Compliance &Ethics - Society of Corporate Compliance and Ethics

Compliance & Ethics Professional May/June 2012visits to the company site by inspectors forthe USDA and OIC. They checked records ofethics training sessions, saw to it that postersproclaiming the existence of a help-linefor whistleblowers were displayed prominently,and randomly questioned employeesabout the company’s code of conduct. Hadthe inspectors been dissatisfied with Tyson’sethics efforts, its probation could have beenrevoked and serious penalties inflicted on it.The man in charge of the reformativeprogram was an attorney, but he notes thatnationwide only 19% of persons in positionsequivalent to his are lawyers, and only 3% havebackgrounds in security work—most are fromthe management ranks of their company. Heemphasizes that the corporate code of conductmust be “much more than a statement of ideals”and notes that it should, when they are relevant,cover the following topics: advertising, antitrustand unfair competition, bribery and improperpayments, company books and records, conflictsof interest, environmental affairs, equalemployment opportunity, frauds and misrepresentation,government contracting, internationalbusiness, political contributions, proprietaryinformation, and securities transactions. 22The surprise ending to the case camewhile both men were in the process of appealingtheir convictions. In late 2000 and early2001, President Bill Clinton granted full pardonsto both malefactors. The lesson seems tobe that white-collar bribery is an insignificantwhite-collar crime; after all, lobbyists engagein it constantly, albeit typically staying justinside the laws which they themselves havehad a significant hand in formulating. That acode of conduct and strict supervision of thewrongdoing company can be a consequenceof the bribery is perhaps the best that can beexpected, given the very tight link betweencorporate contributions and the survival ofpoliticians in office.Sarbanes-OxleyThe Sarbanes-Oxley Act of 2002 (SOX), moreformally known as the Public CompanyAccounting Reform and Investor ProtectionAct, was passed as a result of a widelypublicizedseries of scandals that involvedEnron and its auditor and collaborator incrime, the auditing and consulting firm ofArthur Andersen, as well as WorldCom, Tyco,HealthSouth, and several other prominentbusiness operations. SOX requires public companiesto report whether they have a code ofethics that applies to their principal financialofficer, comptroller, or principal accountingofficer. When the Securities and ExchangeCommission (SEC) promulgated regulationsto flesh out the statute, it added the principalexecutive officer to the roster of those obligatedto meet the terms of a corporate code ofconduct. A satisfactory code must contain atleast five elements:1. Honest and ethical conduct, includingthe ethical handling of actual or apparentconflicts of interest between personal andprofessional relationships;2. Full, fair, accurate, timely, and understandabledisclosure in reports that a registrantfiles with, or submits to, the Commissionand in other public communications madeby the registrant.3. Compliance with applicable governmentlaws, rules, and regulations;4. The prompt internal reporting of violationsof the code to an appropriateperson or persons identified in the code;and5. Accountability for adherence to the code. 23If a company decides not to adopt such acode, it must indicate why it had failed to doso. If a code is adopted, it must be publiclyavailable and any changes in its content mustbe conveyed to the SEC.60 www.corporatecompliance.org +1 952 933 4977 or 888 277 4977