Table of Contents

1.0 Introduction................................................................................................................................1
2.0 Question.....................................................................................................................................2
2.1Visit the Web site for BELA at www.ethisphere.com/bela. Define the four core values in
detail, and explain which oneyou think will be the hardest for members to achieve and why.. .2
2.2 Do you think it was a good idea to welcome founding members with such widely
publicized ethical transgressions in their past? Why or Why not?.......................................4
2.3 BELA is a U.S. driven initiative at the moment. Do you think it will achieve a wider
global acceptance over time? Why or Why not?...............................................................6
2.4 Are the four core values legal compliance, transparency, identification of conflicts of
interest, and accountability enough to establish a credible reputation as an ethical company?
What other values would you consider adding and why?...................................................7
2.5 Cynics could argue that this is simply a public relations exercise for companies that have
performed unethical business practices in the past. Optimist could argue that this is, at a very
least, a step in the right direction of restoring the unethical reputation of a business as a whole.
What do you think?..................................................................................................... 8
2.6 According to the rules of BELA, members will be audited every two years to make sure
they are in compliance with BELA standards, and can face removal from the alliance should
that audit provide evidence of failure to comply. Do you think the threat of removal from the
alliance will keep members in line? Why or why not?.......................................................9
3.0 Conclusion...............................................................................................................................11
5.0 References................................................................................................................................12
5.0 Appendix..................................................................................................................................14
Appendix 1:............................................................................................................. 14
Appendix 2.............................................................................................................. 16

1.0 Introduction
BELA (Business Ethics Leadership Alliance) was formed in December 2008 with 17
companies as the founding companies from a wide range of industries such as Dell, Walmart,
PepsiCo, etc. Those organizations want to prove that business can be both successful and ethical.
BELA which working with the Ethisphere Institute, carry the four core values (legal compliance,
transparency, identification of conflicts of interest, and accountability) to invite public and
private companies to join it.
The alliance members think they have responsibility to reestablish ethics as the foundation of
everyday business practices. At least, thats what the members see through the alliance aside
from political finger pointing and the business community as whole has been characterized as a
barrel full of bad apples that has the ability to spoil the global economy.
Optimists see this new organization as a step in the right directions of restoring the unethical
reputation of business as a whole with some large companies getting involved here (e.g. WalMart, Dell, and Pepsi). While, cynics see this as just a public relation exercise for companies that
have performed unethical business practices in the past. For example, in 2006, Sempra Energy
agreed to pay more than $377 million in response to allegations of manipulation of the price of
natural gas during the 2001 California energy crisis.
Sometimes, the employer cannot cope with their conflict of interest which happens when
an individual should decide whether to prior his or her own interests, organization, or others
group, for example, Wal-Mart who has been hiring some illegal immigrant workers on their
stores as cleaning crews in 21 states. According to Wal-Mart confession, they know that the
workers were illegal but, they unable to do anything because they was cooperating with federal
government for three years at that time and the worst thing is, they cannot untied the contractors
just because government not permitted them. Mona Williams, the Wal-Mart spokeswoman stated
that Wal-Mart was hesitated to asking more assurances regarding to the employees contractors
status (Ferell, Fraedrich and Ferell, 2010). That kind of situation prevents Wal-Mart to practice
transparency in their business especially to their stakeholder whom holds an important point to
determine companys sustainability. For instance, shareholders, investors doubly invest in WalMart or the employees who less-motivated and customer stop to trust Wal-Mart due to their
reputation.
1

