Date post: | 26-Mar-2015 |
Category: |
Documents |
Upload: | sophia-doyle |
View: | 218 times |
Download: | 0 times |
1
Call To Action - Building Ethics Programs for Tomorrow
The Institute of Internal AuditorsNovember 16, 2004
Call To Action - Building Ethics Programs for Tomorrow
The Institute of Internal AuditorsNovember 16, 2004
Ed Dudley, CIA, CPA
Retired Vice-President & General Auditor-ABB Americas
2
• Introduction & Key Issues For Today Ed Dudley• Taking the Ethics Program to the Next Level
Brian Sears• Monitoring and Assessing Corporate Governance
from the Internal Audit FunctionDonna Passal
• Annual Disclosure and Conflicts of Interest Questionnaire
Chris Yost• Break• Q & A• Summary of Main Points
Ed Dudley
AgendaAgenda
3
Key IssuesKey Issues
• Examine Several new Initiatives in Ethics
• Review Ethics Tools for Leaders
• Discuss Advantages in Producing an Ethics Film Festival
• Examine an Internal Audit Review and Certification of NYSE Rules
4
Key IssuesKey Issues
• Examine How to Plan for That Review and the Board Committees Affected
• Review Corporate Governance Guidelines for Board Directors
• Review Questionnaire Disclosures for Board, Corporate and Regional Leaders
• Examine an Internally Developed Web-Based Questionnaire Application
5
Taking the Ethics Program to the Next Level
Taking the Ethics Program to the Next Level
Brian SearsDirector – Ethics Awareness
Lockheed Martin Corporation
6
Ethics & Business Conduct Program
• Setting the Standard – Code of Ethics & Business Conduct
• Worldwide confidential Helpline• Ethics officers at all major sites• Communication and awareness campaign• Compliance training and education program• All-employee Ethics surveys• Annual Ethics awareness training for all
employees
Program Elements
7
New Initiatives
• The Chairman’s Award• Ethics Tools for Leaders• Organization Ethical Maturity
Assessment• Ethics Film Festival• Ethics Minute
8
The Chairman’s Award
• Recognizes a single LM employee for acts that exemplify our commitment to Ethics and Integrity
• One nominee from each Business Area and from Corporate
• Winner selected by Chairman/CEO and President/COO
9
Ethics Tools for Leaders• Online, self-directed training
course– Creating an ethical environment– Responding to employees– Using the tools
• All managers will complete course in 2003
• Online support toolkit– Ethics resources– Links to policies– News & information– Search, Contact, Help
10
Mission Mission SuccessSuccess
Organization Ethical Maturity ModelOrganization Ethical Maturity Model
Ad HocAd Hoc
• UninformedUninformed• Ethics Not IntegratedEthics Not Integrated
ComplianceCompliance
• EnlightenedEnlightened• Compliance TrainingCompliance Training
Values-Based Values-Based EthicsEthics
• EmbracedEmbraced• Core ValueCore Value
IntegrationIntegration
• VisibleVisible• Role ModelsRole Models
Competitive Competitive AdvantageAdvantage
• TransformationTransformation
11
Self-Assessment Tool
Self-assessment Tool Hosted on the
Ethics Website
Requestor contacts Ethics Office
Reports
Next Level Director or Vice President
completes Self- Assessment
Ethics Officer consults with Requestor
Prepares Action Plan
Employees complete
Self- Assessment
Manager completes
Self- Assessment
12
Ethics Film Festival: Objectives
• Promote ethics in the workplace• Opportunity for employees to present their
views, in a positive forum• Keep ethics message fresh and interesting• Multiple potential uses of videos received
– Training– Ideas for future initiatives– Internal publicity and promotions– Outside publicity
37 Videos Received to Date37 Videos Received to Date
13
The “Ethics Minute”
• A series of one-minute video episodes containing an ethics message on a central theme– Delivered by email link– Three to six episodes constitute one
series– Periodic delivery after initial kickoff
14
The Ethics Minute: Objectives
• To deliver an ethics message that:– Complements annual awareness
training;– Is received throughout the year;– Focuses attention on key issues;– Reaches a large segment of the
employee population;– Uses an engaging and interesting
format
15
Monitoring and Assessing Corporate Governance from the Internal Audit Function
Monitoring and Assessing Corporate Governance from the Internal Audit Function
Donna Passal, Director
Global Corporate Audit Services
Office Depot
16
Internal Audit Review
• In November 2003, the SEC approved the final corporate governance rules of the NYSE. These rules require that each listed company’s CEO certify to the NYSE each year that he or she is not aware of any violation by the company of these standards.
• OD had to be in full compliance by the time the May 2004 shareholders’ meeting was held and had to submit the first certification to the NYSE no later than 30 days after the meeting.
• Global Corporate Audit Services performed a detailed review of OD’s compliance with the rules, and provided the results to the CEO.
