Creating a Global Ethics & Compliance Program that Will Truly Promote and Reinforce Ethical Behavior

Transcription

1 Creating a Global Ethics & Compliance Program that Will Truly Promote and Reinforce Ethical Behavior Joel Rogers, VP Ethics, Compliance, and Content Strategy Kaplan EduNeering Monica Francois Marcel, Partner, Language & Culture Worldwide LLC Society of Corporate Compliance and Ethics 6500 Barrie Road, Suite 250, Minneapolis, MN 55435, United States or Regulatory Requirements Society of Corporate Compliance and Ethics 6500 Barrie Road, Suite 250, Minneapolis, MN 55435, United States or

2 U.S. Federal Sentencing Guidelines (2004) promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law. U.S. Sentencing Guidelines, 8B2.1(a),(a1),(a2) communicate periodically and in a practical manner [aspects of an organization s] compliance and ethics program U.S. Sentencing Guidelines, 8B2.1(b)(4)(A) establish [a] communication [program that] is ongoing, requiring periodic updates Commentary, 2004 Federal Sentencing Guidelines publicize a system whereby employees and agents may report or seek guidance regarding potential or actual criminal conduct without fear of retaliation U.S. Sentencing Guidelines, 8B2.1(b),(5),(c) or Sarbanes Oxley (2002) Section 301 publicly traded companies must establish procedures for the confidential and anonymous submission of concerns regarding accounting or auditing matters Communication that encourages reports and details reporting procedures is essential Section 404 requires that CEOs and CFOs certify adequacy of system of internal controls to result in accurate financials or

3 Federal Acquisition Regulation (FAR) (2007) Now requires ongoing business ethics and business conduct awareness program Within 90 days of engagement for qualifying contracts or Building an Ethical Culture Society of Corporate Compliance and Ethics 6500 Barrie Road, Suite 250, Minneapolis, MN 55435, United States or

4 Ethics Resource Center 2007 National Business Ethics Survey Results Six elements of a negative work environment include: Lack of information from top management Lack of trust that top management will keep promises and commitments Lack of satisfaction with information from supervisors Lack of trust that supervisors will keep promises and commitments Lack of trust that coworkers will keep promises and commitments Rewards for employees who are successful, even if through questionable means or ERC Survey Findings Greater number of negative factors = increased misconduct 100% 80% 60% 40% 20% 0% Zero One Two Three Four Five % or

5 Communication and Trust Actions, not just words Tone at the top Top management s actions demonstrate commitment to ethical standards Tone at the middle Who does the employee see as leader? Who holds them accountable? or Responsibilities of Management at Every Level Abide by principles and serve as a good example Be willing to talk about ethical implications of all actions and ideas Support compliance and ethics initiatives Provide guidance to subordinates Consider excellence in business ethics as part of the performance evaluation Encourage questions and reports No retaliation Action will be taken Standards do not change due to circumstances e.g. bad economy Seek ideas and vision from employees They will have ideas on how the Company can be progressive as well as sustainable or

6 Best Practices Ethics Programs Society of Corporate Compliance and Ethics 6500 Barrie Road, Suite 250, Minneapolis, MN 55435, United States or A Code of Conduct that communicates the distinct ethical culture of the company or

7 U.S. Federal Sentencing Guidelines (2004) promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law. U.S. Sentencing Guidelines, 8B2.1(a),(a1),(a2) communicate periodically and in a practical manner [aspects of an organization s] compliance and ethics program U.S. Sentencing Guidelines, 8B2.1(b)(4)(A) establish [a] communication [program that] is ongoing, requiring periodic updates Commentary, 2004 Federal Sentencing Guidelines publicize a system whereby employees and agents may report or seek guidance regarding potential or actual criminal conduct without fear of retaliation U.S. Sentencing Guidelines, 8B2.1(b),(5),(c) or Ongoing Communication Once a year Code of Conduct training is not enough Lessons learned from advertisers and marketers A second exposure to an ad increases familiarity and believability by 14%-28% A third exposure to an ad doubles the effect of one exposure Consumers have to be exposed to an ad on average between 9 and 21 times before they are ready to buy or