2.0 Question
2.1 Visit the Web site for BELA at www.ethisphere.com/bela. Define the four core values in
detail, and explain which oneyou think will be the hardest for members to achieve and
why.
Australasian Compliance Institute define legal compliance as the process of identifying and
meeting a strategic obligations by organizations whether arising in standards, law, and codes or
from the expectations of stakeholder. Lately the definition of Legal Compliance has been
expanded to understanding and following codes of ethical within entire professions (Lee's
compliance, 2013) which means in reaching decisions individual may use ethics as a guide in
legal compliance (Hartman, 1998). In order to overcome these issues, BELA present this legal
compliance in form of following both the letter and spirit of the law in order to counter fraud,
corruption, bribery and deceit (Ethisphere, 2014).
Transparency refers to processes, activities, decisions and practices in company that open to
the outside world through provides public access to information, responsible on their actions,
create decisions openly, build incentives in order to uphold those standards for leaders (Carroll
and Buchholtz, 2014). For those companies who applied transparency, transparency able to
increase credibility of a company in the marketplace, build loyalty, and help companies to gain
esteem and trust with stakeholders (Carroll and Buchholtz, 2014). BELA setting the cultural tone
from the top by encouraging dialogue on ethical issues and disclosing information in a full,
accurate and timely manner which means that the leaders in a company (CEO) honest with
employees about the realities of their business and the willingness to speak candidly with leaders
(Ethisphere, 2014)
Conflict of interest being suspect as the one of the reason in most unethical conduct in many
companies which it is happen when an individual should decide whether to prior his or her own
interests, organization, or others group. For instance, Larry Moody, East Palo Alto City
Councilman was fined prior uses his official position to employ his wife which clearly violate
political reform Act. prohibits from using his official position to

influence governmental

decisions which the official has a financial interest (refer to appendix 1) (Dremann, 2014). Due

to this, BELA actively identifies and addresses the conflicts of interest potential and appearances
of impropriety (Ethisphere, 2014).
Accountability refers to a responsibility from companys action (Crane and Matten, 2010).
That means companies BELA try to emphasize quality, protection for customer, sustainability for
environmental and integrity in the supply chain. For instance, Nestle Boycott (refer to appendix
2).
Among BELAs four core values, the hardest one could be the legal compliance value,
many compliance programs are designed by lawyers to ensure that the company is legally
protected. These programs usually yield complex legalese that few within the organization can
understand (Ferell, Fraedrich and Ferell, 2010). Compliance are following laws which generally
are backward looking consequently, compliance is not extremely responsive with many daily
concerns that are faced by managers and employees, for companies who wants to cut the edge of
technology, new practices or new financing mechanism, law might not be useful as a guide. Also,
if companies try to apply both legal compliance and ethics in the same time, it is not going to
work out and finally will arose cynicism from employee, these because legal compliance
program is counter to the philosophy of empowerment straightly which empowerment are giving
employees authority and trust to making a good decisions by their own self, subsequently, with
legal compliance character, discretion would reduce, oversight increment, and tighten controls
(Hartman, 1998).

2.2 Do you think it was a good idea to welcome founding members with such widely
publicized ethical transgressions in their past? Why or Why not?
Welcoming founding members who has a bad history in their company that already
widely publicized regarding to an unethical conduct which being practiced by them was a good
idea. First reason, company whom has ethical problem in the past that join ethics program will
have a second chance to change and heal their bad reputation by keep doing ethical things that
could gain stakeholders trust for instance, PETCO Animal Supplies Inc, succeed to deal with
their bad reputation from the past which being criticism because the condition of their pet such
as, many parrots died caused by diseases like obesity, high stress or too little exercise. PETCO
come out with ethics program by applying code of ethic to their stakeholders, make animals as
their priority include the health, food and support four Rs which are reduce, rescue, rehabilitate,
and rejoice (Ferell, Fraedrich and Ferell, 2010). Second reason is, the company whom has an
unethical past could learn from ethic programs to run their business properly in the future and
know how to prevent unethical behavior or even able to help/handle unethical issue from outside
their company for example, Wal-Mart provide a website special for unethical behavior complaint
which are available in many different country and language.

