Company & Program Overviews - SCCE Official Site · SCCE 2011 Compliance & Ethics Institute 2 Agenda • Company & Program Overviews ... organizational transformation, and leadership

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Evolving Ethics & Compliance Programs: Tying Together Values, Culture, Your Code, and Training

Saira Jesrai & Bill Brossman, Marsh & McLennan Cos.Katie Wilson, QualcommMara Davis, Bertelsmann

SCCE 2011 Compliance & Ethics Institute

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Agenda

• Company & Program Overviews• Developing a Code• Code Rollout and Training• What’s Next?• Best Practices

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Our Industry and Footprint Our Culture and EnvironmentsOur Industry and Footprint Our Culture and Environments

Risk and Insurance Services Marsh: World leader in delivering risk and

insurance services and solutions to clients provides global risk management, risk consulting and insurance broking

Guy Carpenter: World's leading risk and reinsurance specialist, creating and executing reinsurance and risk management solutions for clients worldwide

Consulting Mercer is a leading global provider of

employee benefit consulting, outsourcing and investment services

Oliver Wyman is a top-tier global management consulting firm that combines deep industry knowledge with specialized expertise in strategy, operations, risk management, organizational transformation, and leadership development

A leading global professional services firm Multi-cultural, diverse workforce Over 53,000 employees worldwide with

annual revenue exceeding $12 billion Operates in more than 100 countries Highly de-centralized structure with four

discrete operating companies 221st on the Fortune 500 list 5th largest US company in the diversified

financial industry Highly regulated businesses (outsourcing,

investments and insurance broking) Does business in emerging markets and in

challenging environments

Global professional services firm providing advice and solutions in the areas of risk, strategy and human capital

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Our Compliance and Ethics Framework

Risk Assessment

– Existing Processes

– New Products/Services

– Emerging Risks

Marsh & McLennan Companies Code of Conduct, The Greater Good

Policies and Procedures

Systems/Controls

Training

Compliance Resources

Compliance & Risk Committees

Investigations

Remedial Actions

– Systems

– Discipline

Disclosure

Response

Hotline

Audits

Compliance Reviews

Monitoring

Metrics/Scorecards

Measuring Effectiveness

Senior Management Commitment

Communications Compensation

Incentives Leadership

Culture

Prevention

Detection

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The world leader in next-gen mobile technologies

S&P 100 / S&P 500 / Fortune 500

Celebrating 25 years of driving the evolution of wireless communications

World’s largest fabless semiconductor company, #1 in wireless

Making wireless more personal, affordable & accessible to people everywhere

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Qualcomm Inc.

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Page 7 July 2011 · Bertelsmann AG · Company presentation

First Class Media Content & Services

Europe’s leading entertainment group

World‘s largest trade book publisher

Europe’s leading magazine publisher

Leading international provider of outsourcing services

Future initiatives and centrally managed businesses

BERTELSMANN

CORPORATE


Corporate Culture

Shared aims and basic values: • Partnership• Entrepreneurship • Creativity• Social responsibility

A long standing commitment to corporate citizenship

“In the view of our shareholders, the possession of property creates an obligation to the community. They are committed to the idea that in a market economy a corporation derives its legitimacy by making a valuable contribution to society…”Bertelsmann Essentials

Corporate Culture

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Agenda


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Marsh & McLennan CompaniesCross- Cultural Considerations

Challenges We Faced How we Approached the ChallengesChallenges We Faced How we Approached the Challenges

Findings from Focus groups:– “Old” code was US-centric,

legalistic and not so user friendly, only available online

Employees skeptical about the usefulness of any Code for themselves “Old” code did not present a holistic

view of the different operating companies; did not reflect the strong brand and cultural differences of the four operating companies across the globe

Focus groups conducted in London, Singapore and many other cities to test the global tone Hard copy and

online version of the Code available in 23 languages Strong project governance

– Steering Committee– Working Group– Subject Matter Experts– Project Sponsor

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The Greater GoodOur New Code of Conduct

• Organized around the idea of trust

• A clear statement of who we are and our shared commitment to integrity

• Addresses key cultural drivers of risk:

