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Network World - Two years ago, when it came to trusting your vendors, a firm handshake and an honest smile would have been just about enough to seal a network deal. Then in came WorldCom, and out went the trust.
Now network executives are putting the screws to their vendors on ethics, business conduct and compliance - longstanding relationships notwithstanding. They demand proof of honesty and integrity - in writing. That means an RFP today might contain as many questions about business practices as it does about a vendor's technology and service.
Playing the adversary isn't always easy. When you start probing a vendor about how it would handle challenges such as a billing error, employee misconduct, a security breach or records retention, the conversations get tough, says Brian Conlon, CIO at Howrey, Simon, Arnold & White, an international law firm in Washington, D.C. "Vendors sort of look at you like 'What?' " he says.
But with WorldCom ingrained in their minds and company-making deals often on the line, IT executives want proof of their vendors' good ethics practices. "Some vendors initially will say, 'Go to this URL. Everything you need to know is there.' But we know our in-house counsel will want more than that, so we expect signed documentation supporting what a vendor has," Conlon says. "These are the new criteria we're using in the IT world."
The Sun shines on these ethics
Before awarding Sun an IT infrastructure overhaul project last year, Conlon scrutinized the vendor's business conduct and compliance programs. He got the assurances he wanted: Sun not only has an organizational structure in place for handling business conduct and compliance, but also takes its reputation as an ethical vendor seriously.
Sun has been evolving its ethics and compliance policies over the last dozen years, since publishing its first Standards of Business Conduct policy statement, says Dave Farrell, who authored the 1991 document while an in-house counselor. Farrell has since become chief compliance officer, heading Sun's 3-year-old Business Conduct Office. He reports to the CFO/executive vice president of corporate resources.
Under the Business Conduct Office, Sun has put each of its 35,000 employees worldwide through a basic online ethics training program and requires ongoing topical training. The company recently rolled out a module on how to handle conflicts of interest, and this summer will release an online training program on export compliance, Farrell says. In addition, top executives and some staff members - about 1,200 people - must participate annually in a two-day "boot camp." At the boot camp, they learn about their fiduciary responsibilities and get training on how to be an ethical leader.
Conlon is not alone in thinking Sun's ethics program impressive. Sun is known for its exemplary ethics and business-conduct programs, says Steve Priest, founder of the Ethical Leadership Group, a consulting firm.