Figure 1 Walmart Unethical Behavior Complaint Website

4

Source: (Walmart, 2014)

2.3 BELA is a U.S. driven initiative at the moment. Do you think it will achieve a wider
global acceptance over time? Why or Why not?
Nowadays, technology growth faster each day and its ability have shape a new level of
transparency and changes in business communication. Subsequently, every single action that
taken by businesses around the globe are more exposed than before which might affect
companys reputation where companys reputation known as one of the competitive advantage in
business sustainability (Hartman, 1998). As described in ability of transparency, from practicing
transparency companies could gain trust from stakeholders and increase the reputation which
known as the reasons of sustainability business that were demand by all of the businesses.
Consequently, ethics program is viewed as vital point of long-term survival by many companies.
For instance, Larry Cochran, vice president of quality and compliance at Kiewit said that ethics
program is the right things to do for long-term survival as the part of sustainability. In addition,
the president and CEO of J.F. Ahern Co, Tripp Ahern adds that the practice of questionable
ethical are used more prevalent than they are today. These because companies look to joint
ventures (JV), strategic partnerships and new clients to increase their backlog, integrity is
coming to the fore (FMI, 2010). Moreover, by 2020 economy growth in global are predicted
reach 80% (Bender, 2005). The growth will be driven by activities in corporate. Globalization
process come to accompany economic growth to present both moral and profitable opportunities
for business which include a fairly treat of stakeholder (Weiss, 2006).

2.4 Are the four core values legal compliance, transparency, identification of conflicts of
interest, and accountability enough to establish a credible reputation as an ethical
company? What other values would you consider adding and why?
over the times, many changes has been occur in business world and the four core values
that BELA offer were not enough to balance with todays accelerate. Others value that could be
considered by BELA is fairness or equality which focus on what and how employees perceive
something, such as, the distribution of salary or reward. Practicing fairness or equality values
could lower the risk of employees from being treated unfairly for instance, salary payment
system based on gender, religion or race without considering its employee performance or talent.
An unfairness treatment could lead to employees dissatisfaction that can ruin companys
reputation for example, the Memphis Fire Department sued by Carl Stotts, a black district fire
chief in Memphis because he perceived a discrimination along with others black citizen on last
hired, first fired policy (The Stotts Case) (Weiss, 2006). If the companys employee are satisfied
because perceived an equal treatment, they will think that the company valued them and increase
their performance, those increment will automatically affect companys reputation in other
stakeholders (customer, investor) eyes which being consider as a good company, as the result
company might gain much profit and a chance to become a sustainability company.

2.5 Cynics could argue that this is simply a public relations exercise for companies that
have performed unethical business practices in the past. Optimist could argue that this is,
at a very least, a step in the right direction of restoring the unethical reputation of a
business as a whole. What do you think?
Ethics program might be seen as an excuse for company to keep their business sustain.
However, ethics program also can be viewed as the intention from companies to repair the
business culture. There are many reasons why companies conduct unethical behavior in the past.
Based on judgment-related reasons, it is happen when a company has two statements on their
standards of conduct that makes them meet conflict on two good values. For instance, ethical
dilemma that faced by managers to decide on how to remove asbestos from scrubbers, the
scrubbers needs to be shut down for longer than EPA (United States Environmental Protection
Agency) allows in order to remove the asbestos while if the company not removed the asbestos it
will break EPA regulations. Even though managers knew the regulations but, he or she needs to
do the right things. In the other hand, according to information-related reasons companies might
know the rules and regulations but do not know how to apply it (Hartman, 1998). The author
think that ethics program is not always viewed as reputation healer but, could be the process of
learn a better and right ways on conducting business through ethical ways besides legal
compliance rules. As describe in the answer question number 2 that ethics program is a second
chance for companies to change with hope after knows and learn from ethics program,
companies would makes business industries to be a better.

