Log In

Reset Password
BERMUDA | RSS PODCAST

Ethics emphasised after Kozlowski

Tyco was rocked by the $600-million theft case brought against its former chairman and chief executive Dennis Kozlowski and former chief financial officer Mark Swartz that eventually led to their jailing in the US after a 2005 re-trial.

Learning from that experience has resulted in a new code of ethics that employees, who amount to 240,000 worldwide, must sign each year.

Tyco had a code of ethics before the Kozlowski/Swartz episode, so what has changed? Would it now be harder for a rogue employee to pilfer money from the multi-billion dollar enterprise?

Eric Pillmore, head of Tyco’s corporate governance, said that in the first three weeks of the new era under current CEO Ed Breen the company’s guide to ethical conduct was reviewed and was given a new set of values that reflected Mr. Breen’s own, namely integrity, excellence, accountability and teamwork.

“Those four values are not enough. We need good guidance from a behavioural point of view,” said Mr. Pillmore.

That includes reference to various pre-existing acts and regulations on workplace conduct. It also means there has to be some kind of disciplinary procedure.

“Employees need to know we are going to enforce the code, otherwise it does not have any teeth,” he explained.

Tyco had a “stand-down” day in 2003 when all its employees had a chance to read the code and sign it. The code is resigned on a yearly basis.

There is a clear disciplinary procedure that is brought into force when the code is broken. By doing so the company demonstrates that the code is not an irrelevant document that is simply signed and forgotten about from year to year.

“We have an integrity bulletin that highlights where we have had problems and where there have been violations and what discipline we have taken. Our people can then see what action has been taken,” said Mr. Pillmore.

The Tyco senior vice-president said the company had been successful in implementing the code of ethics since it was drawn up four years ago. Because of the company’s global reach and the fact that it has staff in many diverse countries, the code respects cultural differences and undergoes re-writes when necessary.

Tyco’s guide to ethical conduct is displayed on its web site.