– Treat clients fairly

– Fairly address conflicts of interest

– Be committed to quality

– Disclose mistakes

– Raise concerns

– Supervise colleagues and their work

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Developing The Greater GoodFrom the Ground Up

Engaged the right resources

Collected the right data

Drafted and designed the right Code for

Marsh & McLennan Companies

• 200+ individuals drawn from all Operating Companies, geographies, key functions

• Governance: Steering Committee and Code Working Group

• Ethical Leadership Group, a global leader in shaping relevant codes of conduct, to partner in research and benchmarking

• Benchmarked current code against best practices

• Conducted colleague focus groups in London, NYC and Singapore

• Solicited input from Code Working Group, Compliance Officers, Subject Matter Experts, Executive Officers and Key Functions

• Validated through colleague focus groups in Australia, India, Brazil, Mexico, France, Germany, Canada, and US (Chicago and Hoboken)

• Reviewed by global legal and compliance teams

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The Right Tone at the TopOur CEO’S Message Was Critical

Why “The Greater Good”?

Seek advice; you’re not alone

The non-negotiable standardsthat apply to all of us

Raise concerns

Many resources available to help you

Our key relationships all depend on trust

“

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How the Code is OrganizedThe Table of Contents

Building trust by doing the right thing

Building trust with colleagues

Building trust with clients

Building trust with communities

Building trust in the Company

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Easy-to-Navigate Format

MAKE SURE YOU

WATCH OUT FOR

TO LEARN MORE

Q&A

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Basic Colleague Responsibilities

MAKE SURE YOU

• Obey all laws and regulations that apply to your work.

• Understand and adhere to the letter and spirit of this Code and Company policy.

• Take all required training to understand your responsibilities.

• Act honestly in all your business dealings.

• Speak up if you have a concern about any work-related behavior that may be a violation of the law, this Code or Company policy. Raise concerns with your managers at any level, or with Compliance, Legal, Human Resources, or through the Ethics & Compliance Line.

• Cooperate in internal and external audits and investigations by fully and truthfully providing information and by preserving all materials that might be relevant.

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Decision-Making ModelFive Key Questions

If the answer to any of these questions is no, stop and speak

up

AS YOU MAKE A BUSINESS DECISION, ASK YOURSELF

1. Is it legal?

2. Is it consistent with this Code and Company policy?

3. Is it based on a thorough understanding of the risks involved?

4. Will it maintain trust with clients, shareholders, regulators and colleagues?

5. Would it maintain our good reputation if it appeared on television, the newspaper or the internet?

AS YOU MAKE A BUSINESS DECISION, ASK YOURSELF

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Raising Concerns

SPEAKING UP

Emphasizes importance of speaking up

Outlines channels available to raise concerns

NO RETALIATION

The Company will not tolerate retaliation against any colleague who raises a concern about a violation of the law, this Code or Company policy in good faith.

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Leadership Responsibilities

• Lead by example

• Hold yourself to the highest ethical standards of conduct

• Communicate those standards to those being supervised

• Take an active role in ensuring quality, understanding risks and giving guidance

• Create atmosphere of open and honest communication

• Take prompt remedial action for mistakes or misconduct

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Building a Code on Our Culture

Current state – future state

Best practices review

Needs assessment

Culture most critical aspect

Values = Engagement

Employee population considerations

Required is not a friendly concept

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Focus Groups

Cross functional team with Learning Center

30 focus groups representing demographics of company

Results yielded Words describing culture and values Overwhelmingly positive Differences between demographics Some gaps

Needed to: Validate findings with executives Turn feedback into usable vocabulary

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Building a Brand & Vocabulary for our Culture

Developed new partnerships with Corporate Marketing team

Utilized branding experts

Used “How” as background/education for values based approach

Goal – supporting culture of ethics and integrity

Cross functional working sessions

“The Qualcomm Way” brand developed

Executive interviews

Output useable to internal and external audiences

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The Values Platform Reflects Our Culture

In the way Qualcomm learns, behaves, relates, recognizes & pursues goals, Qualcomm will demonstrate:

Partnership,

Innovation,

and the ability to Execute.