2.6 According to the rules of BELA, members will be audited every two years to make sure
they are in compliance with BELA standards, and can face removal from the alliance
should that audit provide evidence of failure to comply. Do you think the threat of removal
from the alliance will keep members in line? Why or why not?
In order to audit each of members, BELA needs to compile enough or information as
evidence to prove that the member are out from ethics track which made them decent to be fired.
A liable data of evidence might help company lower the risk or prevent a conflict within the
kicked member that asks for explanation regarding the removal. BELA can be view as a wellknown organization considering many large companies such as, Wal-Mart, PepsiCo, or Dell
joined this organization. Every action that those company took, tend to be observe by global
especially, media where nowadays people can easily access information from others parts of the
world within a seconds. Consequently, if there is member who got kicked out by BELA
regarding to unethical issue, media would quickly spread the issues include its reasons which
those kind of news could trigger companys reputation. For instance, Nike go through sales
decreased in 1993 regarding to sweatshop practice issue in Indonesia which revealed after it was
appear in mass media (Roberta Baskins CBS report), to make matters worse, in 1996, Life
Magazine published photos of Pakistani children who stitching soccer ball for Nike, Adidas, and
others (Ferell, Fraedrich and Ferell, 2010) which strictly violate laws in almost all around the
world such as, Act 1986 in India and U.S. Fair Labor Standards Act. (FLSA) of 1938 (Otfinoski,
2014).

Source: (Banjo, 2014)

Thus show the power of mass-media able to give a huge effect towards companies which could
makes them afraid to make even a single mistake, especially on ethical issue that were not just
affect companys reputation which make stakeholder lost their trust and interest but, also threaten
the business sustainability. Finally, members would like to keep in line for doing ethics program.

10

3.0 Conclusion
Over the times, many unethical conduct happens which make Ethics program become a
great demand for this globalization era, the acceleration of technology has changed everything
include in business areas where each of companies try to gain profit as much as they can just for
the sake of companys sustainability. Thus desire has affect companies in action or making
decision which could become unethical if there is no control even though legal compliance such
as, law, regulation, and policy has been introduced from many years ago but in fact it is not
enough to overcome companies issues, it is proved by many case occur due to business decision.
The establishment of ethics program such as, BELA is a good breakthrough in business area,
BELA with their four core values in hope to make business area become better.
Word Count: 2,167

11

5.0 References
Banjo, S. (2014) "Inside Nike's Struggle to Balance Cost and Worker Safety in Bangladesh". 21
April.

[Online]

Available

at:

http://online.wsj.com/articles/SB10001424052702303873604579493502231397942 [Accessed:
29 October 2014].
Bender, B. (2005) "Study sees rivals to US power". 14 January. [Online] Available at:
http://www.boston.com/news/world/asia/articles/2005/01/14/study_sees_rivals_to_us_power/
[Accessed: 29 October 2014].
Carroll, A. and Buchholtz, A. (2014) Business and Society: Ethics, Sustainability, and
Stakeholder Management. 9th ed. United States of America: Cengage Learning.
Crane, A. and Matten, D. (2010) Business Ethics. 3rd ed. Great Britain: Oxford University Press.
Dremann, S. (2014) "East Palo Alto official fined for conflict of interest". 8 October. [Online]
Available at: http://www.paloaltoonline.com/news/2014/10/08/councilman-moody-to-pay-3000conflict-of-interest-fine [Accessed: 29 October 2014].
Ethisphere

(2014)

"Better

Ethics

Better

Business".

[Online]

Available

at:

https://www.caci.com/announcement/bela_ad_1-09.pdf [Accessed: 29 October 2014].

Ferell, O.C., Fraedrich, J. and Ferell, L. (2010) Business Ethics and Policy: Ethical Decision
Making and Cases. 1st ed. Singapore: Cengage Learning.
FMI (2010) "Ethics Programs: Federal Imperative, Cultural Opportunity". [Online] Available at:
http://cieci.prod2.classfive.com/files/Ethics-Programs.pdf [Accessed: 28 October 2014].
Hartman, L.P. (1998) Prespectives in Business Ethics. 1st ed. Singapore: McGraw-Hill.
Lee's compliance (2013) "The Importance of Legal Compliance". [Online] Available at:
http://www.compliancetools.co.za/ComplianceInABox/ImportanceOfLegalCompliance.aspx
[Accessed: 26 October 2014].

12

Otfinoski, S.A. (2014) You Choose: The Child Labor Reform Movement: An Interactive History
Adventure. 1st ed. Minnesota: Capstone.
Walmart

(2014)

"Walmart

Global

Ethics".

