Manual for Azerbaijan companies Rena Safaralieva

A whistleblower, or a person who voices concerns, evokes anxiety in the West as well. Very few 

managers in either private or public sector companies would be pleased to have a whistleblower. 

However, requirements of the modern economy differ very much from the recent semi-criminal past and 

demand that all employees be honest towards company matters and themselves. Employees are expected 

to inform management of all problems, errors or mismanagement in a timely manner, as concealing such 

issues could cause substantial material and moral losses.  

 

Grievances can be of two types. An internal signal calls for internal investigation. External signals are 

used once all the hopes for a just and objective consideration within the company have been exhausted, 

and a complainant has no choice other than knocking at the doors of influential mass media.  

 

On August 10, 1978 three teenage girls died in Indiana, when their Pinto Ford car was struck from 

behind and the fuel tank ruptured and exploded. They were the latest in the long list of people (180) to be 

burned alive, because due to a hasty release, the Pinto model was not tested for a strike from behind. 

Company research revealed that, had the company installed a special shield between bumper and fuel 

tank (worth between $6.65 and $11), the safety standard of the Pinto model would be comparable with 

other cars of its class. However, between 1971 and 1978 the company did not upgrade the model, as 

Ford’s cost- benefit analysis revealed that it was 3 times cheaper to settle cases in courts than to upgrade 

the model. In addition, the company did not inform its customers that this model was less safe than other 

similar models. The period of 1976-1977 saw 13 explosions as a result of a strike from behind, which 

exceeds accident rate for other similar cars by a point of two. However, eventually, settlements of claims 

raised against Ford reached $20,9 million, which was much more than expenses for upgrading the model. 

In addition to court penalties, Ford was forced to recall 1.5 million cars built between 1970-76, not to 

mention the impact of declining sales. Former administrator and designer Harley Kopp publicly criticized 

the model from the very beginning. He quit the company and went public, which saved many human 

lives. Can he be qualified as whistleblower? 

45

  

 

Ethical communication can be structured in a number of ways, depending on company’s preferences: 

from a special ethics service to a hotline. Regardless of how a corporate ethics structure is organized, the 

following principles are strongly recommended to be observed:  

•

 

Some companies accept anonymous complaints, however, the company should politely explain to its 

employees that disclosure of their identity would certainly facilitate consideration of an application. In 

addition, guarantees of confidentiality of information shall be provided.  

•

 

An employee should be convinced that his or her application will be reviewed with all due respect and 

diligence. In any case, an applicant should be informed of the course and results of the subsequent 

investigation.  

•

 

Investigations should ensure that rights of both the claimant and defendant are protected.  

 

Filing ethical complaints    

 

Employees, filing grievances and complaints, shall be guaranteed that they are safe from possible 

retaliation. To convince employees of their immunity, companies publish booklets, reference books and 

other materials with names, addresses, and telephone and fax numbers, e-mail accounts of a corporate 

ombudsman or ethics officer and make these materials available to personnel. Employees have to be 

confident that every whistleblower, who has applied to a relevant department to file a grievance or signal 

evidence of fraud, corruption, abuse of finances, sexual harassment, persecution of subordinates and other 

violations, will be safe from reprisal by the accused.  

 

It goes without saying that a complaint should not be based on idle rumors. When filing a complaint, an 

employee should provide exhaustive answers to a set of following questions: who, how, when and, if 

possible, why, as cases based on rumors or not substantiated with facts can damage reputation of innocent 

people.  

 

                                                 

45

 R. T. George, Business Ethics,    vol.1, St-Petersburg, 2001, Progress Group Publishing House,  pp.  405-407  

---

Ethics infrastructure: who is a corporate ombudsman? 

 

An ombudsman is a human rights defender. In Azerbaijan, the Law on Ombudsman was adopted by the 

Parliament  in December 2001. Every employee of a company in need of help in regard to business ethics 

problems may apply to a corporate ombudsman and receive consultation, with confidentiality of his or her 

application guaranteed. If necessary, the ombudsman makes recommendations to company management 

to take certain measures. For example, at United Technologies, the ombudsman informs relevant parties 

of emerging problems and monitors the process of application review. Employees normally maintain 

telephone contact with the ombudsman. However, other types of communication (post, fax, e-mail) are 

also available. As a rule, the ombudsman is an outside consultant.  

 

On the other hand, an ethics officer could be employed by a company and have a special ethics 

department at his or her disposal. If the ombudsman’s duty is to receive and pass on an alarm signal, the 

ethics officer is directly involved in the investigation. Some companies might have both structures in 

place. Small firms normally delegate ethics officer’s functions to human resources managers and 

ombudsman’s services are provided by an outside consultant.  

 

The World Bank has designed a Conflict Resolution System (CRS), a special program to settle ethical 

issues, which involves five independent departments:  

•

 

Office of Ombudsman; 

•

 

Office of Mediation;  

•

 

Office of Ethics and Business Conduct;  

•

 

Affairs Committee; 

•

 

Administrative Tribunal. 

 

Moreover, the management of the Bank, being interested in swift and efficient settlement of any conflicts, 

offers a broad spectrum of assistance from other departments, such as: 

•

 

managers;  

•

 

human resources department;  

•

 

counselors on harassment problems; 

•

 

internal audit department 

46

. 

 

We believe that Azerbaijani companies should design and adapt their own codes of conduct. Global 

experience shows that the very existence of such a document, combined with demonstrated management 

commitment to principles of business ethics, can prevent many ethical violations.  

 

  

SELF ASSESSMENT  QUESTIONS TO CHAPTER VI. MECHANISMS OF 

IMPLEMENTATION OF PRINCIPLES OF BUSINESS ETHICS 

 

The questions below are designed to assess  your understanding of the material.  

 

Corporate ethical documentation   

♦

 

What is a code of ethics? 

♦

 

Do Azerbaijani businesses need codes of ethics? Please, substantiate your opinion.  

♦

 

Why codes, first of all, state company values and goals?  

♦

 

What are the stages of code preparation?  

♦

 

Shall codes of Azerbaijani companies, on the whole, follow main provisions of international 

companies or shall each company set its own ethics standards?  

Ethical communication and grievances filing. Whistleblower.  

♦

 

Who is a “whistleblower”? 

♦

 

Will our companies be able to create conditions, where whistleblowers are safe from persecution? 

What shall be done to ensure their safety?  

♦

 

What is the difference between a corporate ombudsman and an ethics officer?  

                                                 

46

 THE WORLD BANK GROUP, Living Our Values, World Bank Publication  

---