1. TAMILLA CURTIS AND JOHN LEDGERWOOD EMBRY-RIDDLE AERONAUTICAL UNIVERSITY, USA THE COURAGE TO SPEAK UP A TEACHING CASE STUDY WORKPLACE AND PROFESSIONAL ETHICS What would you have personally done? MacroTrends Conference: New York 2015

2. OVERVIEW The Case Company Background The Ethical Issue The Course of Action The Foreign Corrupt Practices Act The Institute of Management Accountants The Case Discussion Questions

3. THE CASE Express Aircraft Leasing Corporation is a global leasing company Boeing, Airbus, and Embraer September 11 th 2001 attacks Prior company was very profitable (58% market share) After airlines were not buying or leasing aircraft New strategy To find a new way to retain and attract new customers

4. EXPRESS AIRCRAFT LEASING CORPORATION CEO Mark Gross Director of Finance Ella Williams, CMA Controller Michael Jones Treasurer Harry Grant CFO Greg Ornelas COO Erin Ward

5. THE CASE Mark Gross, CEO asks Greg Ornelas, CFO to secure a government airline leasing contract The conversation Payments to foreign officials Violation of the Foreign Corrupt Practices Act What should Ella Williams, CMA do?

6. THE COURSE OF ACTION The Foreign Corrupt Practices Act of 1977 (the anti bribery provisions) “…the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. … anti-bribery provisions of the FCPA prohibit use of the mails or any means of instrumentality… to a foreign official to influence the foreign official in his or her official capacity…” ( The US Department of Justice) Securities and Exchange Commission

7. SEC ENFORCEMENT ACTIONS: FCPA CASE SEC Charges Siemens AG for Engaging in Worldwide Bribery, 2008 Siemens has agreed to pay $350 million in disgorgement to settle the SEC charges, and a $450 million fine to the U.S. Department of Justice to settle criminal charges. Siemens also will pay a fine of approximately $569 million to the Office of the Prosecutor General in Munich, to whom the company previously paid an approximate $285 million fine in October 2007. (US Securities and Exchange Commission)

8. THE INSTITUTE OF MANAGEMENT ACCOUNTANTS IMA is a professional organization with offices in the USA, Switzerland, UAE, and China (70,000 professionals) IMA certification - the Certified Management Accountant (CMA) (45,000 CMAs in more than 100 countries) Exam part 1: Financial reporting, planning, performance and control Exam part 2: Financial decision making (10% of professional ethics) IMA Statement of Ethical Professional Practice Principles: Honesty, Fairness, Objectivity, and Responsibility Standards: Competence, Confidentiality, Integrity, Credibility

9. THE INSTITUTE OF MANAGEMENT ACCOUNTANTS IMA Resolution of Ethical Conflict Follow your organization’s established policies on the resolution of an ethical conflict. Discuss the issue with your immediate supervisor. Audit committee, executive committee, BOD, or owners A confidential discussion with an IMA Ethics Counselor or other impartial advisor. Consult your own attorney as to legal obligations and rights concerning the ethical conflict. (IM A, 2015)

10. THE CASE (CONT.) Research on FCPA and her ethical responsibilities as a CMA Felt more knowledgeable and confident Discussion with Chief Operating Officer, Erin Ward, COO Ella’s second manager Did not want to get involved Ella Holds a Meeting with Family and Friends To see the Audit Committee or the Board of Directors To talk to impartial advisor and an IMA ethics counselor

11. THE AFTERMATH Brought it to the Board of Directors Attention Chairman fires Greg Ornelas the CFO Mark Gross the CEO resigns with no comment The SEC fined the Express Leasing Corporation $15 million dollars Temporary ban on doing international business for two years Greg received three years in federal prison Good things happen to good people Ella was promoted to CFO Took part in the hiring process of the new CEO

12. THE MORAL OF THE STORY Ethics is a vital aspect in business and the workplace Since people spend a lot of their time at work, it is expected that they will be facing ethical issues and dilemmas BCI Aircraft Leasing Inc., and Its Owner Convicted in Illinois in $50 Million Fraudulent Financing Scheme, 2012

13. DISCUSSION QUESTIONS If you were in Ella’s shoes what would you have done? Explain. Why can it be difficult to blow the whistle? Discuss the FCPA act and the impact on the company’s competitive advantage. Discuss the IMA ethical professional practice guidelines such as principles, standards, and resolution of ethical conflict.