Martin Sorrell, Chief Executive of the U.K based WPP Group said, “I believe it will be increasingly important to do business internationally; I believe it will be increasingly fascinating to do business internationally, but I do not believe it will become any easier - it may indeed become more complex.”

If today ethics and compliance are being discussed and worked upon so fervently, it is because of this intense complexity involved in global business.

Why is ethics and compliance all that important?

You have seen big corporations slump down with their reputations damaged by critical ethical issues. It is not easy to build up a corporate image and to sustain it, your values count. In the larger perspective of global business ethics has a greater say than many other factors.

The acceptance of ethical compliance in business is what influences your decision to choose to do business with a value driven company. What difference does it make to do partner with an ethical organization? The most significant answer is ‘risk'. You have an environment of values and your risk factor is reduced to the minimum.

An ethically compliant organization will have:

• Positive work environment

• Well defined systems to ensure values are not just written documents

• Reduced employee cynicism

• Compliance with law

• Reputation as a credible and responsible business organization

Is the existence of compliance programs a clean chit to ethical compliance? This is indeed a tricky question. You can set standards, but how are you complying with those values that you have set. An interesting revelation in the 2005 National Business Ethics Survey (NBES) is that though compliance programs have been able to do their bit, organizational culture has greater influence in determining the success of compliance programs. This demands your shrudeness to probe into the organizational culture of an organization before entering into a contract.

How will I identify if a company is ethically compliant?

• You can check for an ethics and values policy. But remember it is not just about having a written document but the literal compliance to the set standards

• Evaluate the thread of ethics, compliance and organizational culture. Good corporate governance is defined by the mutual compatibility of all these

• How open and clear is your vendor? The transparency that he offers you will decide the smoothness of your partnership

• See if your vendor is addressing your high priority concerns. Also ensure that he has systems and programs in place to ensure that you will not be at risk

• Ask if there is a good process in place for reporting ethics and compliance issues

• Make sure that your vendor company ensures employee credibility

Why is ethics and compliance important in financial outsourcing?

Why do outsourcing projects fail? One main reason will be non compliance of ethical standards. Ethics is important in all phases of business. The degree of its significance is much more when it comes to financial outsourcing.

You are here outsourcing a core business function where you need to ensure trust and credibility. If you do not want to end up having sleepless nights thinking about the security of your information and the future of your outsourcing business, an ethical outsourcing partner should be your choice.

The basis of an outsourcing relationship lies in how much of clarity you can bring in to that relationship. Ethics matters the most when things go wrong. When you are at risk everything boils down to the values that both the companies uphold. Moreover, long term success of any business depends on its ethical values.