Last week I was in Southeast Asia, doing training for a group of country compliance officers employed by a prominent US based multinational pharmaceutical firm. At dinner one evening (where you learn more good stuff in two hours than in a day of formal meetings,) my dining partner told me “When I tell people I work for a U.S. company, they won’t talk to me.”

This caused him real anguish. For many years working for a US based company was a source of pride and prestige in his country. US companies not only paid better, they had better work conditions and much cleaner business practices, making them the most coveted employers and the most respected firms.

And now this is gone. Gone in small part due to the well publicized US business scandals of the past six years. In larger part it is due to the perception that the US, through its actions in Iraq and Guantanamo, no longer demonstrates respect for law, ethics or international relationships.

This is not a political blog, so I will not discuss whether this widespread (but not universal) perception is fair or warranted. But as ethics and compliance officers, it is our job to deal with the realities that we face. How does this perception influence our ability to shape the business practices of operations outside the US? How do we need to adapt our message and approach to take into account a lack of respect for American ethics?

We know some answers to this. First and foremost is for Americans to be very humble in discussing ethics and compliance and abroad. We have never had all the answers; now more than ever we need to make this clear. Second is to de-Americanize Codes, communications and training. For example, why focus solely on the FCPA when all countries prohibit bribes, and many OECD signatories prohibit bribes outside home countries as well? Third, root the business case for ethics and compliance in positive and local business success rather than making the case that it is important to meet the US Sentencing Guidelines or to avoid US prosecution.

Three ideas to start. I’m interested in your thoughts.

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I was nearing the end of a training session with the Board of Directors of one of the world’s largest professional services firms. It had been a great hour, with full engagement, thoughtful argument, and a good amount of fun. And then one of the Board members asked me this question. As I paused to think about my answer, the CEO made a buzzing sound, as if it were an alarm going off, said, “Times up” and the room filled with laughter. They had turned the tables on me—the questioner was now the questioned.

This question did not come out of the blue. We had been discussing accountability, and the need for board members to make sure they held each other and the most senior executives accountable. Specifically, we were discussing the question “What do you do with great performers who fail to live up to the organization’s values or Code of Conduct?”

My hesitation in answering illustrates the difficulty we have in holding people accountable. I have never met John Mackey, but I like him. I like his bold personality. I like shopping in his stores. I liked owning his stock (sold several years ago.) He is, by almost any measure, a great business performer.

But those anonymous postings on message boards for Whole Foods and competitor Wild Oats! How incredibly stupid! Yet were they unethical enough or stupid enough to warrant consequences beyond the public humiliation he has endured?

Unlike some, I don’t believe that anonymous posting on internet bulletin boards is a breach of ethics or the Code of Conduct of most companies. Anonymous posting is the generally accepted “rule” of the boards. Users know they don’t know who is behind the anonymous names, like Mackey’s “rahodeb.”

However, companies can put legitimate limits on the content of posts. First, a post should never reveal confidential information of a company. The likelihood that confidential information will be revealed is the reason that many companies prohibit employees from posting on their own bulletin boards. Second, most companies have explicit standards about employees communicating not only about their own company, but about business partners and competitors. Inappropriate remarks have led to charges of improper sales practices and antitrust violations.

Much to my disappointment, John Mackey’s bulletin board posts fail both tests. It is a problem when the CEO of a company says, “So long as Whole Foods same store sales are in double digits the next 2 quarters, the stock won’t trade below $50 per share (and probably not below $60).” Or “I was low on my 10.3% comp prediction and so were you big fella. 13.4%!!! Funny thing, they didn’t guide their comps lower as you predicted but raised guidance for next year. Wonder why they would do that?”

It is also a problem when the CEO makes remarks about their biggest competitor in the natural foods market (and later acquisition target) Wild Oats like the following: “Whole Foods is systematically destroying their viability as a business — market by market, city by city.” Or “I find it simply amazing that some investors continue to have faith in this company. . . . The ‘emperor has no clothes’! Am I the only one who sees this?”

The fact that John Mackey thought he would remain anonymous is not a legitimate defense. Employees in most major companies are now taught to write all electronic communications as if they might someday be made public. John bore the same responsibility—and the higher responsibility to demonstrate good judgment and good values in his actions. The Board I was with—overseeing over 100,000 employees—didn’t think twice. They said Mackey must go, or you send the message that bad judgment and inappropriate behavior are acceptable.

As much as I admire Mackey and Whole Foods, I agree. What do you think?

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