Wednesday, September 22, 2010

Unintended Consequences

Via EthicsPoint. 

[…] As governments worldwide enact legislation to decrease the incidents and impacts of unethical behavior, there is a greater chance the various laws will be inconsistent across boundaries. For instance, Sarbanes-Oxley requires publicly held US companies or those listed on US exchanges to offer a way for employees to anonymously report financial misconduct, yet Portugal and Spain have outlawed anonymity. The FCPA allows for facilitation payments in certain circumstances, but the UK Bribery Act forbids them entirely. And so on.
This issue plays out domestically as well, with the latest example the conflict between the updated Federal Sentencing Guidelines and the whistleblower bounties offered through the Frank-Dodd Act. Under the Sentencing Guidelines, companies get credit for having an effective ethics and compliance program. Furthermore, if a serious transgression is discovered, companies get credit for identifying it prior to when it might have been discovered by other means and by self-reporting. Thus, it is in a company's best interest to provide multiple ways for employees, partners and other stakeholders to come forward with reports of suspected misconduct.

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