International Perspective: Business Ethics Center for Ethical Business Cultures November 5, 2012 The Center for Ethical Business Cultures’ recent Members Roundtable – An International Perspective on Business Ethics – featured a lively presentation from 3M’s Istanbul-based Ray Eby, director of compliance & business conduct for the company’s western & central east European regions. Eby sees his role in compliance as that of adviser and resource for business unit leaders. He argued compliance risk can arise from a company’s strategic plan (e.g., Walmart’s aggressive growth plan in Mexico) as well as from conflicts of interest.A number of points surfaced during the discussion:Compliance officers and business managers must understand local culture and business practices in order to identify conflicts and compliance risks. Because they understand local culture, business unit managers are often better equipped, and more conservative, than compliance officers in shaping guidelines to avoid creating conflicts of interest.Conflicts of interest are common, subtle and different from culture to culture. For example, in the old Soviet system, people found ways, networks and relationships to survive outside the rules which may make it more difficult today for some in those countries to even see a conflict. However, conflicts can be avoided if the organization communicates clear guidelines, requires full disclosure and has developed an auditable process.Most opportunities for growth are in countries that are high risks for corruption – see the Corruption Perception Index produced by Transparency International (TI). However, it is also true that most major fines for corruption have been levied against businesses in western countries which are well regarded in the TI index. On the plus side, awareness about the down sides and risks of corruption is growing in more countries.Being a values driven company is important but difficult when values vary across cultures. However, it is possible to set down clear guidelines and procedures that everyone can understand regardless of different perceptions and interpretations of values.Interesting 3M innovation: after new leaders have been identified, but before they are announced, each must meet with the ethics and compliance organization. More than a final vetting, this step signals that their new responsibilities include ensuring that they and their team live up to ethics and compliance standards. This meeting also builds a relationship with compliance staff.