Why Arca Continental leads with values over rules in its multinational E&C program


What you'll learn on this podcast episode

When it comes to driving ethical behavior in organizations, many ethics and compliance programs are beginning to focus more on leveraging company values than relying primarily on rules. But what does taking a values-based approach look like in practice, especially if you’re a multinational organization? How do talk about it with a wide range of employee populations? In this episode of LRN’s Principled Podcast, Susan Divers is joined by Gabriela Del Castillo, the chief ethics and compliance officer at Arca Continental, to discuss the importance of creating a respectful workplace and the role that E&C plays in developing ethical culture. 

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Guest: Gabriela Del Castillo

Gabriela Del Castillo – Grayscale

Gabriela Del Castillo is the global chief ethics and compliance officer of Arca Continental, the second-largest Coca-Cola bottler in Latin America—and one of the largest in the world. She leads the construction of the company’s corporate sustainability through the management of ethical and compliance risks. In addition, she designs mitigation strategies—including policies, controls, and procedures—as well as communication and training initiatives for Arca’s ethics and compliance program. Gabriela also serves as the secretary of the Audit and Corporate Practices Committee for the organization’s board of directors. 

Prior to joining Arca, Gabriela was the regulatory affairs corporate manager at the food and beverage services company Empresas Polar. In this role, she helped the organization adopt risk management and compliance processes to anticipate risks and opportunities in the regulatory and legal fields. She also designed strategies to minimize costs or capture savings, based on a deep understanding of the company’s operations and stakeholders. Before that, Gabriela worked as a legal analyst for Siderúrgica del Orinoco, C.A. SIDOR, a Venezuelan steel corporation. 

Gabriela earned a master's degree in international legal studies from Georgetown University and graduated magna cum laude from Universidad Central de Venezuela. She also received a marketing and innovation diploma from Instituto de Estudios Superiores de Administración IESA in 2017. 

Host: Susan Divers


Susan Divers is a senior advisor with LRN Corporation. In that capacity, Ms. Divers brings her 30+ years’ accomplishments and experience in the ethics and compliance area to LRN partners and colleagues. This expertise includes building state-of-the-art compliance programs infused with values, designing user-friendly means of engaging and informing employees, fostering an embedded culture of compliance and substantial subject matter expertise in anti-corruption, export controls, sanctions, and other key areas of compliance.

Prior to joining LRN, Mrs. Divers served as AECOM’s Assistant General for Global Ethics & Compliance and Chief Ethics & Compliance Officer. Under her leadership, AECOM’s ethics and compliance program garnered six external awards in recognition of its effectiveness and Mrs. Divers’ thought leadership in the ethics field. In 2011, Mrs. Divers received the AECOM CEO Award of Excellence, which recognized her work in advancing the company’s ethics and compliance program.

Mrs. Divers’ background includes more than thirty years’ experience practicing law in these areas. Before joining AECOM, she worked at SAIC and Lockheed Martin in the international compliance area. Prior to that, she was a partner with the DC office of Sonnenschein, Nath & Rosenthal. She also spent four years in London and is qualified as a Solicitor to the High Court of England and Wales, practicing in the international arena with the law firms of Theodore Goddard & Co. and Herbert Smith & Co. She also served as an attorney in the Office of the Legal Advisor at the Department of State and was a member of the U.S. delegation to the UN working on the first anti-corruption multilateral treaty initiative.

Mrs. Divers is a member of the DC Bar and a graduate of Trinity College, Washington D.C. and of the National Law Center of George Washington University. In 2011, 2012, 2013 and 2014 Ethisphere Magazine listed her as one the “Attorneys Who Matter” in the ethics & compliance area. She is a member of the Advisory Boards of the Rutgers University Center for Ethical Behavior and served as a member of the Board of Directors for the Institute for Practical Training from 2005-2008.

She resides in Northern Virginia and is a frequent speaker, writer and commentator on ethics and compliance topics. Mrs. Divers’ most recent publication is “Balancing Best Practices and Reality in Compliance,” published by Compliance Week in February 2015. In her spare time, she mentors veteran and university students and enjoys outdoor activities.


Principled Podcast transcription

Intro: Welcome to the Principled Podcast brought to you by LRN. The Principled Podcast brings together the collective wisdom on ethics, business and compliance, transformative stories of leadership and inspiring workplace culture. Listen in to discover valuable strategies from our community of business leaders and workplace change makers.

