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UPCOMING EVENTS Distinguished Ethics Speaker "Ethics is Ethics" Staci L. Ziants January 31, 2007 ------ Ethics Luncheon Forum "Breaking the Glass Ceiling" Gretchen R. Haggerty Major General February 8, 2007 Sponsored by:
Ethics Luncheon Forum "One Man's Opinion: Why Employees Must Come First" Le Herron May 23, 2007 Click here to request additional information about either event. RECENT EVENTS Ethics Luncheon Forum "Making the Right Choice... Timothy J. Noonan LINKS Beard
Center CONTACT US For more information, contact Rebecca Ellsworth at 412.396.4005 or beardcenter@duq.edu
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ETHICS
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Global Ethics Hotlines - Not So Fast Says Europe 1 The U.S. Sarbanes-Oxley Act, passed in 2002, requires companies to take several steps to assure accurate financial reporting, including setting up a confidential whistleblowing mechanism. As U.S.-based multinationals have sought to meet the requirements of this law in their European operations, they have run into some unexpected obstacles. The core of the problem is the hotlines’ (or helplines’) anonymity. For example, the French Data Protection Authority (CNIL) told McDonald’s and Exide Technologies that they could not use ethics hotlines to gather information on possible corporate problems. The French regulators asserted that hotlines violated French privacy laws, because callers to the hotlines could remain anonymous—substantially increasing the opportunity for false reporting. The French maintained that anyone named by a whistleblower should be told of the complaint, so they could have a chance to prove their innocence. The French had a long-standing unease with anonymity, dating back at least to Nazi Germany’s occupation of France during World War II, when individuals had been forced to inform on others. Similar to the French regulatory agency’s ruling, a German labor court ruled that a U.S. multinational Fortune 500 company was prohibited from implementing certain features of its code and from establishing its helpline. Among other charges, the court ruled that the firm did not adequately consult with the works council before rolling out the code of conduct and helpline. The courts cited the company’s stipulation that an employee was required to report violations of the code of conduct and that certain company policies go beyond the government’s employment law in the areas of harassment and discrimination. The European Union’s Data Protection laws give individuals the right to know what data are being processed about them. It also assures that data are processed fairly and lawfully, are kept secure, and are not transferred to a country that fails to protect privacy rights, such as the United States, in the opinion of EU regulators. Helplines are meant to assist U.S. businesses meet their compliance obligations under the U.S. Sentencing Guidelines and Sarbanes-Oxley standard. In the United States, they are generally accepted as an effective compliance and ethics program. One consultant recommended that U.S. multinationals operating in Europe develop a tri-level program in response to the Sarbanes-Oxley requirement: (1) a fully developed program for its U.S. operations, (2) another program posted on the parent company’s global website and addressed to the world (employees and the general public) and, (3) a “Europeanized” version of the program for its EU subsidiaries to adapt and ratify, consistent with local laws and procedures in Europe. 1 Adapted from an exhibit appearing in Anne T. Lawrence and James Weber, Business and Society: Stakeholders, Ethics, Public Policy, 12th edition, Burr Ridge, IL: McGraw-Hill, forthcoming and based on “U.S. Helplines Raise EU Privacy Concerns,” Ethikos, September-October 2005, pp. 1-4, 18-20 and “Blow the Whistle—No Wait: Ethics Hotlines May Be Illegal in Europe,” Business Ethics, Fall 2005, p. 10. |
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