Alcoa's Bill O'Rourke Confronts Corrupt Business Practices in Russia and Other Emerging Markets

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Carnegie Council for Ethics in International Affairs

Jun 24, 2011, 08:00 ET

NEW YORK, June 24, 2011 /PRNewswire/ -- "I'm a firm believer that the companies that act correctly succeed, and they succeed in the long term," said Alcoa Vice President Bill O'Rourke on June 15, speaking at the Carnegie Council for Ethics in International Affairs. "It's very important, as you evolve in a corporation, that you build the kind of culture where doing the right thing is acceptable."

O'Rourke was the keynote speaker at an interactive Workshop for Ethics in Business, custom-designed for high-level professionals.

The group explored a series of mini-case studies drawn from O'Rourke's experiences, from standing up to corrupt government officials to dealing with kickbacks within his own organization. Although the focus was on Russia, businesspeople are often faced with similar ethical challenges in other emerging markets—and sometimes in developed ones as well.

For the transcript, audio, and video of this event, go to: http://www.carnegiecouncil.org/resources/transcripts/0409.html.

Why go into Russia at all? In 2010, Transparency International ranked it 154 out of 178 countries on perception of corruption and several multinational companies in Russia have been accused of corruption.

"The market opportunity was there," said O'Rourke, noting that the per capita consumption of aluminum in Russia was about 4 kilograms person in 2005, compared to 35-40 in the U.S. and Western Europe. There were big opportunities in the aircraft, packaging, construction, and auto industries, he said, plus there was the opportunity to buy two large manufacturing plants.

What were the potential pitfalls? "Number one on our list was corruption," said O'Rourke. "Number two was bureaucracy."

Another challenge proved to be training Russian staff in the Alcoa company culture. This included raising safety standards, tightening up accounting, implementing environmental stewardship, and, of course, changing the culture of corruption that permeates every aspect of Russian life.

"You have to let the employees know what the rules are and what the sanctions are going to be," said O'Rourke. He also learned never to jump to conclusions. The first step is always "to gather the facts."

The Carnegie Council's Workshops for Ethics in Business are designed to prepare current and future business leaders for the paradoxes of the real world. Featuring top executives of major companies, they are created in consultation with a core group of corporate/financial partners, as well as distinguished academics in the field of business ethics.

Bill O'Rourke has been at Alcoa for over 35 years. He was named vice president, Sustainability and Environment, Health & Safety for Alcoa in September 2008. Previously, he was vice president of Global Business Services and the chief information officer of Alcoa.

From the beginning of 2005 to 2008, he served as Alcoa president of Alcoa Russia, a $1 billion revenue business. He oversaw an investment program that exceeded $500 million.

The Carnegie Council for Ethics in International Affairs (www.carnegiecouncil.org), established in 1914 by Andrew Carnegie, is an independent, nonpartisan, nonprofit organization dedicated to increasing understanding of the relationship between ethics and international affairs.

SOURCE Carnegie Council for Ethics in International Affairs