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Putting Credibility Into a Code of Conduct

Academi is obviously mindful of some of the past controversies its ancestral companies were embroiled in and has taken steps, as much as humanly possible, to make a repeat of such incidents impossible.
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For those who are familiar with what was once Blackwater, which became Xe Services in 2009, and then Academi in December 2011, the saying the third time is a charm comes to mind. That's because Academi is about to release a new Code of Conduct, which should go a long way towards assuring people that when it comes to responsible ethical behavior, Academi is putting serious internal oversight where its mouth is.

Now normally I'm not a big fan of business Codes of Conduct, considering them to be more glorified corporate seals of good housekeeping. As social scientists say, they may be necessary but are not sufficient. There is a certain, gee whiz, look, we have a Code of Conduct; now you can just take our word that we're on the side of the angels. Or, as Captain Barbossa famously said about the pirates' code in the Pirates of the Caribbean movie, "The code is more what you'd call "guidelines" than actual rules."

But, having obtained and read a copy of the code that Academi is set to publicly release this week, it's clear that it is determined to make the sort of incidents that gave Blackwater in Iraq such a controversial reputation a distant historical memory.

To start, consider the length of Academi's new code. It runs 33 pages. By comparison, the 2010 International Code of Conduct for Private Security Providers runs 16 pages. Academi, by the way, was the sixth company to sign that code, which now has 554 signatories.

Similarly, the Code of Conduct put out by the International Stability Operations Association, an industry trade group, which the original Blackwater was once a member of, runs just two pages.

Of course, size isn't everything. Other companies, such as DynCorp International, have similar lengthy codes.

But the duration of the process that led up to the code is a sign of the seriousness with which Academi undertook the process.

According to Suzanne Folsom, Academi's General Counsel and Chief Compliance Officer, who was reached by phone, the process started, when the company acquired new leadership in 2010.

The new owners wanted to make sure the company had strong commitment to ethical behavior and respect for human rights. Folsom joined in June 2011. She brought in a team with her. The goal was to create "best in class" when it comes to legal regulatory capability.

Academi brought in in the British professional service firm Price Waterhouse Coopers to help conduct an assessment of Academi's existing compliance with all relevant laws and regulations. They looked at the existing policies the company had in place, at what they should be doing, what they should have in place, and looked at what other companies were doing.

They also benchmarked companies in the Fortune 500, including the Fortune Top Ten. According to Ms. Folsom, it was a "soup to nuts extensive review of what was in place."

One thing they saw a need to revise was the code. Academi wanted it to reflect the highest degree of professional ethics and wanted it to delineate a core standard of ethical behavior. Most of their employees are either former military or law enforcement personnel accustomed to following rule, so they wanted to lay out in detail what the what rules are.

The code was reviewed and approved by the company's Governance Committee, which includes Academi board of directors members, former US Attorney General John Ashcroft and former White House General Counsel Jack Quinn.

While the first version of the Academi's code was completed at the end of 2011 it was not publicly released.

According to Ms. Folsom, "codes of business ethics and conduct should be for every corporation a living document. If they don't continually monitor, update and review it in an ever changing world that is when problems happen and we don't intend to have that happen." Thus, it will be reviewed annually and will be revised as necessary. As U.S. regulations and standards change so will the Code.

The code is not something that has been rammed down the throats of Academi staff and contractors for the purpose of public relations. According to a source inside the company, "We are 100 percent compliant with staff reviews and signatures."

Academi is obviously mindful of some of the past controversies its ancestral companies were embroiled in and has taken steps, as much as humanly possible, to make a repeat of such incidents impossible.

For example, perhaps you're familiar with the Blue Code of Silence, a staple of television cop shows, where an unwritten rule among police officers is not to report on another colleague's misconduct or crimes. If questioned about an incident involving another officer, while following the code, the officer being questioned would claim ignorance of another officer's wrongdoing.

It's safe to say that in the past decade we've seen the equivalent by contractors working in in Iraq and Afghanistan.

But Academi's code says:

"If you have good reason to believe or suspect that a violation of the Code or the laws and regulations governing our business has occurred, or if you are asked to violate the Code or a law or regulation, do not remain silent. Report such violations or suspected violations, Depending on the circumstances, failure to report may itself violate this Code. Remember that no unethical or illegal acts can be justified by saying that they benefited the Company or were directed by a higher authority in the organization."

Also, given that retaliation by people in company management echelons against workers who have seen something wrong and tried to do something about it, only to suffer consequences, as in no good deed goes unpunished, this language is to be applauded:

"Retaliation by any employee against an individual who reports a violation of law or Company policy is strictly prohibited. No hardship, loss of benefit, or penalty - which may include downgrading an employee's performance rating, limiting an employee's opportunities for assignments or advancement, excluding an employee from corporate or departmental functions, or general mistreatment - may be imposed on an employee as punishment for filing or responding to a good faith complaint or cooperating in an investigation.

It is contrary to Company policy for any person to request, pressure, or direct an ACADEMI employee to act in violation of law, regulation, contract requirement, this Code, Company policy, or any other obligation."

And then, with respect to one of Academi's core services, armed protection, there is this:

"The Company will exercise due diligence to determine the suitability of applicants and employees to carry firearms as part of their duties. At a minimum, this will include checks that applicants or employees have not been convicted of a crime that would indicate that the individual lacks the character and fitness to perform security services; been dishonorably discharged from the Armed Forces; had other employment or engagement contracts terminated for documented violations of ethical conduct or applicable laws and regulations; or had a history of other conduct that, according to an objectively reasonable standard, brings into question their fitness to carry a firearm."

Considering what happened in the past with some Blackwater contractors, such as Andrew Moonen, accused of murdering a security guard of the Iraqi vice-president in 2006, serious efforts at due diligence is to be welcomed. Although Moonen was an honorably discharged U.S. army veteran, so in and of itself, an honorable discharge by itself doesn't guarantee much.

That is why it was good to hear Ms. Folsom say it does not just rely on an honorable discharge as proof of professionalism, but also does other due diligence when hiring contractors.

When, back in the mid-nineteenth century, William Edward Hickson coined the proverb...

'Tis a lesson you should heed:
Try, try, try again.
If at first you don't succeed,
Try, try, try again.

... people were not thinking of private military companies. The British East India Company, one of history's most famous private military companies, was, by then, a shadow of its former self, having been taken over by the British government, and people like Erik Prince, founder of Blackwater was more than a century from being born. Yet Academi seems to have heeded and acted on Hickson's words. Given its reputation -- much like the old E.F. Hutton commercial, when it speaks, people listen -- in the industry, it is likely that many other PSC companies will be following its code.