s values and standards
• Promoting responsible business practices
• Ensuring that employees feel comfortable talking openly about busi- ness practices issues
• Easing employee concerns about retaliation.
It is managers who are responsible for implementing initiatives or spe- cific program elements originating from the Office of Business Practices or from regional business practices panels.
The practices panels were established in the mid-1990s to provide sup- port for compliance at the regional level in this global and diverse com- pany. The panels are responsible for implementing the business practices initiative and any business practices programs that fall within their
purview. They are made up of senior management employees and of functional area employees (for example, representatives of the Human Resource Department or the Legal Department). The members are elected by the Office of Business Practices, which seeks a fair representation of countries within a geographic region. There are five regional panels: two in Asia and one each in Europe, Latin America, and North America. The chairperson for each regional panel reports directly to the Office of Busi- ness Practices, which in turn reports any substantive regional information directly to the Board of Directors.
According to the business practices officer,
This communications network on business practices has been extremely effective for our company. Instead of having one office in North America responsible for the business practices program, we have multiple partners who help ensure that we remain on track with regard to how we conduct business. Information flows smoothly from each region directly to our Board.
Communications and Training
In the early 1990s the Office of Business Practices developed an employee training program organized around vignettes on videotape that were used as a prelude to discussion. ABC managers were trained to deliver the pro- gram to employees. The program was made mandatory for all employees around the world, and management accepted the responsibility for track- ing and recording employee participation in it. (As a control measure, the company made these records subject to audit.) New employees were required to receive the business practices training within the first three months of joining the company. The training program has been extremely successful in the United States, but non-U.S. employees, including those from the East Asia and Pacific region, have often found it “too American.”
A new business practices training course for East Asia and Pacific relies heavily on discussion of typical situations that company employees expe- rience. The design reflects contributions of company staff from the region, to make sure that regional needs and concerns are covered. Employees receive training in their own languages. The business practices officer noted,
Not only should participants at a business practices workshop be able to understand what the facilitator is presenting; they must be able to engage actively in discussion of the key issues. We were asking our employees to participate in highly interactive training sessions, which had to be con- ducted in the participants’ own languages.
Scenario questions are printed in the form of a deck of cards, color- coded by difficulty, to make for an effective and flexible teaching tool. By selecting different sets of scenario questions, the program can be made relevant for any group of participants or redelivered to the same group of participants. The cards can also be used in other ways: for example, man- agers can use one or two cards from the set in staff training sessions or incorporate them in a regional company newsletter.
Another element of the training program that was well received among Asian employees was the conversion of the statements in the Business Practices Guide into specific principles. In this way, a general statement about the company’s policy on improper payments was reduced to sim- ple principles such as “Never offer money to a government official.” The business practices officer observed, “In rearticulating our standards with simplicity in mind, we were able to offer our EAP employees general statements about our policies and procedures that better addressed their expectations.” She also noted, “It is important to communicate to employees that they are not expected to know all the answers. However, our employees must know who would be the best person to go to for guidance.”
When the new training course for EAP was rolled out, the feedback from participants was overwhelmingly positive. In fact, the program was so well received by Asian employees that the company decided to use it in Europe and Latin America, where it has also gained acceptance.
The business practices officer observed,
That our colleagues in Asia both noted the need for and participated largely in the process of creating a training program tailored to the region is signif- icant. I think it demonstrates the level of commitment of our employees and indicates the ever-growing appreciation and importance of responsible business throughout the world.
Employees in certain EAP countries receive training annually; else- where, the cycle is somewhat longer.
Employee Certification
Every ABC employee around the world receives a copy of the Business Practices Guide and its updates, and each is asked to sign an acknowl- edgment card stating that they have received the document and have read and understood it. Managers are responsible for tracking and recording this information, which is subject to corporate auditing as a means of guaranteeing that all employees are receiving and reading the guide.
Each year, the Office of Business Practices requires that approximately 10 percent of the company’s management and sales force sign a disclosure asserting that they:
1. Have read the Business Practices Guide 2. Understand the Business Practices Guide
3. Are committed to the standards in their work lives
4. Are committed to promoting the standards among employees 5. Have not violated those standards in the past year
6. Have or have not encountered business practices issues.
ABC has found that having managers sign disclosure statements is an excellent method of reiterating the importance of the Business Practices Guide, the business practices program, and management’s leadership role with respect to the overall initiative.
Reporting and Warning Procedures
Since the late 1980s, ABC has maintained a telephone help line for employees on business practices issues. This is only of practical use for employees located within the United States.
ABC ensures that all of its employees in the EAP region are aware of the resources available to them for seeking guidance or raising a busi- ness practices concern. An employee may speak with any or all of the following:
• His or her direct managers
• A functional resource (human resources, legal, finance, and so on)
• A regional business practices panel
• The Office of Business Practices.
Every employee receives printed materials that list the relevant contact information for each of these corporate and local resources. Each of these resources is empowered to:
• Offer guidance on or interpret the company’s policies and standards
• Gather additional information from other resources on behalf of an employee
• Initiate or conduct a business practices inquiry
• Resolve a business practices issue
• Ensure employee confidentiality
• Protect an employee from retaliation.