Susan Divers: When it comes to driving ethical behavior in organizations, many ethics and compliance programs are beginning to focus more on leveraging company values than relying primarily on rules. That trend is growing rapidly. In fact, insights from the 2023 Ethics & Compliance Program Effectiveness Report that LRN puts out every year validate a central lesson, which is that the most effective programs, those that take a values-based approach to governance and culture and leadership, correlate strongly with reduced risk and better business outcomes. But what does taking a values-based approach look like in practice, particularly if you are a multinational organization? And how do you talk about it with a wide range of employee populations? Hello, and welcome to another episode of LRN's Principled Podcast. I'm your host, Susan Divers, the director of thought leadership and best practices at LRN. Today I'm joined by Gabriela Del Castillo, the director of ethics and compliance at Arca Continental. Welcome, Gabriela. 

Gabriela Del Castillo: Hello, Susan. Thank you very much for the invitation and the opportunity to share with your audience all the experiences that we have had here in Arca. 

Susan Divers: Thanks so much, Gabriela. We're going to talk today about the importance of creating a respectful workplace and the role that ethics and compliance plays in developing ethical culture. Gabriela is an expert in this area with over two decades of experience in legal compliance and corporate regulatory affairs. Gabriela, let's jump right in. Before we start talking about the work you've been doing lately in ensuring a respectful workplace at Arca, can you describe your E&C program and the ethics and compliance challenges you face in your business and operations? Arca is a major soft drink bottler in Mexico and it has many frontline employees, so it would be helpful to also touch on the challenge of reaching and engaging all of your employees. 

Gabriela Del Castillo: Well, Susan, the ethics and compliance office is relatively new. We start creating the structure in 2018. Before that, the audit department, the internal control department, and also the communication department were in charge of some of the functions of the compliance area. In 2018, I entered the company and I start creating some new processes, designing the structure and reviewing the work of these areas. For example, we have done some improvements on the hotline and all the report system and dedicated too much time to review the way the ethics committee investigate and decide our reports. All this function has the support of the board, especially of the audit committee, and not just the support but the supervision and the guidance of the audit committee. We have real commitment from our board to continue with this work and improve all the initiatives that the company has in place. 

The first three years of this department, we dedicated to improve the report system. As I said, we change our provider of the hotline and we reviewed very carefully the work of our ethics committee. We have ethics committees in every country, and in some countries we have more than one, for example, in Mexico, that is a very broad territory. We have five more in different geographies inside Mexico. Also, there is a central or corporate committee that reviews some kind of reports of some of the VPs or directors of the corporation and also from the country. We dedicated our attention the first three years to those subjects and also to review the work and the controls that we have in place regarding anti-corruption, anti-bribery, and anti-money laundering, those are the basic subjects that an area of ethics and compliance dedicate to. The next three years, we started working on more complex subjects as anti-trust and data privacy, and recently we are working on respect and harassment, and I believe we are going to talk a little bit more about that. 

There is a continuous effort to improve the speak up in the company, I think that is basic to the ethics effort, and also to be sure that our reports are investigated in the right way and the consequences are applied consistently between the countries and between the operations. That has been the focus of this three year cycles that we are right now. We have a challenge, an important challenge, and you mentioned that we are a big company, 90% or 80% of our workforce are frontline workers that are not in an office but driving on the street. That is a difficult inherent to our business because our drivers doesn't have many touch points with corporate communication, so it's difficult to reach them, but we have initiated communication strategy since 2021, trying to reach all of them. We have been very creative to do that. 

We also have a special training for them, and it's the first time we have a global effort to reach them and to train them with the same messages, ethic messages, with the same content. The last year we reached 70% of our frontline workers and I very proud of that because it was a huge effort from many departments in the company. 

Susan Divers: Gabriela, that's very impressive. It sounds actually like you've been there 10 years from all that you've done, and reaching 70% of your frontline employees is a goal that I know many companies wish they could achieve too. Let's turn to your focus in your ethics and compliance program where you've really been transitioning away from relying principally on rules to drive ethical behavior and focusing more on values. Can you tell me what led to that transition? 

