November 14, 2013 Greater Houston Business Ethics Roundtable

Empowering Leaders

to Build a Culture of Compliance

Andrew Baird

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“One thing at GE remains as true today as a hundred years ago: GE’s reputation for unparalleled integrity is its most precious asset.” ~ Jeff Immelt

INTEGRITY: Everyday, Everywhere, Everyone

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Foundation of leadership engagement

Communication

Concern

Reporting

& Resolution

Training

Risk Assessment

& Abatement

Evaluation

Leadership

Engagement

GE Strategy UK Ministry of

Justice

Adequate

Procedures

“Six Principles”: 1. Proportionate Procedures

2. Top-level commitment

3. Risk Assessment

4. Due diligence

5. Communication (including

training)

6. Monitoring and review

http://www.justice.gov.uk/downloads/legisl

ation/bribery-act-2010-guidance.pdf

Leaders

Culture

Drive

Shape

Own

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Risk assessment & Abatement

Communication

Concern

Reporting

& Resolution

Training

Risk Assessment

& Abatement

Evaluation

Leadership

Engagement

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One example of leader engagement The challenge: learning of potential compliance issues and risks in highly distributed workforce

GE Energy businesses:

• Large workforce:

100,000+ employees

• Highly distributed: >80

countries; thousands of

locations, including small

outposts

• Wide range of activities:

line workers in plants,

sales reps and field

engineers traveling the

globe, executives in

offices

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• Every manager in the business

required to meet with direct

reports, review ethics &

compliance policies, and ask for

questions.

• Standardized training materials

available for managers in 13

different languages.

• Questions not answered in the

manager meetings were

escalated and addressed.

Global “Bottoms-Up” Review Annual review with all employees to identify and address ethics & compliance questions and concerns

GE Energy

Bottoms Up Review2010

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Benefits of Bottoms Up Risk Assessment tool Issue resolution: Key Compliance issues have

been identified early and resolved.

Risk assessment: In addition to answering

individual questions, business leaders use the

database to • track trends and identify risk areas, gaps, and needs for process

improvements and training,

• across the business and in specific geographic areas,

demographics, and product lines.

Message to employees: Ensures direct

managers on site set aside time at least once a

year to emphasize importance of ethics &

compliance and open reporting.

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Concern reporting and resolution

Communication

Concern

Reporting

& Resolution

Training

Risk Assessment

& Abatement

Evaluation

Leadership

Engagement

Human Resources

Legal

Manager Complianc

e

Ombuds

Leaders and Open Reporting

Even with a number of ways that employees can raise concerns . . . a large number of concerns are raised to managers

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Open reporting guidance for leaders

Engage: create a safe environment for raising concerns; make time to listen to employees

Evaluate: Assess and categorize concerns

Escalate: Connect quickly with relevant experts

Ensure: Communicate policy of non-retaliation; thank employees who raise concerns

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Training

Communication

Concern

Reporting

& Resolution

Training

Risk Assessment

& Abatement

Evaluation

Leadership

Engagement

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Online Compliance Training

• Core curriculum for all employees

• Leaders can assign courses to their team based on role

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Managers’ Reporting Tools

• Leaders can follow up with employees using on line tools

• Use the tools to understand current status of training goals

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GE /

15 November 2013

Tracking Training Metrics by Leader

Organization/Function

Total

Population Course 1 Course 2 Course 3

P&L 1 1077 97% 99% 100%

P&L 2 448 98% 100% 100%

Function 1 31 97% 100% 100%

Function 2 15 93% 100% 100%

Function 3 7 100% 100% 100%

P&L 3 2429 97% 99% 99%

Function 4 25 96% 100% 100%

P&L 4 2206 97% 99% 99%

P&L 5 607 80% 81% 92%

Total P&L 6855 96% 98% 99%

• Training metrics given to leaders quarterly

• Business and function data provided to all leaders

• Peer comparisons . . . no one wants to be in the red!

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Training Presentations for Leaders

• Training Materials readily available on line

• Training typically done in staff meetings or huddles

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Training Communication

Concern

Reporting

& Resolution

Risk Assessment

& Abatement

Evaluation

Leadership

Engagement

Communication

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Compliance communication tools

• Pre-packaged messages focusing on various topics

• Such as:

− How to Handle an Integrity Concern

− Intellectual Property

− Revenue Recognition

− Doing Business with Gov’ts

− Supplier Relations

− Risks in Emerging Markets

− FCPA

<<Regional leader E-mail Header Here>> • Over the past several months we’ve been looking at Compliance

topics that are critical to the Energy business’ growth and success. • The topics included: • Foreign Corrupt Practices Act (FCPA) • Compliance Risks in Emerging Markets • Intellectual Property Compliance • If you haven’t taken the opportunity to discuss these topics with your

employees yet, I encourage you to do so without delay. • As a manager and leader in our region, you should be the first

person our employees turn to if they have an Integrity or Compliance concern.

• Currently, we will be focusing on Conflicts of Interest. Please click on

the link to access the manager’s package, and spend some time getting familiar with the content. You can use the tools presented in this pitch to help your employees understand what counts as a Conflict of Interest, what the implications are and how to avoid them.

• <<SPACE FOR LOCALIZED REGIONAL MESSAGE>> • If you have any questions about anything in this package, please

don’t hesitate to contact our regional Compliance leader <<INSERT NAME AND E-MAIL ADDRESS>>

• If you would like more information on any Compliance topic at any

time, you can always visit <<Compliance site>> • Always remember to reinforce with your teams, acting with Integrity

and Compliance is everyone’s responsibility, at all times. • Thank you for your support • Best regards, • <<EXECUTIVE NAME AND TITLE>>

• All-employee

communications

• Tailored local events

at sites worldwide

• Posters, banners,

stickers

• Social media

Digital Energy Atlanta team,

In celebration of Spotlight on Integrity Week, you’re invited for candy and conversation with Raquel daFonseca, DE General Counsel, and Courtney McBurney, Energy Management Compliance Officer. Raquel and Courtney will

be available for questions, open dialogue, and to hand out sweet treats to Digital Energy passersby! Raquel and Courtney will be “meet or treating” between 10:00 – 11:30am this Friday, October 26th, in conference room 6-02A-06 (directly outside the 6th floor

elevator bank). Hope to see you there!

Click here to add a reminder to your Outlook Calendar. The appointment will save to your Calendar as “free” time for meeting scheduling purposes.

Tools for site leaders & managers

Local, Business, and Region Approach

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Communication: Recognize & Reward

• Leaders encouraged to reward employees for compliance

• Process varies by GE business

• Peer Nominations through compliance website

• Top-down leadership nominations

• Awards given during high-profile business update

meetings

• Both plaques and monetary awards

• Compliance awards even given to suppliers & customers!

• Leaders measured by awards given in Goals & Objectives

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Evaluation

Communication

Concern

Reporting

& Resolution

Training

Risk Assessment

& Abatement

Evaluation

Leadership

Engagement

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How do leaders evaluate? • Compliance metrics (training, etc.)

• Number of concerns raised by business, region

• Employee opinion surveys

• Attendance and other indications of employee engagement in compliance processes

or

Summary . . .

November 14, 2013 Greater Houston Business Ethics Roundtable

Andrew Baird