Chiquita Reinvents its Code of Conduct

//by Elizabeth Erickson

When Vanessa Vargas-Land joined Chiquita as Chief Compliance Officer in early 2007, one of the first initiatives she undertook was a program assessment to test the maturity of the Company’s overall compliance program. It was during this process that she recognized the need to update the foundation of the compliance program: Chiquita’s Code of Conduct.

When Vargas-Land joined the Company, the existing Code had been created in 2001, with minor updates made in 2005. “While the old Code was robust in and of itself from a substantive standpoint,” Vargas-Land said, “I envisioned that we probably needed to update it to create a more engaging document that would be visually appealing and better reflect who Chiquita was and is. Really, this was a great opportunity to do a complete update and bring it up to current standards of where we were in the business and what our policies and procedures were to date.”

“Chiquita has been in the banana business for more than 100 years so I was surprised that there weren’t any banana images in the old Code.”

Of course, no project is without its hurdles. Vargas-Land said one of the biggest challenges for her was convincing the full management team that change was needed. She said that she had to make the case that the Code needed updated content and more appealing visuals. She even suggested that the new code should be drafted at a reduced grade level to make it more accessible to a wider employee base.

There was also fear from management that external stakeholders—such as NGOs and customers—might view any changes to the Code as diminishing the standards that Chiquita had set for itself. “Obviously addressing those concerns and making sure that management was comfortable that we were not going to diminish or in any way negatively impact the substance of our Code was extremely critical,” Vargas-Land said.

One of the ways that Vargas-Land and her team overcame management’s concerns was by benchmarking their existing Code against the codes of other companies in the consumer products industry. She presented the management team with examples from Kellogg’s, Procter & Gamble and Sara Lee to give them a flavor for the types of codes that were out there. “I think that was extremely effective for both our management team and our Audit Committee,” Vargas-Land says. “In the end, we were able to overcome obstacles and gain approval to go ahead and update the Code.”

“What I’ve found most helpful was reading through [Ethisphere’s] analysis of different codes and specifically taking note of what were important factors… I clearly didn’t want to see a D or an F on my Code.”

During the updating process, Vargas-Land took what she learned from researching other codes and applied it to what she and her team were envisioning for Chiquita’s new Code. “If you look at a code, you’ll start to see that there is a general format,” Vargas-Land says. “They definitely have a flow to them. That was one thing that stood out to me: our old Code lacked this sort of easy to understand and easy to follow format.”

She also quickly realized that branding the new Code to Chiquita was an excellent opportunity to highlight who Chiquita is in terms of its people and its product. She saw that many other companies within the consumer products industry placed their mark throughout their codes. “In our old Code, that was one of the things that we were really lacking,” she said. “Chiquita has been in the banana business for more than 100 years so I was surprised that there weren’t any banana images in the old Code.”

Ethisphere’s regular 50 Codes of Conduct Review section also played a part in the development of Chiquita’s new Code. “What I’ve found most helpful was reading through [Ethisphere’s] analysis of different codes and specifically taking note of what were important factors,” she said. “For instance, [Ethisphere] would grade Codes on how understandable or readable they were, whether they had visual appeal, whether they were in a logical format, and so forth. That was very helpful in educating me in what the key attributes of a good or effective code was going to be. I clearly didn’t want to see a D or an F on my Code.”

The hard work has been well worth it. Now, Chiquita can proudly show off a model Code of Conduct, and employee feedback has been enthusiastic as well. “Most if not all of the comments I’ve received have been extremely positive,” Vargas-Land said. “Employees like the bold colors that we used, they like to see all the products that we have available to consumers reflected within the Code book, and obviously they like seeing their employee pictures.”

Vargas-Land stresses the value of a high-quality, effective code of conduct to an organization. “I think it’s easy for an organization, especially a large organization, to underestimate the value of a good code of conduct,” says Vargas-Land.

Just how strong is the correlation between a high-quality code and an effective compliance program? “To me,” she says, “all organizations that want to have an effective compliance program, that’s what they should shoot for.”

If your company recently revised its Code of Conduct, and you feel that your new Code is a standout in your industry, email slinssen@ethisphere.com with details. Your new Code could be featured in an upcoming issue of Ethisphere Magazine.

Vanessa Vargas-Land, Chief Compliance Officer for Chiquita, gives the following check list for companies that are planning on developing a new code of conduct:

• Do your homework.
• Review codes from other companies, both within and outside your industry, to understand the different options for format, style and tone
• Know who your key stakeholders are from the beginning, and make sure your Code’s style and tone appeals to that group.
• Know what your obstacles are and what you’re going to need to overcome them.
• Finally, organize and secure support from your management team on your revision course.