Apology tours, the realities of whistleblower retaliation, and ethical changes across the globe
Each week, Convercent will highlight some of the top stories and most newsworthy events in the ethics and compliance industry. The focus is global, but you might be surprised by how relevant these stories are, both across borders and businesses.
Tesla’s CEO has made some notable gaffes in recent weeks. However, several sincere apologies to the Wall Street analysts he offended seem to have calmed investor nerves. When Mush took responsibility for his behavior on last week’s quarterly earnings call, Tesla’s market value increased by more than $5 billion in after-hours trading.
This might be an extreme example of the benefits gained when a CEO accepts responsibility for improper behavior, but it is an important lesson to remember.
Before the Wells Fargo account scandal became national news in 2016, Jessie Guitron knew her colleagues were committing fraud. When she complained about the behaviors, her status as a whistleblower, “put a target on her back.” She was eventually fired. Guitron later filed a lawsuit claiming the company fired her for speaking out against the fraudulent practices she observed. .
Guitron’s story, and the stories of other whistleblowers, will be shared in episodes of a new show titled Whistleblower. It’s a dramatic new show on CBS, and you can watch it here. As you can see, ethical matters continue to gain exposure in the media. Retaliation is a very serious issue, as the show demonstrates.
The Ethisphere Institute’s research has found that companies included on their World’s Most Ethical Companies list outperformed the large-cap sector over a five-year period by 10.72%.
Ethisphere Chief Executive Officer Tim Erblich explains, “When we initiated the World’s Most Ethical Companies honoree list in 2007, phrases like ‘corporate ethics’ and ‘corporate social responsibility’ were buzzwords that companies only said in a press release. Today, we see more and more signs that these phrases are now part of the everyday lexicon from the boardroom to the field, and we are proud to honor those companies that best represent this important ethical evolution … Businesses that act with purpose, integrity, and responsibility are a beacon for others to follow.”
Speaking of acting with purpose, integrity, and responsibility, our CEO Patrick Quinlan recently sat down with Fortune to explain why it’s so important to let employees know their voice matters.
From a leadership standpoint, the risk of an ethics scandal is too high to ignore. As Patrick explains, the court of public opinion now holds corporations accountable for saying one thing and doing another.
Kenya Association of Manufacturers (KAM) has partnered with the University of Nairobi (UoN) to, “develop strategies that promote ethical and legal business practices within the private sector. This partnership seeks to highlight the impact of corruption on the social and economic growth of the manufacturing sector.”
Operating with ethics is gaining importance throughout the world, and legislation in one country often influences how other countries treat issues like corruption. In fact, a High Court Judge, Justice Hedwig Ongudi, “emphasized the need to identify corruption, as a major constraint to the development of the country.”
New laws are set to get tough on foreign corporate bribery and place increased responsibility for compliance with directors.
Australia is also revamping some of it’s anti-corruption laws: “Proposed new laws to prevent foreign bribery by Australian companies are set to place greater onus on directors to take steps to prevent, detect and respond to potential corruption. The Crimes Legislation Amendment (Combating Corporate Crime) Bill 2017 (Cth) shifts the responsibility onto companies to prevent foreign bribery.”
Since we know that legislation in one country often impacts the regulations that other countries eventually implement, it’s safe to speculate that the FCPA may have influenced Australia’s approach.
IBU adopts Code of Ethics, considers bidding proposal for World Championships
In June, the International Olympic Committee (IOC) moved to, “suspend all direct financial payments” to the International Biathlon Union (IBU) after a raid was completed in April. The IBU has not released information about what exactly the Austrian Federal Criminal Police was searching for — they simply stated that the investigation was “focusing” on the organization’s two leaders (who had led the IBU since its formation in 1993). Allegedly, the IBU’s senior leadership accepted $300,000 (€254,000) in bribes for, “adopting a favourable stance towards Russian athletes caught up in doping infringements.”
As a result of the investigation, the IBU has, “continued on its path of reform” by approving an amended Code of Ethics, while a proposal has been put forward for a new bidding model for its World Championship.