Gabriela Del Castillo: Well, Susan, rules and enforcement continue to be an important part of our work here in Arca. We still dedicate a lot of time in developing our policies, in improving our hotline, but also in parallel we're working in our culture and in our values, because the two approaches work for different purposes regarding ethics and compliance. For example, when we work on rules and we improve our policies, we are approaching to the peace behavior that are deliberately committed. Let me be clear. When a person misbehave, they are just afraid about consequences. They are thinking if they're going to be caught and if they're going to be sanctioned. So you need very clear rules that state that you are going to sanction those activities, and they need to see that the system works, that the investigation and the reports are taken seriously, and that we apply consequences to all those behaviors. 

So we still need to work about rules and about the decision making process of the ethics committee to assure this person that there are going to be consequences. But for people or for behaviors that are on gray areas or for behaviors that are not black and white, you need to have values and you need to have communicated to your associates, be clear about the impact of the behaviors on the company. So when this person faced a situation that is not clearly bad, this person can make the right questions to define how he needs to behave. So those gaps are filled by values. So you need to work in paralleling rules and in values to cover all kind of situations that you can face. For values, we need a different strategy. You don't need policies or you don't need controls, you need more communicate, create awareness, train, you need the leaders to incorporate in the language those values, you need to incorporate that language in the operations routines and operations communications. 

At some point you are going to be in the environment of the company, so you're going to be part of the culture, the associates are going to face those values every time they are taking decisions. So that is more complicated than creating rules and then investigating and applying consequences to bad behaviors, but it's something that makes a difference and also created different values for the company. For example, we see clearly that those values help us hiring people, attracting talent, and also retaining them in the company. That's a very solid example about how values related to ethics and compliance can have an impact in the operation. 

Susan Divers: Thanks, Gabriela. That's a really excellent way of thinking about rules and values as complimentary and playing different roles in the company, and I've been very impressed with the work that you've done in the area of anti-discrimination and anti-harassment because I know that's another example of what you were just talking about, because you're focused principally on building respect, civility, and kindness as the basis for discrimination and harassment. Can you tell us a little bit about that and how you came to take that approach? 

Gabriela Del Castillo: Yes. To be very honest, Susan, I approached the board with a very traditional strategy for harassment, and when we were presenting that to our CEO, he was the one who said, "We are not working on a regular harassment strategy for Latin America," because we have harassment effort in the US operations from long time, but we needed to have a global approach and to have a initiative for Latin America. But he said, "No, we are going to build on respect, we're going to have a broader approach to this subject, because we can create value if we start talking about respect in our company. We don't have that much cases about harassment or discrimination here, but we have these minor disrespectful behaviors that can really hurt the company, and we also have these kind of behaviors that are not black and white, that people doesn't get very well if they are misbehaving or not, but those gray areas we need to address them, and they are not harassment, but they also create harm in the company." 

But he also said there was a lot of opportunity to create value from this civility treatment between us to respect in the daily interactions that we have between associates or with our clients, with our providers, and give you respect as a common ground between our operations. We can have different views about what is harassment because we have some cultural and generational differences that could make us think different about what is harassment and what is not, but when we say respect, all of us know what are we talking about, we don't need to write a definition of respect here, he said, because we all are going to understand at the moment what is respect. So that's our common base and it's easier to start communicating from this world of respect than communicate about harassment. That was his view, and we got it at the moment, and we start working in a multidisciplinary team. 

And when we started working, we realized that we didn't have those cases about harassment and discrimination, there were few cases about this, but we start analyzing this minor disrespectful behaviors that we have and the number of behaviors, and we realize that we have a lot of this minor disrespectful behaviors in our operations, and that was an opportunity because that really creates a bad workplace environment for everyone. And also we start reading some papers and talk with some experts about this value of civility and also we reviewed our general service between our associates and we find out that younger generations, especially the younger generations, were asking for a more civil environment, a more civil interaction between associates, so everything makes sense. We needed this approach for so long and the CEO made clear for us where was the path that we need to take, and we are working on that right now. 

Susan Divers: That's, again, very impressive to take the approach that focuses on the minor things that can lead to major problems, and you were saying minor disrespectful situations, it's really a slippery slope that, if that's accepted, can lead to much more serious problems, but also focusing on civility in the workplace I think is helpful for everybody in the company. Tell us a bit more about that, especially for the benefit of other companies or ethics and compliance professionals. How did you go about it? What's the reaction of your employees? And what have been the biggest challenges? 