[Online]

Available

at:

https://walmartethics.com/home.aspx?LangType=1033 [Accessed: 29 October 2014].

Weiss, J.W. (2006) Business Ethics: A Stakeholder and Issues Management Approach. 4th ed.
Canada: Thomson South-Western.

13

5.0 Appendix
Appendix 1:

http://paloaltoonline.com/news/print/2014/10/08/councilman-moody-to-pay-3000-conflict-ofinterest-fine

Uploaded: Wed, Oct 8, 2014, 7:42 am

East Palo Alto official fined for conflict of interest

State agency fines Councilman Larry Moody $3,000
by Sue Dremann
East Palo Alto City Councilman Larry Moody has agreed to pay $3,000 in a conflict-of-interest
case, after voting to award a grant to a nonprofit organization that employs his wife, according to
documents filed by attorneys for the California Fair Political Practices Commission.
Moody voted during a City Council meeting on Nov. 6, 2013, to award the $77,000 grant to New
Creation Home Ministries and Able Works, where his wife, Lisa, is a parenting-class coordinator.
In doing so, he violated the Political Reform Act, according to the stipulation-and-order
agreement between Moody and the commission. The act prevents a government official from
making, participating in making, or attempting to use their official position to influence any
governmental decision in which the official has a financial interest.
Moody's wife began working for New Creation on February 17, 2011, and was employed there
when Moody voted for the grant. New Creation paid her income totaling $2,992.54 in 2011, and
$4,152.62 in 2012, attorneys noted.

14

During the Nov. 6, 2013, City Council meeting, Moody offered an amendment to a motion on
Policy and Action Item 21 to pull $26,333 in funding from one recipient, Cassey and Grupo Palo
Alto, and split the total $163,333 in grants between two collaboratives: Drew Health Foundation,
Inc. and East Palo Alto Boxing Club; and New Creation Home Ministries and Able Works. He
later withdrew the amendment, and the funding was approved as originally proposed. After a
discussion, he voted to award a $77,000 grant to New Creation Home Ministries and Able
Works.
The City Council subsequently voted to rescind the decision on Feb. 4, 2014, after learning of
Moody's conflict.
Attorneys for the FPPC wrote that Moody should have known his involvement in the decision
was a conflict of interest, given the financial implications for this family.
"Making a governmental decision in which an official has a financial interest is one of the more
serious violations of the Act as it creates the appearance that a governmental decision was made
on the basis of public official's financial interest," the attorneys noted.
The agreement means that Moody waives the right to an administrative hearing to determine his
liability, which could have cost him legal fees in addition to any punitive decision.
Moody could have been fined a maximum of $5,000. The agreement is in line with fines for
other similar violations, the attorneys noted.
The commission will vote on whether to accept the agreement at its Oct. 16 meeting.
Moody could not immediately be reached for comment.
Source: (Dremann, 2014)

15

Appendix 2

Nestl: Groundbreaking Boycott Saves Millions of Infant Lives

1984

Corporate Accountability International (then Infact) launched the historic Nestl Boycott in
1977. It was the first boycott to force a major corporation to heed the concerns of the global
public and commit to major changes in its practices.
Nestl, the world's largest food corporation at the time, was aggressively marketing breast milk
substitutes to mothers in the Global South as the most nutritious choice for their babies. But,
these women could scant afford the formula powder and, when they could, they lacked access to
clean water to mix it with. Many mothers watered down the formula in order to make it last,
leading to widespread infant death from malnutrition and water-borne illness.
Working with allies around the world, Corporate Accountability International organized a 10nation boycott of Nestl products. The campaign helped compel the World Health Organization
to advance a global code of conduct on marketing of breast-milk substitutes: a means of saving
millions of infants lives. All of the member countries of the World Heath Assembly voted to
adopt the code...except the United States.

16

In 1984, boycotters achieved another major victory when Nestl agreed to sweeping reforms in
its infant formula marketing practices. An untold number of lives were saved as a result.
Source: (Corporate Accountability International, 2014)

17