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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
Page 8 July 2011 · Bertelsmann AG · Company presentation
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
• Company & Program Overviews• Developing a Code• Code Rollout and Training• What’s Next?• Best Practices
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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
“
” iii
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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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Page 29 July 2011 · Bertelsmann AG · Company presentation
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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
Page 30 July 2011 · Bertelsmann AG · Company presentation
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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Page 31 July 2011 · Bertelsmann AG · Company presentation
Code of Conduct: Table of Contents
Page 32 July 2011 · Bertelsmann AG · Company presentation
Traditional channels Non-traditional channels
Ombudsperson Online systemCorporate CenterLocal HR, Legal, etc.
The Whistleblowing Channels
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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
Page 34 July 2011 · Bertelsmann AG · Company presentation
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
• Company & Program Overviews• Developing a Code• Code Rollout and Training• What’s Next?• Best Practices
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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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Page 53 July 2011 · Bertelsmann AG · Company presentation
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?
Page 54 July 2011 · Bertelsmann AG · Company presentation
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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Page 55 July 2011 · Bertelsmann AG · Company presentation
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
Page 56 July 2011 · Bertelsmann AG · Company presentation
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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Page 57 July 2011 · Bertelsmann AG · Company presentation
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
Page 58 July 2011 · Bertelsmann AG · Company presentation
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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Page 59 July 2011 · Bertelsmann AG · Company presentation
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
Page 60 July 2011 · Bertelsmann AG · Company presentation
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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Page 61 July 2011 · Bertelsmann AG · Company presentation
“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
Page 62 July 2011 · Bertelsmann AG · Company presentation
• 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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Page 63 July 2011 · Bertelsmann AG · Company presentation
• 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
Page 64 July 2011 · Bertelsmann AG · Company presentation
• 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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Page 65 July 2011 · Bertelsmann AG · Company presentation
• 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
Page 66 July 2011 · Bertelsmann AG · Company presentation
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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Page 67 July 2011 · Bertelsmann AG · Company presentation
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
• Company & Program Overviews• Developing a Code• Code Rollout and Training• What’s Next?• Best Practices
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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
Page 72 July 2011 · Bertelsmann AG · Company presentation
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
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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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Page 75 July 2011 · Bertelsmann AG · Company presentation
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
Page 76 July 2011 · Bertelsmann AG · Company presentation
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
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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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Page 77 July 2011 · Bertelsmann AG · Company presentation
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
• Company & Program Overviews• Developing a Code• Code Rollout and Training• What’s Next?• Best Practices
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Questions