Gabriela Del Castillo: Well, Susan, we choose this broader scope for our respect strategy and that implied complex project. So we created this multidisciplinary team with experts from many departments of the company because we needed a different approach, different than the traditional compliance approach. We are not only creating policies, communicating and training the associates. We also are changing business processes and HR processes. We are creating new roles for HR functions. We are creating new responsibilities for business leaders. That's a non-traditional approach to this compliance issue, especially when we are analyzing these behaviors that we want to promote, because these strategies make clear that we don't tolerate harassment or discrimination. As I said, we are trying to create value from respect. So there are behaviors that we want to promote, and the way to promote behaviors is with a different kind of approach. 

The training is not the traditional training or in learnings. We need to use more role plays and expert talks, and we need the leaders to cascade some behaviors, and we need to hear experiences from other associates. So it's very different approach to the training. And we also are relying on leaders to create this learning environment for their teams. So for us, it's really important to train the trainers, and we are starting with the highest leaders in the company in this process of cascading all the concepts, the techniques, the principles that we are included in our respect strategy. But we also are writing a new policy. This new policy is not only going to cover the harassment issues, but it's going to be written in a way that reflects our concept and definitions about respect. We are going to include these behaviors that we want to promote. As an example, we see as a pillar of respect to have effective communication between associates. 

So that's a behavior that we are going to develop and we are going to train here in Arca. This training path is also very complex and it's going to last at least three years. We are going to approach different audiences of our associate with different activities. It's a very important initiative, the training and the communication, but there is a lot of enthusiasm and confidence in us. Some of our colleagues have reached us to say that their teams are excited about the idea of having this new approach in the company that, they believe that the workplace is going to be better. It's not bad right now, I need to say that, many times. They are sure that we are going to have an impact in our workplace and, as I said, new generations needs to have a nicer workplace where to work. 

I'm not saying that my generation or the previous ones, I used to work in different environments, but we were raised by tough leaders, we get used to them, and I'm not saying that it's right. I think that's one of our main challenge is to try to explain people that an effective leader doesn't need to be a tough leader. And I think that's one of our main challenges, culture and generational issues in our company. For example, this approach to leadership as a tough guy. So we need to teach leaders how to have difficult conversations in a different way, how to have negative feedback in a very civil way. Those are the plans that we have. I have hope that we are going to have a great impact in our workplace. 

Susan Divers: Well, it certainly sounds like it. It's very impressive the way you've tackled the traditional bosses have to be tough guys stereotype, helping people recognize the limitations there, and really working with them so that you increase civility in the workspace. Let's turn to your ethics and compliance program as a whole. At LRN, we always see ethics and compliance programs as works in progress. It shouldn't be static. Your program should evolve and adapt and improve over time. Where are you on your journey, and what are your highest priorities currently? 

Gabriela Del Castillo: You're right when you say that it's a work in progress. We haven't worked in all complaints areas yet here in Arca. We are still working. For example, in this new harassment strategy. So there is a lot of work that needs to be done here. We have different levels of maturity in the compliance issues here. For example, anti-briber and anti-corruption is a very mature subject because we have dedicated many years to work on those controls and those policies. And there are other subjects that we are working very hard, but they are still evolving, and some areas that we would like to review in more detail. Our level of awareness is very different also between countries, between operations, and also between frontline and administrative associates. That is because our main efforts have been in educate our administrative associates. But as I said, with this new approach, we are reaching the frontline in a very creative ways in the very different operations that we have. 

Also, I'm very proud of the training that we have prepared for them because we are really sending that common message to all our workforce in the five countries. I think we needed this common approach to this subject of ethics and compliance to prioritize all the subjects and talk about the same issues in the same countries. And with this different approach, we have reached, as I said before, 70% of our frontline workers. That's really, really a lot of people. I'm very proud. And we have a lot of work still to do. This communication campaign that we have designed, especially for this next three years, is going to last at least 24 more months, we have a calendar for this communication activities, key messages for each year. That is a lot of execution and operating work that we are going to do, but we have seen the results in the service that people is right now more aware about, for example, the ways they have to report a situation. 

