BUSINESS ETHICS PRIMER
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HISTORICAL PERSPECTIVE
U.S. Ethics Programs:
While some U.S. companies have had a form of business ethics program for
many years, most of them developed their business ethics programs as a
result of such legislation as the Foreign Corrupt Practices Act and the
1992 U.S. Federal Sentencing Guidelines. U.S. companies – particularly
large multinational corporations – sought to develop internal policies
and procedures to abide by these legislative actions. The Sentencing Guidelines,
in particular, serve as an incentive for companies to establish business
ethics or compliance programs. Companies that have established effective
ethics programs are, under the Guidelines, penalized less harshly if found
guilty of corporate wrongdoing. According to the guidelines, an effective
business ethics or compliance program consists of seven elements, including:
• An individual in charge of the ethics function
• Written standards of conduct
• Employee training on the code document
• A hotline for whistleblowers
As a result of the Guidelines, most U.S. business ethics programs tend
to share a number of common features, which may or may not represent the
optimal components for any given company’s business ethics program.
Ethics Programs in Other Regions:
Outside the United States, companies have typically not had the same pressure
or been offered similar incentives to establish business ethics or compliance
programs. In recent years, more and more countries have been enacting
similar legislative acts, particularly involving bribery issues. For example,
the ratification of the Organisation for Economic Cooperation and Development’s
Convention on Combating the Bribery of Public Officials means that legislation
will be created in every country that ratified the Convention. How corporate
business ethics programs in other parts of the world will be affected
by such legislation remains to be seen.
Business ethics will likely emerge differently in every region where
it is cultivated. In Western Europe, programs have tended to concentrate
on corporate and social responsibility. In regions with high levels of
corruption – like Africa, Asia and Eastern Europe – business
ethics efforts have been distilled into programs designed to combat corruption.
The field of business ethics is vast and one that is still quite young.
As we move forward, we are apt to see the field grow and, at times, evolve
– engendering many different types of programs and initiatives.
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