Together, these qualities will engender and support a culture of self-governance at Qualcomm.

Qualcomm Values Here’s how

Reinforces transparency.

Fosters trust.

Empowers individuals.

Promotes unified action around shared beliefs.

Reinforces ethical behavior.

Nurtures collaboration.

Fosters greater satisfaction & sense of meaning around fulfilling our mission.

Inspires a sense of legacy.

Strengthens the ability to lead & transcend markets.

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GRITYPARTNERSHIPOPENNESSEXECUTIONDIVERSITYPARTNERSHIPSEXECUTIONDIVERSITYFOCUSRESPECTKNOWLEDGEACCOUNTAB

NTEGRITYPARTNERSHIPOPENNESSEXECUTIONDIVERSITYRESPONSIVENESSPARTNERSHIPOPENNESSEXECUTIONDIVERSITYFOCUSRESPECTKNOWLEDGEPARTNERSHIPO

Qualcomm Values

Innovate Execute Partner

•Originality•Curiosity•Knowledge•Diversity

•Responsibility•Accountability•Initiative•Focus•Flexibility

•Integrity•Openness•Responsiveness•Respect•Collaboration

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Considerations in Writing the Code

Order of content

Introduction

Reflective of values

Intuitive

Easy to read

Useful – Q&A

Links

Focused on people

Lead with trust

Engaging design

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GRITYPARTNERSHIPOPENNESSEXECUTIONDIVERSITYPARTNERSHIPSEXECUTIONDIVERSITYFOCUSRESPECTKNOWLEDGEACCOUNTAB

NTEGRITYPARTNERSHIPOPENNESSEXECUTIONDIVERSITYRESPONSIVENESSPARTNERSHIPOPENNESSEXECUTIONDIVERSITYFOCUSRESPECTKNOWLEDGEPARTNERSHIPO

Our Code of Business Conduct

• Maintaining a Strong Ethical Culture

• Our Responsibilities to Our Company

• Our Responsibilities to Each Other

• Our Responsibilities to Our Customers and Business Partners

• Our Responsibilities to Our Shareholders

• Our Responsibilities to Our Communities

• Business Conduct Hotline access numbers

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It’s Written…Now What?

Cross functional buy-in and ownership

Executive feedback

Board presentation & feedback

New acknowledgement module

“Flip Book” website

Printed copies - global

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New Code Summary

July 2009 – March 2011 Multiple step process with many

partners

Challenges: Buy in across multiple groups –

delays New acknowledgement –

cultural change Pilot group Technology issues Acquisition mid rollout

Successes Very positive feedback Thoughtful questions Increased awareness Externally facing Cross functional ownership

Engagement

Values

Culture

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BeNet-Special:• Chairman’s Letter• Download of Code of Conduct• Tone from the Top Interview emphasizing

importance of the Code

1The Code of Conduct is actively communicated via the corporate employee media.

2Executives received information about the Code of Conduct rollout at the 2007 Management Meeting.

3Official launch of the Code of Conduct: Chairman’s Letter (Friday, October 24).

5Corporate communication is complemented by communication by local management.

Communication on subsidiary level

1st Global Code of Conduct Launched on October 24, 2008


Cover Poster

Supplemental printed materialsCode of Conduct

FlyerTable of Contents

The Bertelsmann Code of Conduct is a binding guideline for all employees worldwide, mandating legally compliant and responsible behavior within the company.

www.ethics.bertelsmann.com

The Bertelsmann Code of Conduct

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Code of Conduct: Table of Contents


Traditional channels Non-traditional channels

Ombudsperson Online systemCorporate CenterLocal HR, Legal, etc.

The Whistleblowing Channels

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Page 33 July 2011 · Bertelsmann AG · Company presentation 33

Employees are encouraged to seek resolution of their concerns locally first. Ombudspersons and internet-based system are positioned as supplemental channels.