17
Planning the Review
• Final NYSE and SEC corporate governance rules
• Current year proxy statement/10K• OD’s conflict of interest policy• Completed director’s questionnaires• Charter, meeting schedule and minutes
for board committees:– Corporate Governance Committee– Compensation Committee– Audit Committee
18
Board Of Directors
• Independence of directors– Basis for determining independence
disclosed– No material relationship with OD– Independent after three years of condition
• Director is officer of a charity
• Executive sessions for non-management
directors
19
Corporate GovernanceCommittee
• Member independence
• Written charter– Director selection– Corporate governance principles– Board evaluation– Committee evaluation– Member qualification, structure,
operations
• Search Firms
20
Compensation Committee
• Member independence
• Written charter– CEO compensation and evaluation– Non-CEO compensation plans– Report for proxy statement– Committee evaluation– Member qualification, structure, operations
• Compensation consultants
21
Audit Committee• Member number, qualifications and independence• Written charter• Oversight functions
– Annual and quarterly financial statements, MD&A, press release, analyst guidance
– Risk assessment and risk management– Meetings with management, external auditors and internal auditors– Internal accounting controls, accounting and audit matters
• Responsibility for external auditor– Quality control– Hiring, firing and compensation– Audit and non-audit services– Partner rotation and auditor independence
22
Corporate Governance Guidelines
• Director qualification standards
• Director responsibilities
• Director compensation
• Director orientation and continuing education
• Management succession
• Annual performance evaluation of board
23
Office Depot’s Corporate Governance Website
WWW.OFFICEDEPOT.COM
Select company information, then investor relations, and finally corporate governance
• Company values• Board independence• Board training• Committee charters• Governance
documents
24
Code of Business Conductand Ethics
• Directors, officers and employees covered
• Waivers approved and disclosed
• Compliance standards and procedures
• Available on website
• Addressed in annual report and 10K
• Key areas
25
Annual Certification
• CEO certification
• Annual report
• Non-compliance
26
Annual Disclosure and Conflict of Interest
Questionnaires
Annual Disclosure and Conflict of Interest
Questionnaires
Chris Yost, CIA, CPA
Director of Internal Audit, Whole Foods Market
27
About Whole Foods
• Founded in 1980 in Austin, Texas • Largest natural and organic foods
retailer • Sales of $3.1 billion in fiscal year 2003 • 160 stores in the United States, Canada
and the United Kingdom • 10 operating regions • High level of autonomy in decision-
making processes
28
Code of Conduct & Ethics
• Approved by the Board in November 2002
• Requires completion of annual questionnaires by – Board members – Executives – Other leadership including store and
regional personnel
29
Types of Questionnaires
• Disclosure – Board – Corporate leadership– Regional leadership
• Conflict of Interest – Corporate leadership– Regional leadership– Store leadership
30
Electronic, internally developed web-based application
• Easy to complete• Easy to follow up on non-responses• Easy for Ethics Committee to review
responses• Users can review prior year responses
and update• Facilitates data retention
31
Form A
32
Form C
33
Questionnaires
• Questionnaires complement other elements of the Whole Foods ethics program:- Whistleblower tip line- Awareness materials- Communications with vendors regarding the Company’s gift acceptance policy.
34
Questions?
35
Q & AQ & A
36
Summary of Main PointsSummary of Main Points• An Online Self-Directed Training Course can
help Create an Ethical Environment• Online Support Tool Kits can aid Ethics
Resources, Links to Policies and Provide Contact Help
• An Ethics Film Festival Promotes Ethics in the Workplace and is an Opportunity for Employees to Become Involved with the Message
37
Summary of Main PointsSummary of Main Points• An Ethics Minute Program can Focus
Attention on Key Issues Throughout the Year• Internal Audit Reviews of Compliance with
Internal and External Rules can Provide Valuable Assurance to your CEO
• A Corporate Governance Board Committee Should Have a Written Charter Providing for Member Qualifications, Structure and Operations
38
Summary of Main PointsSummary of Main Points• Compliance Reviews can Cover your Corporate
Governance, Compensation and Audit Committees• Code of Conduct Questionnaires Should Cover
Board Members, Company Executives, Store (Unit), Regional Leadership and Other Employees
• Web-Based Questionnaires are Easy to Review and Compare to Prior Years and Follow Up on Non-Responses
39
Summary of Main PointsSummary of Main Points• Code of Conduct/Ethics Questionnaires
can Compliment Other Elements of your Compliance Program, Including Materials Awareness, Gift Policy and Others
40
Get Your CPE Certificate:Get Your CPE Certificate:
If you are a primary Webcast participant:• If you view the live Webcast, you should be receiving your CPE certificate via email today.• You can also view the certificate in your account. Just log in and hit the “CPE” button.• If you are viewing the archived Webcast, you will have to take the corresponding quiz which you will find in your webcast account.
If you are not the primary participant but will be viewing the Webcast:
• Additional viewers may obtain CPE for a $15 administrative fee per additional viewer per Webcast.
• Register online at http://www.auditlearning.org.
41
Webcasts - 2005““Benchmarking Internal Audit:Benchmarking Internal Audit:
Where do you measure up?Where do you measure up?””
42
Webcast EvaluationVisit the Login Page
Webcast EvaluationVisit the Login Page