AS COMPANIES today embrace the opportunity of expanding their operations globally, they are called to higher standards of business conduct in the marketplace, whether as a measure to steer clear of law enforcement action or a way to fortify a brand’s mettle.

It is no longer enough for companies to assert their core business values — they must ensure these very values are internalised and lived across the company’s geographical segments.

Any business owner worth his or her salt understands that an ethical blunder can do irreparable damage to one’s corporate reputation, especially in an age when being global means being more exposed to public scrutiny.

Protecting a brand

A look at the now-defunct Enron Corporation’s downfall is to realise how ethically-misaligned practices do not just injure a company’s growth prospects but also threaten its very existence.

Many companies do choose to take the high road, not just to avoid monetary losses and massive embarrassment, but because they understand that a good name is, in itself, an important strategic asset.

As an example, not only has FedEx cemented its reputation by consistently delivering good logistics services worldwide, it has also boosted its brand equity through a cross-border ethics platform that substantiates its “purple promise” of reliability and integrity.

Any individual who operates under the FedEx brand, wherever he or she may be, is expected to adhere to a standardised code of ethics. By institutionalising this code, the company is sending a message to the world that it takes responsibility and accountability seriously.

Not surprisingly, FedEx earned a spot i n the top 10 trusted companies in the United States in the Boston College-Reputation Institute 2009 CSR Index — a telling indication of the public’s positive perception of the company.

Doing things right

 When it comes to doing business around the world, adhering to good business ethics offers strong returns on investments and greater profits.

According to research by the Ethisphere Institute, the companies on their 2009 World’s Most Ethical Companies list have, as a whole, outperformed the S&P 500 companies in the same period.

Other benefits include:

* Better employee commitment and loyalty. Having a code of conduct gives a company’s global workforce a common guidepost when faced with ethical issues.

* A good respect for the law. When the company adopts an ethical company culture, the subject becomes more important and, consequently, the company’s personnel pay more attention to compliance with the laws and regulations affecting the organisation.

* Greater harmony in behaviour. Potential clients, recognising greater transparency and professionalism, develop a greater trust in the company.

* A good name. Globally ethical companies, thus, enjoy strong brand recognition and improved company reputation in all their markets.

* Strong ties. Ultimately, companies with clearly defined, sound and standardised good business practices attract and help build strong business relationships.

Global ethics

Truth, honesty and faith are all well and good, yet the importance of articulating them in different contexts without losing their essence cannot be over-emphasised.

Global enterprises are faced with the task of recognising different social norms, abiding by localised laws, handling multicultural client bases, and relating to partners in multiple jurisdictions.

The development process for a global ethics programme should help the company learn more about their overseas counterparts, making it easier for both groups to become aware of and understand the various cultural differences.

It only makes sense, therefore, that the standardised code of ethics promoted across a company’s global foothold must be well-articulated in the local languages.

The localisation of corporate policies and ethics training materials should tackle cultural nuances — especially those related to doing business — such as tone, vocabulary, common gestures, taboos, and region-specific sensibilities. Employees learn and respond more positively to policies that make sense to them and relate to cultural familiarities.

Taking the lead

While there may be a number of global companies out there still coming to grips with how to best articulate their ethical principles to all their branches, it is encouraging that companies that invest resources in the proper communication of their core values to stakeholders are steadily influencing other global players into reaping its rewards.