Diversity, Ethics, and Law: National and International Realities 1

Diversity, Ethics, and Law: National and International Realities 1

Diversity, Ethics, and Law: National and International Realities

Many companies in the Untied States have for years had corporate ethics departments and mission statements as well as diversity training programs. From the Enron scandal to many other actions that the media has publicized, corporations have needed to develop ethics programs to assure the public that the company can be trusted and that, if they purchase products from it, work for it, or invest in it, the company will be worth their trust. As diversity grows in the American population corporations have also had to understand that many of their employees will be from different nations, ethnicities, or races. In order for many different people to work together they need to understand each other’s world views and traditions. Corporate diversity programs have helped assure American diversity can work to benefit American corporations.

As the world, not just the American nation, has become a place for most American corporations to invest and market products, their ethics and diversity policies may come into conflict. This is the situation Jed Richardson now finds himself in. In the United States corporate sales persons do not offer incentive payments or other benefits to any corporate or government officials. In the United States such practices are illegal bribes. In many foreign countries, however, payments or gifts made to business owners in order to compete contracts or sales, are considered “business as usual” and just smart business. They are not considered unfair, unethical, or illegal. For Jed Richardson, however, as he reviews the Lima, Peru office’s financial records, the fact that these payments made by the Lima office may not only be unethical, but illegal, are huge concerns.

The United States Congress enacted the Foreign Corrupt Practices Act (FCPA) in 1977 (USDOJ). The FCPA was enacted to prevent United States businesses who entered international markets from “bribing” or giving payments or “gifts” to foreign government officials, political party members, or others in order to obtain business benefits (USDOJ). An illegal activity is illegal and must be reported. It is not a matter of only ethics but one which involves violating the laws of the United States of America. These violations can lead to fines, imprisonment, and the loss of much corporate respect in the United States and in the global marketplace (USDOJ). If, in fact, the actions of the Lima office were payments to government officials, then Jed must report them to the corporation’s executive offices and legal department. Moreover, as the Director of Compliance Jed must, if the company does not report illegal activity, report it himself.

If, however, after careful investigation, Jed discovers that the payments made by the Lima office are not payments to foreign officials to obtain business, but merely to facilitate routine government actions then they are not illegal under the FCPA. For example, the Lima office may have been making payments in order to assure the Peruvian government or other Peruvian government services, such as telephone, electricity, cable, and other matters functioned as necessary for the company to do business successfully in Peru (USDOJ). Also, Jed does not yet know if the payments were perhaps payments to non-government persons in order to obtain business, which in many foreign nations are permitted and even expected.

Lay Person’s Guide to FCPA: Foreign Corrupt Practices Act: Antibribery Provisions. United States Department of Justice. Retrieved August 17, 2008, from