I look at many things through a Foreign Corrupt Practices Act lens. It’s an occupational hazard I guess.
So when looking at this year’s “Most Ethical Companies” list published by Ethisphere, I looked for FCPA violators or companies currently under FCPA scrutiny – and like prior year’s – there were quite a few.
For starters, the “Most Ethical Companies” list has become diluted. This year, Ethisphere recognized 136 companies. By comparison, when Ethisphere first released its list in 2007 there were 92 companies. But who knows, perhaps companies have become ethical.
The following 2025 “Most Ethical Companies” honorees have resolved FCPA enforcement actions: ADM, Allianz, Cognizant, Lilly, HP, IBM, John Deere, Johnson Controls, Linde, Pfizer, Rockwell Automation, Goodyear, and Zimmer/Biomet (a FCPA repeat offender).
The following 2025 “Most Ethical Companies” honoree are currently under FCPA scrutiny: Leidos and Medtronic.
That a list of the “Most Ethical Companies” contains so many FCPA violators or companies currently under FCPA scrutiny is interesting (even if some of the FCPA enforcement actions occurred several years ago).
In the minds of some, companies that have resolved Foreign Corrupt Practices Act enforcement actions are bad or unethical companies.
It is a tempting position to take.
After all, the FCPA is about bribery and corruption.
However, it is a wrong position to take in many (but certainly not all) instances.
It surprises most people to learn that a company with pre-existing FCPA compliance policies and procedures – and a company otherwise making good faith efforts to comply with the FCPA – can still face legal liability when a non-executive employee or agent acts contrary to the company’s pre-existing FCPA compliance and procedures.
And rightfully so.
Yet because of respondeat superior principles or the government’s seeming strict liability approach to enforcing the FCPA’s books and records and internal controls provisions, the company is exposed to FCPA liability. Such pre-existing policies and procedures may be relevant to charging decisions or the type of resolution vehicle under DOJ / SEC non-binding policy or guidance as well as the ultimate fine amount under the advisory Sentencing Guidelines, but not relevant to liability as a matter of law.
But perhaps it should be.
Ethisphere describes its methodology as follows:
We evaluate an organization’s (i) Ethics and Compliance Program, (ii) Culture of Ethics, (iii) Corporate Citizenship and Responsibility, (iv) Governance, and (v) Third Party Management. Each category is evaluated through a combination of answers to our Ethics Quotient® (EQ) questionnaire, submitted supplemental documentation, and where necessary, independent research and follow up with a candidate. Evaluation also includes a review of publicly available information with a bearing on an organization’s reputation for acting ethically (e.g., public filings, regulatory activity, media review). If the review team has a concern after this independent analysis, we will reach out to the applicant to discuss.
