Hofstra University Conferenceon

Compliance and Culture of Integrity Monitoring and Auditing Compliance and

Ethics ProgramsOctober 29, 2014

Hofstra University Conferenceon

Compliance and Culture of Integrity Monitoring and Auditing Compliance and

Ethics ProgramsOctober 29, 2014

Leonard A. David

SVP and Chief Compliance Officer

CORPORATE COMPLIANCE

• Compliance programs developed/implemented by business organizations to control risk of violations of law and policy, promote ethical conduct and thereby maintain/enhance corporate reputation.

• Federal Sentencing Guidelines set legal incentives to develop compliance programs and specified key elements:–Establish standards and procedures–Executive Leadership to be knowledgeable re: content/operations

and have it resonate throughout the organization - - “tone at the top.”–Senior personnel to be assigned overall program responsibility:

effectively “cascade” it throughout the organization• Systematically communicate, reinforce and train all

employees on program - - should become part of “corporate DNA"

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CORPORATE COMPLIANCE

• Some Factors in Increased Attention to Compliance Matters, Worldwide–Globalization–Focus on Compliance/Ethics–Trend toward Corporate Social Responsibility– Increased focus on GRC (governance, risk, control)–Terrorism–Corporate Misconduct Cases– Increased Communication and Dissemination of News and

Information - - Demand for Transparency

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CORPORATE COMPLIANCE

“You don’t need a weathervane to know which way the wind blows.”

Bob DylanSubterranean Homesick Blues

1965

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CORPORATE COMPLIANCE

“Just because I’m paranoid doesn’t mean they’re not after me.”

Anonymous

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MAIN TAKEAWAY

•While there are many legal, regulatory, organizational and societal forces impacting development of compliance programs, there’s no “One Size Fits All.”

• There are a variety of ways to implement, monitor and audit each program based on size, resources, industry, commitment and level of engagement of each unique organization.

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CASE STUDY – HENRY SCHEIN INC.

Henry Schein Operates its Businesses in a Complex Global Regulatory

Environment

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REGULATORY MAZE

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FDA

DEA

IRS

CE

FAA

VAWD

EPA

SEC

ISO

WORLDWIDE BUSINESS STANDARDS

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Our comprehensive legal and regulatory

program is fundamental to our Company’s values-

based culture

Our Global Code of Conduct

COMPLEMENTARY/SUPPLEMENTARY CORE POLICIES

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MONITORING

•WWBS Handbook/Orientation• Independent outsourced training and testing, and

biannual refreshers, for all employees worldwide in multiple languages•Alertline•Quarterly Reports to Audit Committee• Periodic Reports to Board of Directors•Compliance Committee – meets quarterly

–Dedicated senior personnel including CCO

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MONITORING

•Cultural Survey• Internal Audit•Outside Auditors• Tone at Top – CEO buy-in and leadership

reinforcement at virtually every management, executive management and full Board meeting– Institutionalizes a corporate Culture of Compliance

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