8 Multiple Learning Styles or Integrated Product Marketing Public Relations Print Advertising Television Advertising Product Placement Dealer Meetings and Promotions Billboards Trade Shows Face-to-Face Sales Web and Strategies or

9 Integrated Product Marketing Public Relations Print Advertising Television Advertising Product Placement Dealer Meetings and Promotions Billboards Trade Shows Face-to-Face Sales Web and Strategies Integrated Ethics Marketing Articles Company Newsletters/Magazines Ads in Company Publications Company TV Network Integrate Ethics Message into Orientation Manager s Training Facility Bulletin Boards Kiosk or Table at Company Events Instructor-Led Trainings Web and Strategies or or

10 Create a Communications Plan Defines communication & training elements and timeline for deployment Identify Company Communication Channels Plan to Develop Communication Tools Create Timeline for Deployment or Multi-year Skill Building Code of Conduct Training YEAR 1 YEAR 2 YEAR 3 YEAR 4 Code of Conduct Training for All Employees Code of Conduct Training for New Employees Raising Issues, Reporting, Retaliation Training for All Employees Raising Issues, Reporting, Retaliation Training for New Employees Ethical Decision Making Training for All Employees Ethical Decision Making Training for New Employees Building Trust Training for All Employees or

11 Creating A Global Ethics Program Society of Corporate Compliance and Ethics 6500 Barrie Road, Suite 250, Minneapolis, MN 55435, United States or Primary Concerns of Global Programs 266 Ethics Officers/General Counsels asked about Global Ethics/Compliance Programs in a 2007 Benchmarking Survey What are the primary concerns you have regarding the successful implementation of a global program? 1. Language & Culture 2. Communication & Education 3. Oversight & Administration 4. Program Acceptance & Support or

12 Consequences of a Non-Localized Approach Exposure to substantial risk when the organization assumes that understanding or consensus has been built around the code, when in fact such understanding or consensus is not present Lost opportunities for the larger organization to learn about and benefit from the context and experience of local markets and an engaged global workforce; when a workforce feels disconnected to the organization s values synergies, loyalty, and innovations are not possible Attrition and reduced productivity as a result of employees not feeling connected to or engaged around their own core values and national cultural norms or Local Opportunities for Global Programs Be BOTH ethical/compliant AND cross-culturally competent Develop new understanding around how policies will be seen, implemented and played out in different national cultural contexts by well-meaning and conscientious employees (benefit of doubt) Be more creative, empathetic, and effective in elaborating ethics and compliance messages or solutions that are effective across national cultures Achieve greater insight regarding culture's impact on investigations and program planning in cross-national and cross-cultural scenarios or

13 State of the Practice Among Responding Organizations 90%: 75%: Engage local representatives Translate their code of conduct and provide helpline interpretation Meetings / Teleconferences with local representatives Roughly 50%: Adapt or modify code for non-us locations (beyond translation) Involve local employees in code development Training in employees local language always or most of the time Only 35%: Formal communications or training to domestic and international consultants, vendors, and/or joint-venture partners Involve international employees in the development of training materials. Modify training to incorporate cultural differences, local laws and policies or Ongoing Challenges Fewer Concerns Raised Internationally More Complicated International Disciplinary Process Less Face-to-Face Training No Formal Review of Helpline or

14 Opportunities Within Your Organization Support Your Managers and Leaders: To better determine when and if local cultural differences need to be considered To anticipate and plan for how organization-wide policies will play out in different cultural contexts To uncover new risk areas where, for example, cultural differences and a lack of clarity may currently mask vulnerabilities to the business Support Your Local (worldwide!) Employees: To better understand what your organization expects of them in their day-to-day duties and work life To perform at a higher level and develop their own understanding of how to navigate, meet, and exceed the organization's expectations To reconcile their own cultural values and beliefs with corporate policy, without giving up their own cultural identity or Questions? = Society of Corporate Compliance and Ethics 6500 Barrie Road, Suite 250, Minneapolis, MN 55435, United States or