INTERNATIONAL CONSORTIUM ON GOVERNMENTAL FINANCIAL MANAGEMENT

Presented by

TEMISTOCLES ROSAS R.Partner – DirectorConsulting Plus

74 Street, San Francisco, Golf Plaza Building Nº 8P.O Box 0830-00611, Panama, Rep. of Panama

email: temirosas@conplus.net

Program of Good

Governance and Business

Ethics in Panama

Agenda Introduction Program of Good Governance and

Business Ethics- Participation of Panama in Ethics Programs - Importance of Ethics for Businesses- What is an Ethic Program?- Basic Principles of Corporate Ethics- Steps to follow in the Panamanian Ethics Pact for Businesses.

Program of Good Governance and Business Ethics

It is an initiative sponsored by the U.S. Department of Commerce to promote in private sector, the use of business ethics principles and to provide knowledge (know how), tools and leadership to fight corruption.

The program began with developments of ethics programs for the former Russian Federation and countries of Eastern Europe.

In Latin America, programs began for Panama, Paraguay and Nicaragua.

Most recently, Guatemala, Honduras and El Salvador have joined the program.

In Panama, the Ethics Pact for Businesses was signed on October 21st, 2003.

Current Situation in Panama

U.N. GLOBAL COMPACT

• The U.N. Global Compact has not been designed as an instrument of regulation. It is not a code of conduct nor a legal instrument.

• It should not be seen as a substitute for the regulatory statues that either countries and businesses have the interest to establish. This is only a simple and open exercise with the aim of identifying, spread and promote good practices based on universal principles promoted by the United Nations.

Current Situation in Panama

U.N. Global Compact contains:

• Human rights principles, labor standards, environment, anticorruption principles.

• Promotion of Social Responsibility in Businesses.

• Currently, it is discussing the norm ISO 26000 relation to Corporate Social Responsibility.“Business practices rooted in universal values can bring social and economic gains” Ban Ki Moon, U.N. General Secretary

…Current situation in Panama

Ethics Pact for Businesses Establishes guidelines for Corporate

Governance and Accountability

Business Ethics principles

Implements Codes of Conduct

Promotes Corporate Social Responsibility

…Current situation in Panama

Ethics Pact for Businesses

Signed by main business leaders and associations

Signed by government officials

Signed by non government organizations such as the Catholic Church, Universities and Civic Clubs

¿What is Ethics?

It is a philosophical reflection on morality, know as the rules that govern human relationships, or the acts taken under such rules.

It is the code of conduct or the system of principles that guides our existence and we apply it when we act.

It begins where the Law ends.

…¿What is Ethics?

In businesses, it is known as: To treat others well.

To do things right…even if nobody is watching.

To do things right…because the goal is right.

Respect my profession, my name and my family.

¿How is Ethics in Panama?

“Don’t worry fellows, even if things are not going

right, we have the necessary

resources required to bribe the

authorities”

Lowers rotation and improve employee commitment

Creates a high rotation of personnel

The best prospects seek to join companies with high standards of ethics

Creates problems on job recruiting

Creates a positive work environment

Diminishes moral on employees

Improve reputationCreates a negative reputation

Builds loyalty on clientsCauses fines and sanctions

Establishes competitive advantages

Causes loses of clients and the business

Benefits of BEHAVING with Ethics in Business

Cost of NOT BEHAVING with Ethics in Businesses

¿What is an Ethics Program?

It is an effective tool in order to establish standards and procedures that reflect company’s values: what ALL of the employees and company’s owners think, say and do.

The ethics program goes beyond the observance of laws and summarizes the behavior of the employees in situations when there is no legal reference.

Benefits obtained by implementing an Ethics Program

Reduces risks and costs

Improves reputation and profits

Improves performance, productivity and competitive position

Improves the access to capital, credit and foreign investments.

Increases earnings, with long term sustained growth

The Four Main Foundations of an Ethics Program

1. Codes of Conduct

2. Training and Communication

3. Ethics offices and alternating channels of information

4. Monitoring, audits and evaluations

Basic Principles of Corporate Ethics

Norms of Corporate Government and Accountability.

To have a mechanism of consulting, monitoring and audit on ethics.

To maintain and communicate reports on infraction and infringement of laws and established norms.

To maintain a reliable system of accounting and with good internal controls

To avoid fraudulent behavior

To clarify what is a conflict of interest, the offering and acceptance of permitted presents and the improper and inadequate payments.

Management and protection of the information

Basic Principles of Corporate Ethics

Relationships with employees

To promote team work and equitable and just treatment.

To avoid discrimination and harassment.

To maintain adequate standards of health and safety.

Personal and Professional Relationships

Relationships with other companies and with the consumer.

…Basic Principles of Corporate Ethics

Relationship with the local and global community and to act with social responsibility.

Relationship with government authorities

Prevention of bribery and extortion

Economic contributions and political activities

•It is good to show my faith on the goodness of my vocation, enforcing it until a good reputation for the high quality of my services is obtained.

•Whenever a doubt emerges, in relation to the right or to the ethics of my position or the action towards other people, solve it on your account.

•Look for success and demand for a just profit or remuneration that you rightfully deserve, but refuse all profits and rewards that could result in a loss or reduction of your dignity, as an effect of benefiting of any unfair advantage or any dubious personal action.

•Have always in mind your citizenship’s obligations towards your Nation, your Country and your community; always profess your constant loyalty in your thought, speech and action, dedicate generously your time, work and resources.

¡Let’s Change this Dilemma!

What are some of the things left for us to do? To enforce the basic principles of Corporate

Ethics. To establish a permanent and inclusive dialogue. To train on Corporate Ethics. To establish programs of Corporate Ethics. To form an alliance between the public sector,

the civil society (community) and the private sector.

To install an ethical business behavior in a sustainable and lasting way.