And not only aware of about that, but we also have improved the survey specifically in the questions that refers to confidence on the report system and the hotline and the answer of the company. That for me is the best evidence of the good work that we are doing regarding communication and training, that associates have more confidence and we have solid numbers to show that. And also we have seen an increase in the monthly number of reports over the 2022. So there are 18 month of continuous increase in the number of reports that we have received. And for us that's good news because the maturity level of our company in this ethics and compliance area, in our maturity level is a good sign to have more reports because that means that the associates are speaking up, and that's one of our goal, to have all our associates to report the things that they can see that are against our code or our policies. As I mentioned before, we need to be sure that ethics and compliance and respect and the other subjects we're working on become part of the culture of the company. 

And that's very difficult task for us, very difficult goal, because you need to continue working on communication, you need to persuade the business to speak your language, to use the terms that you want them to use, to include those concept and principles in their routines, in their communications, and that takes time, but I think we have the support that we need. I think we are getting more confidence from our associates that is going to show us real good results in three years, I'm sure about that. And we also are writing a new code in that effort to make ethics part of the culture of the company. I think the code is going to be a very important effort to communicate ethics as part of culture. So that's also an initiative for this 2023. 

Susan Divers: At LRN, we always say, "Your code of conduct is your culture written down." That is a really important step to take. Gabriela, we're almost out of time, so let's close with one last question. What you've done has been a tremendous amount and clearly very impactful in a relatively short space of time. What advice do you have for other companies that want to shift to a more values-based approach and really take a long-term view of their programs the way you have? 

Gabriela Del Castillo: Susan, I remember what our CEO said, that respect make easier for us to develop this strategy, and talk about harassment and discrimination. And that is because when you are in a multicultural corporation as we are, respect or any other value create a common ground, a common understanding between all the nationalities and cultures so that from this common ground it's easier to build the strategy and to talk later about more specific subjects as harassment or discrimination. So when you build from a value it's more easier for a multicultural company to develop your strategy. We don't need to explain too much what respect or value is. It's a common ground that we need to take the advantage of this common understanding about values to develop strategies. The other thing, or our second understanding, is that civility, and that is the value that we're working right now, creates value for the company. 

It's not just that we are going to avoid cost, avoid litigation, or avoid reputational damages. We are going to have more creative, motivated, more productive workforce that's add value to the company. It's not that our CEO is very intelligent, that he is, but that he's also been subject of many research and papers from experts at the universities. There is enough evidence that this more motivation and more creativity and more productivity, you get that when you improve your workplace with a more civil approach, with more kindness, with more respect. And there is also evidence of the contrary. There is enough evidence that when you have toxic workplaces or when you have disrespectful workplaces, when there is a lot of harassment in the workplace, not only the people is going to leave your company, but the people who is going to stay is going to be less productive, is not going to be more afraid of giving opinions, and that is going to be reflected in your performance and in your results. 

But we are not just avoiding this cost, we are creating, and this creating of respect, of civility, is also going to help us with the retention problem that we have, with the rotation, and we are sure we're going to hire more talented people and the people who is with us is going to stay with us for more years. The third thing that I want to say is that respect is circular. And that means that when you treat in a civil and kind way to one of your colleagues or your associates, that have exponential effects, and that means that you are going to behave in the same way in your house, with your client, in your environments. And at the end we can have also this beneficial effect on our communities. So that's creating value and that is one thing that we want to pursue. 

Susan Divers: I love that analogy to a virtuous circle, that if you embrace, respect and kindness in one area of your life, it has a spillover impact both into families and hopefully into communities. That's a great note to end on, Gabriela. I could have this conversation with you all day, but we're out of time for today, so thank you so much for joining me for this episode. 

Gabriela Del Castillo: Thank you so much, Susan, and I hope I can share with you the results of my respect strategy. Thank you. 

Susan Divers: Definitely. You've got to come back and let us know maybe in six months or a year the impact you've had because your whole program has been so impactful. My name is Susan Divers, and I want to thank everyone for listening to the Principled Podcast by LRN. 

Outro:   We hope you enjoyed this episode. The Principled Podcast is brought to you by LRN. At LRN, our mission is to inspire principle performance in global organizations by helping them foster winning ethical cultures, rooted in sustainable values. Please visit us at LRN.com to learn more. And if you enjoyed this episode, subscribe to our podcast on Apple Podcasts, Stitcher, Google Podcasts, or wherever you listen. And don't forget to leave us a review.


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