The Primacy of Local Channels


Code of Conduct: Language Versions

1. Chinese2. Dutch3. English4. French5. German6. Italian7. Polish8. Portuguese9. Russian10. Spanish11. Turkish (online only)12. Czech (online only)

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Agenda


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Code of Conduct Rollout and Training

Rollout Goals Communications StrategyRollout Goals Communications Strategy

• 100% of all colleagues to receive the Code in hard copy

• 100% of all colleagues to see the film, Faces of Marsh & McLennan Companies

• 80% of all colleagues to attend manager-led training

• 100% to certify to The Greater Good

• All colleague email announcing distribution of hard copy of Code and ‘what to expect’ in the weeks ahead; all colleague message introducing the new code

• Posters promoting new Code sent to all offices globally

• Hard copies of Code printed in 23 languages and sent to all colleagues globally; Code posted externally on public site; Online Code available in 23 languages

• Creation of documentary film as a way to support the Code rollout and training effort

• Toolkit for Leaders; Manager training; Manager-led employee training sessions

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Communications: Faces of Marsh & McLennanAward-Winning Documentary Film

• Risk as a strategic imperative• The importance of the work we do• Individual responsibility for doing it

right• Importance of raising concerns• Code of Conduct

Emphasis:

Weaving the company together . . . reducing our risk

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Leader’s Toolkit

Leader’s Toolkit contains:• Full Faces of Marsh &

McLennan Companies film• 9 Film Clips

• Leader’s User Guide• PowerPoint Presentation

• Access to the Code in various languages

• Video Player Help Guide

Leader’s Toolkit Interface

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Topical Clips

• Building trust

• Speaking up

• Challenges for leaders

• Risk mindfulness

• Balancing risk and opportunity

• Quality: preventing and addressing errors

• Quality: proposals and contracts

• Preventing bribery and corruption

• The Greater Good

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“SPEAKING UP”EXCERPTS FROM THE FILM

“The Code of Conduct isn't just a set of rules. I think it's a process. It should give you a guide. A guide in the sense of who do I talk to? How do…I feel all alone here. You're not all alone. You have a whole company here that wants to help in this process. You are part of the company. What you do makes a fundamental impact on all of us. Use the resources available, and don't feel so alone.”

~ Brian Duperreault, CEO

For discussion:

If I have a concern about unethical or unlawful conduct, what should I do?

Expected behavior:

- Do not hesitate to raise concerns or seek guidance. Your fast action helps all of us retain and build trust.

- By raising concerns, you enable us to solve a problem together. I assure you that I will not tolerate any form of retaliation against anyone who raises a concern in good faith.

- Communicate to those you supervise that your door is always open for them to report a mistake or conflict of interest, raise a concern or discuss a difficult business choice.

- Managers, like all Company colleagues, must speak up if they have a concern about any work-related behavior that may be a violation of the law, the Code or Company policy.

- As an alternative to raising concerns with or seeking guidance from a manager, Legal, Compliance or Human Resources, you may use the Ethics & Compliance Line.

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Colleague Reactions

Lively audience participation in Mercer's Global Operations and Shared Services Center in Gurgaon, India

“I have seen the film quite a few times…and it is very well received every time. It conveys some great information about the meaningful work [we] do, about the breadth of our operations across the regions as well as proving great context for the Code and content of the Code. You successfully struck a very balanced global tone.”

“It was effective because it went beyond ‘knowledge and understanding’ to something that connected with people emotionally, which . . . drives engagement and . . . leaves a lasting impression.”

Andrew Beagley presenting to Mercer's Global Operations and Shared Services Center in Gurgaon, India

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The Greater Good: Online Version http://www.compliance.mmc.com/TheGreaterGood

Our Mission, Vision, Our Values,Our Values >

Q&As >

Questions and answers about situations you may encounter

Our Policies >

Marsh & McLennan Companies Policies that help to inform our code of conduct

Additional Information

DOWNLOAD THE CODE

OUR POLICIES

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Every colleague will be asked to certify he or she has:

– Read the Code

– Understands it

– Agrees to comply with it

Certification underscores the importance we attach to the Code

Colleagues will receive an electronic link to the certification

Answer six multiple choice questions on key principles and where in the Code to find the relevant material

Employee certification data will be saved in database

Certification Overview

Our Code of Conduct, The Greater Good, is the foundation for the way we conduct ourselves and certifying to the Code of Conduct is important. It is the way each of us acknowledges that we have read our Code of Conduct, we understand it, and we agree to comply with its provisions.

