Let's get this out in the open right from the start: The world isn't always a nice place to do business. We're not talking terrorism here, but the shadowy world that exists in many countries of bribes, payola, and many other forms of unethical business practices.

Anyone who does business overseas has long encountered problems of this sort, particularly in developing countries. But with an ever greater push into global markets, and many countries trying to make at least a semblance of cleaning up their acts to attract multinationals and others to their shores, there's been a proliferation of legislation worldwide that mimics the United States Foreign Corrupt Practices Act.

And that means problems and headaches for global business, not to mention added expense in meeting a variety of regulatory demands, according to Edward Petry, executive director of the Ethics Officer Association in Belmont, Mass. The association has 760 members that range from ethics officers for the city of New York, the U.S. stock exchange and individual corporations, Petry says.

"There's a proliferation of codes, ethics, standards and principles and a question of whether they add value. Our members want more consistency worldwide in the area of ethical business practices," Petry told a group of standards experts and government officials in Washington, D.C. during World Standards Week celebrations sponsored by the American National Standards Institute in October.

The answer the Ethics Officer Association has devised is a business conduct management system standard that it wants to make a global standard under the auspices of the International Organization for Standardization. American standards experts gave thumbs up to this idea and pledged support for the standard in private sessions following Petry's remarks.

Lee Essrig, an officer with the Ethics Officer Association, told the ANSI group the organization not only understands these sort of concerns, but "wants to demonstrate dedication to ethics management in the most cost-effective way. And we think the answer is one standard for the world."

Essrig says this standard would also be a boon to developing countries as it could "pre-empt legislation and/or regulations for business ethics." She envisions a number of benefits to countries, industries and individual companies accruing from a new standard.

Countries, according to Essrig, can use the standard to advertise that they promote ethical business practices within their borders. This assurance could help promote business activity and serve as criteria for evaluating their investment status. Customers will be able to evaluate individual companies and determine whether they're good bets as alliance partners or vendors. And consumers will have some criteria to determine whether they're dealing with a business that has made business ethics a priority.

The Argument For Business Conduct Management

Officials from Hartford, Ct.-based United Technologies Corporation and Baxter International Inc.-an international health care company based in Deerfield, Ill.-made a strong case for backing such a standard and then promoting it as the world standard.

"Corruption is an embarrassment to business because countries are judged by their corruption levels, which then reflects on the businesses located there," says Patrick Gnazzo, vice president for business practices at United Technologies.

Bribery isn't the only problem American-based companies like UT face when working overseas. Because of ongoing corruption issues-and then global efforts to address problems through a variety of legislative acts-Gnazzo says UT is getting demands from its overseas vendors to have a code of ethics: "Whistle-blowing statutes are cropping up globally," Gnazzo says. "Some requests go beyond U.S. [anti-corruption] principles."

With 47,000 employees involved in providing health care services in a multitude of countries, Baxter International says developing one standard approach to dealing with corruption and imposing one set of criteria on all companies worldwide "makes sense," says Gretchen Winter, vice president and counsel for business practices at Baxter International.

Winter describes a "bureaucratic nightmare" of proliferating demands from hospitals and other vendors for proof of ethical business conduct. Without any standard criteria, she says companies are swamped with paperwork and forms, none of which are consistent and all of which require enormous time, energy and money to process. Multiply the demands in the U.S. with increasing demands for assurance from countries overseas that companies are operating in a clean and ethical fashion and she says businesses like hers are drowning in paperwork.

Not Yet Just Another Management System Standard

Although they want consistent practices worldwide in the realm of business ethics and conduct, neither Gnazzo and Winter want to see proliferation of yet another standard with an attendant auditing scheme that creates yet additional financial strain. For this reason, they say they've been working with the Ethics Officer Association to develop a standard consistent with pre-existing quality and environmental management standards such as ISO 9000 (quality) and ISO 14000 (environment.) The hope is that registrars-those providing the audits-will devise an audit that will encompass all these processes.

"The ISO approach makes sense for companies already dealing with elements like quality processes and environmental management systems," Winter says. "We want a simple, effective way to operate internationally-one that meets all the criteria of doing business overseas, whether it's proving assurance of quality or ethical business practices. When you're dealing with more than 40,000 employees and a multitude of hospitals, we think a single ISO standard would help address the [redundancy] problem."

Moreover, by following in the ISO 9000 model, Essrig says there's the hope that most companies will have in place the basic format and elements to easily meet auditing criteria for the new business ethics standard. In essence, they will simply be assembling pre-existing information into ISO 9000-style formats.

ISO 9000 is a document-based standard that requires businesses to develop a quality manual outlining all the procedures they follow to continually improve their quality management system. It has a new emphasis on continuous improvement that assumes strong internal communication and documentation of manufacturing and service processes.

"Most companies have these elements in place. We don't see meeting the requirements for certification to this standard to be new or onerous," Essrig says.

The standard in question would offer an outline of criteria to meet to prove a company operates in an ethical fashion, complete with recommended procedures to follow to ensure compliance. It would include a monitoring or auditing component, explains Essrig, who says the standard is still under development and may require "some tweaking" before presentation to ISO.

"This is absolutely sensible and something companies want to do," according to Sergio Mazza, former ANSI president and an unpaid advisor to the Ethics Officer Association. "It has an advantage in being generic and process-oriented."

ANSI member companies signaled their approval of this approach later in the day in private sessions. A representative from the ANSI Company Member Council Executive Committee said representatives from many high tech, aerospace, automotive and heavy equipment companies felt that the association had not only done its homework, but taken care to follow ISO guidelines. They also approved of the fact the association has shown concern not to develop just any standard, but one that provides added value to industry both in the U.S. and worldwide.