Please join me in certifying to the Code by following the three easy steps described on the next few slides. Please know that every employee at our Company will be following the same Certification process.

Thank you for your commitment to our Code of Conduct, The Greater Good, and to our Company.

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When making business decisions, we should remember that we have responsibilities beyond our own interests.

We have individual responsibilities to help advance the broader interests of our colleagues, our clients, our shareholders and our communities.

At Marsh & McLennan Companies, we hold ourselves to the highest ethical standards.

All of the above.

Message from the CEO

We are honest and professional

We treat others as we would want to be treated

We give back to our communities

You have now completed the Question and Answer section of your Code of Conduct Certification process. Your final step is to certify that you have read the Code, you understand it, and you agree to comply with its provisions.

Please check the appropriate box and then click below to submit and complete your Certification.

Every colleague is required to certify.

By clicking this box, I certify that I have read our Code of Conduct, The Greater Good, I understand it, and I agree to comply with its provisions.

I am unable to certify.

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Code Acknowledgement

Internally developed

Flash based version of printed code

Acknowledgement text with check box

Globally deployed Regular employees Temporary employees Interns

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Global Training

Content tied to Code Case studies What would you do situations Collateral materials Values focused Customized to risk areas of regions

Prioritized regions

Postponed due to acquisition

APAC first – 2 weeks Tied to orientation FCPA training Customized to audience

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Employee Responsibilities

Be Familiar with the Rules

Use Good Judgment

Be Accountable for Your Actions

Ask Questions

• Management• HR• Legal• Business Conduct Hotline

Report Concerns

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Training – What’s Next

Feedback Survey tied to Climate ER/HR session Adjust accordingly

IHR Input - Customize Europe India Canada Latin America

Train the trainer

Desired outcomes Increased awareness Increased reporting Increased hotline use Regional partnerships Ongoing conversation

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Global Thinking

Cultural norms?

Tailoring training, communication

Leadership buy-in

Building key partnerships

Developing resources that apply to all employees Start general Allow countries to describe specifics where applicable

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Communication & Training (C&T): Essential Parts of an E&C Program

IDW EPS 980 USSG OECD Guidance

[The organization] informs employees and, where necessary, third parties, about the compliance program and its fixed roles and responsibilities, so that they are able to best understand and fulfill their duties in the compliance management system (CMS).

The organization shall take reasonable steps to communicate periodically and in a practical manner its standards and procedures, and other aspects of the compliance and ethics program, to the individuals referred to in subparagraph (B) by conducting effective training programs …

Companies should consider (…) measures designed to ensure periodic communication, and documented training for all levels of the company, on the company’s ethics and compliance programme or measures regarding foreign bribery, as well as, where appropriate, for subsidiaries;

UK Bribery ActICT Supplier Questionnaire

The commercial organisation seeks to ensure that its bribery prevention policies and procedures are embedded and understood throughout the organisation through internal and external communication, including training, that is proportionate to the risks it faces.

What communication methods are used to inform workers about your policies and procedures?Does your facility provide training programmes for ethical practices? Does your facility have a process for measuring the effectiveness of its training for Ethical practices?


Bertelsmann Executive Board

AR Audit & Finance Committee

Corporate Compliance Committee

“Speakers Committee”

Bertelsmann Management Representative Committee

Company works council

E&C Representatives in companies

E&C Representatives in divisions

HR Committee

CR Committee

HR Country Coordination

Employee representatives

Functional committees Compliance organization

Employees

E&C departmentCEO Country Coordination

Risk Officers

External

Business partners (RFP)

Financial auditors

CR-Rating Agencies (Oekom)

Global Compact

Defining Target Groups and Stakeholders for E&C Communication

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The most important element for the early identification and remedy of grievances is a corporate climate where everyone at the company is encouraged to speak openly and participate in the continuing optimization of business processes.

Performance and

Development Dialogue

Employee discussion in

the workplace

Suggestion Scheme

Escalation procedures

MVARAutumn Talk

January TalkEmployee

SurveyQuarterly

TalksCode of Conduct

Guidelines for Management

Bertelsmann Essentials

Ways to participateValues

Preventing Risks: Partnership and Corporate Culture


A variety of training and communications offerings ensures that all Bertelsmann employees worldwide are familiar with the Code of Conduct.

Interactive Training Web Portal Employee Media

www.ethics.bertelsmann.com www.benet.bertelsmann.comBy invitation

Communications & Training Offerings

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1. Content focused on: Key risk areas

Tools for raising concerns

Scenarios representing diverse occupations

CONSTRAINTSCONSTRAINTS

2. Training format: Interactive

Multi-format & multi-media

Switching between active & passive

Drill-down functionalities

Effective Training-RequirementsEffective Training-Requirements

Adult Learning Theory:

• Self-directed

• Respectful and acknowledging

• Experience based

• Relevant / Learner-focused

• Interactive / Participatory

• Etc.

Compliance:

• Mandatory

• Content is largely predetermined by requirements (e.g., USSG, compliance risks)

• Bright line rules, non-negotiable

• Etc.

Training Philosophy & Goals


Key Principles & Objectives of Our Code Training Approach

1. The Code is introduced in a way that reflects our corporate culture, emphasizing:• The importance of trust and respect• A culture of open dialogue• Decentralization (parties should attempt to resolve issues locally where possible)

2. The goal of training is to empower employees:• Familiarize employees with key risk areas (four chapters & 20 principles)• Familiarize employees with the tools to raise concerns (local work environment, Bertelsmann

(RTL Group) Corporate Center, www.reportconcerns.com, and ombudsperson).

3. Training should be an interactive, engaging experience:• Includes interactive features (scenarios, multiple choice questions, videos).

4. Training should account for diverse employee populations and IT infrastructures:• Can be administered in different formats (online/offline; individual/group).

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Training development:

- Customized course

- In-house development: curriculum, photography & videos

- Outsourced: HTML implementation, translation, web-design, LMS

Online:

- 60% of staff

- Used predominantly in office

environments

- Most expedient for

participation

- Efficient administration

- Positive user feedback

In person:

- 40% of staff

- Used predominantly in

manufacturing environments

- Administration & tracking

participation more involved

Code Training Development & Implementation


Training Content Overview

Chapter Key Messages

1. Why we have a Code of Conduct

• An overview of the reasons why Bertelsmann has adopted a global Code of Conduct.

2. Bertelsmann Code of Conduct

• An overview of the 20 Code principles.

• Two of the 20 principles are explored in detail (“Compliance with the law” and “Mutual trust & respect”).

• The learner engages in three problem situations on Code principles.

3. Decision-Making Guide • References the Code’s Decision-Making Guide and underscores that people are fully capable of making good decisions if they use common sense and act with a sense of responsibility.

4. Promoting Open Dialogue in the Workplace

• One of the most effective safeguards against bad business decisions is a workplace that promotes employee participation in decision-making and allows employees to openly raise concerns.

5. Raising Concerns Locally and Escalating Concerns

• An overview of the whistle-blowing mechanisms for raising concerns.

• Employees should resolve their concerns locally, and be encouraged to do so by local managers.

• When to escalate concerns to the Bertelsmann (RTL Group) Corporate Center, Internet-based whistle-blower system or ombudspersons.

• The learner engages in three exercises on how to raise concerns.

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“Hello and welcome to this introduction to the Bertelsmann Code of Conduct…”

Greeting

“More and more often, I meet job applicants who ask about our rules of conduct. The Code makes it much easier for me to answer these questions.”

Why We Have a Code of Conduct

“I’m not convinced that adhering to rules limits our company’s efficiency or performance. On the contrary, it makes us stronger.”

Compliance with the Law

Examples:

Testimonials from Colleagues Introduce Each Chapter


• A short film clip shows a fictitious employee confronted with a decision for which the Code should be used for guidance.

• After viewing the clip, colleagues are asked to select the relevant Code principle.

• This exercise prompts colleagues to interact with the 20 Code principles.

• After learning about the 20 Code principles, colleagues view three scenarios.

Shop floor

Inappropriate behavior

Office

Inappropriate behavior

Senior management

Criminalbehavior

Scenarios 1: The Code Principles

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• After learning about the whistleblowing channels for raising concerns, colleagues are asked three hypothetical questions.

• A photograph depicts unethical conduct witnessed by a fictitious employee.

• The conduct is described and colleagues are asked to select the most appropriate whistleblowing channel to raise the concern.

• This exercise prompts colleagues to engage with the whistleblowing channels for raising and escalating concerns for Code violations.

Disrespectful treatment

Address locally

Unresponsive manager

Escalate via traditional channel

Criminal conduct

Escalate using any channel

Scenarios 2: The Whistleblowing Channels


• Scenarios were selected based on qualitative and quantitative feedback from 80 Ethics & Compliance Representatives (ECR’s) across the Bertelsmann organization.

Scenario Selection

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• Prior to completion, employees are requested to confirm receipt of the Code of Conduct.

• Online users can download a copy of the Code.

• Offline users can request a copy from local human resources.

• Confirmation is required for course completion.

Your Copy of the Code


Awareness of Code/WBS per employee survey

Participation in Code training

Measuring Effectiveness of C&T Initiatives Illustrative Depiction (not actual data)

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2009 20102008

Measuring the effectiveness of C&T initiatives Illustrative Depiction (not actual data)

Code Distribution

Employee Survey

Training Phase 2

Training Phase 1

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Agenda


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Marsh & McLennan CompaniesWhat’s Next

Challenges Areas of Future FocusChallenges Areas of Future Focus

Increasing regulatory pressures, e.g., Dodd-Frank Whistleblower provisions Pressure to grow commercially in

emerging markets where there are substantially different cultural and business norms Behavioral biases create

organizational ‘blind spots’ in colleagues and leaders

‘Stay the course’ in terms of the company’s commitment to encouraging colleagues to ‘speak up’ when they observe unethical conduct Conduct ongoing research through

focus groups and surveys to identify and address ‘weak spots’ in the organization where training or other interventions are needed Music download to fund charitable

donations

What’s Next

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Where Do We Go From Here?

Complete policy restructuring

Employee resources

Ease of use

Just about doing the right thing…getting employees engaged

Training without training

Yearly compliance/risk meeting Audit plan Investigation history Regulatory changes Employee population changes

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Continuing to Lead with Values

Updated hotlines to increase ease of use

Continue cross functional partnerships

Infuse vocabulary in everything internally and externally

Working to turn vocabulary into behaviors

GOAL – always lead with values and ensure we are proactively sending out the right cues to our employees to support a culture of ethics and integrity


Tensions Between Adult Learning Theory and E&C Training Requirements

Pedagogy (Child) Andragogy (Adult) E&C training

1. Autonomous and self-determined

• Students depend on the teacher.• Extrinsic incentives are thought to

be effective.• Teacher determines fixed goals.

• Learners are autonomous and self-determined.

• Intrinsic motivation to learn.• Learners set the goals and can

adjust them.

• E&C training is mandatory.• Subject matter is generally pre-

determined by regulatory requirements.

2. Life experience

• The experience of the teacher cancontribute to the learning process. The experience of the students is less able to contribute.

• Learners already have a breadth of experience and knowledge.

• Most learners already have experience with proper behavior, though less experience with compliance violations.

3. Purpose orientation

• Teacher sets the lesson plan. Students are unable to assess what they should learn.

• Learners have to understand the purpose of their studies. The subject matter must be tailored to concrete needs.

• Some E&C training materials are less relevant for the daily life of the learner.

Cf. Malcolm Knowles, Modern Practice of Adult Education: Andragogy Versus Pedagogy, 1970.

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Psychomotor: Manual or Physical Skills (Skills)

• What do compliance guidelines and procedures mean for my day-to-day business?

• How can I identify illicit behavior if I'm uncertain about it?

• What can I do if I witness or suspect compliance violations?

Cognitive: Mental Skills (Knowledge)

• Does compliance have meaning, and if so, why?

• What kind of behavior is expected of management in regard to compliance?

• Which risks are relevant? Which standards deserve consideration?

• What kind of disciplinary actions are to be expected for compliance violations?

• What resources exist to react to compliance violations?

Possible further questions:• How should I behave if I feel pressured to

commit a compliance violation (e.g., a facilitation payment)?

¹) Based on regulatory requirements, cf. Canadian Bulletin on Corporate Compliance Programs²) Cf. B. S. Bloom, Taxonomy of Educational Objectives, Handbook I: The Cognitive Domain. (New York: D. McKay Co Inc., 1956).

Compliance Training Goals¹ as Classified Within Bloom's Taxonomy²


Interpersonal: Social Capacity

• {…}

Affective: Growth in Feelings or Emotional Areas (Attitude)

• Employee support of the compliance program should be encouraged.

Possible further questions:• Do I identify with the values of the company? • What could be improved in my opinion?

¹) Based on regulatory requirements, cf. Canadian Bulletin on Corporate Compliance Programs²) Cf. B. S. Bloom, Taxonomy of Educational Objectives, Handbook I: The Cognitive Domain. (New York: D. McKay Co Inc., 1956).

Possible further questions:• What can I do when others fall victim to

compliance violations?• How can I help shape the values within my

company?

Cognitive: mental skills (Knowledge)Affective: growth in feelings or emotional areas (Attitude)Psychomotor: manual or physical skills (Skills)

Compliance Training Goals¹ as Classified Within Bloom's Taxonomy²

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Could More or Better Compliance Training Have Prevented Their Misconduct?

Many of the most serious examples of compliance violations are not founded on lack of cognitive (knowing the rules…) or psychomotor skills (… and how to apply them), but rather on deliberate intention and a willful disregard for the law.

Can C&T initiatives strengthen competencies in the ethical realm, thereby transforming potential delinquents into law-abiding citizens?

Jeffrey SkillingEnron

Bernard EbbersWorldCom

Bernard Madoff Raj Rajaratnam Galeon


Theory X: A person…• is reluctant to work• only contributes to goals of the

organization when actively required to do so

• avoids responsibility• needs detailed instruction and oversight

Theory Y: A person...• wants to work• has valuable skills• is intrinsically motivated by self-

determination, responsibility and self-fulfillment

• identifies with the organization and contributes to its goals

76

Cf.: Douglas McGregor, The Human Side of Enterprise (New York: McGraw-Hill, 1960).

Potential delinquents Ethical role modelsThe ambivalent majority

The type of corporate leadership and its underlying idea of persons can determine whether people act prosocially or reprehensibly.

Idea of Persons Company Management Behavioral Tendencies

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Communication has to be justified for the participant.

Necessity?

I've been doing the books here properly for 20 years, and now I'm supposed to be trained in legally compliant accounting?!

Presumptuousness?

Now they want to make me a better person? Who do they think they are?

Integrity/coherence?

Today they're telling us about ethics, and tomorrow they'll be throwing us on the street!

The guys on top just want to protect themselves. They aren't even ethical. When push comes to shove, profit is what counts.

Clash of values?

Now the company wants me to turn in on my own colleagues? We've seen this before in __!

Is the company going to be watching our every move now?

Communication on the same level. The "broadcaster" has to be on par with the "recipient." The broadcaster has the role of facilitator.

In order to be effective, C&T has to be embedded in a consistent context. The prerequisite for credibility is a minimum of integrity within the company.

Avoid overzealousness, maintain a measured perspective. Sharpen awareness: sometimes ethical questions are more than a matter of right or wrong and instead requires balanced tradeoffs between goods.

What reservations toward communication might arise? How can they be accounted for?

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Agenda


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Questions

Documents

Company & Program Overviews - SCCE Official Site · SCCE 2011 Compliance & Ethics Institute 2 Agenda • Company & Program Overviews ... organizational transformation, and leadership