AN OUNCE OF PREVENTION Taking a Comprehensive Approach

AN OUNCE OF PREVENTION Taking a Comprehensive Approach to Compliance Panelists: Mark Tabs, UBS and Mirko Consolascio, Credit Suisse Moderator: Tobias Steinemann, Yerra Solutions UNRAVEL COMPLEXITY. COPYRIGHT © 2016 YERRA SOLUTIONS | 1

WHO ARE WE? TOBIAS STEINEMANN Legal Director Yerra Solutions § § § Admitted to Swiss bar in 2012 specializing in corporate & commercial law Holds an LL. M. in IP and a recently-completed MBA Helps Yerra serve the legal and compliance, e. Discovery and IP needs of large, global corporations Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 2

WHO ARE WE? MIRKO CONSOLASCIO Head of Legal Quality Control Credit Suisse § Joined CS in 1990 and has held multiple project management roles throughout the organization § Now manages strategic projects and transformation programs for the General Counsel Strategy and Program office § The office is tasked with creating progressive efficiency and effectiveness for the division of legal and compliance for the entire global bank § Operational excellence master black belt Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 3

WHO ARE WE? MARK TABS Managing Director, Group Technology UBS § Joined UBS in 2001 and has held multiple technology-focused roles across the organization § Oversees global infrastructure of people, process and technology to ensure compliance with regulations and UBS’ e. Discovery Operating Model § Implemented the e. Discovery technology function to deliver globallyconsistent and legally-defensible service to the entire organization Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 4

COMPLIANCE CHALLENGES FOR 2017 AND BEYOND EXTERNAL INTERNAL § Increasing scrutiny, especially for certain sectors (banking) § Misalignment of executive and compliance perspective on the objectives of a compliance program § Regulatory uncertainties in both developing and “first-world” nations (Brexit, US election, etc. ) § Balancing the need to control costs with maintaining risk mitigation and program quality Unravel Complexity. § Creating an organization-wide culture that fosters compliance, both for people and data § Struggle to be proactive in the face of uncertainty and dealing with increasing focus on personal liability COPYRIGHT © 2016 YERRA SOLUTIONS | 5

THREE STEP APPROACH Build a culture that fosters ethical & compliant behavior Put controls in place that add checks on compliance hotspots Build an efficient operation to effectively respond to incidents Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 6

STEP 1 – BUILD THE CULTURE Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 7

CULTURE – DEFINING OBJECTIVES The 2016 Compliance and Ethics Program Objectives Survey showed a disconnect between the way compliance professionals see the goals of their programs and the way they believe top management sees those goals. The most drastic example: 49. 5% believe the primary objective of the ethics & compliance program is to promote an ethical culture Unravel Complexity. VS 13. 3% believe their organization’s management sees the primary objective of the ethics & compliance program is to promote an ethical culture COPYRIGHT © 2016 YERRA SOLUTIONS | 8

PANELIST STORIES What explains this 36% gap? How do you see this manifest itself in your organization and what efforts, if any, have been made to align? Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 9

CULTURE – IT’S ABOUT DATA TOO Culture is about people behaving and handling themselves in a compliant manner. It must also be about them handling your organization’s data (electronically stored information) in a compliant manner. Unravel Complexity. Policies Training Refine Checks COPYRIGHT © 2016 YERRA SOLUTIONS | 10

PANELIST STORIES How do you train people both within legal and throughout the organization on policies related to ESI? Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 11

PANELIST STORIES How do you measure the effectiveness of the policies and whether they are being followed? Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 12

STEP 2 – CREATE CONTROLS Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 13

TRUST BUT VERIFY TRUST VERIFICATION If the Legal department touches a process, it is certainly subject to some compliance concern. Be diligent with process controls to mitigate risk. Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 14

Balanced Priorities to Deliver a Competitive Advantage Quality Control � The process of manager’s systematically reviewing documentation outputs to ensure overall compliance with stated policies and consistency of data with actual negotiations Strategic Priorities 2 Business Objectives � For e. g. , a 4 -eye review is conducted prior to the execution copy being provided to the Counterparty Quality Assurance F 2 B Processes Data & Analytics Technology Subject Matter Expertise Professional Excellence 1 Control Effectiveness 3 � Sample testing of controls embedded within the contract negotiation process to ensure consistency/effectiveness of local efforts to drive policy adherence Control Efficiency � For e. g. , spot checks are performed on a sample of contracts that were executed in the previous month 15

Implementing Quality Control and Assurance Tools Cost of Poor Quality COPQ Long term impact on quality In principle, the later the defect is identified during the production process, the more expensive will be to remediate the defect Cost to identify and remediate defect Time Prevention Detection � Training � 4 -eyes principle � Policy/ Manual/ Standards � approval chain � Application dropdown selection � check sample � Application Mandatory fields � data report analysis � KPI and dashboard analysis Correction � Disciplinary protocol & matrix � Response frameworkfor issues, defects, breaches, incidents This cost includes all the labor cost, rework cost, disposition costs, and material costs that have been added to the unit up to the point of rejection.

PANELIST EXAMPLE Structured Credit Agreements Compliance Process: § Legal deals with many commonly used contracts that govern transactions, for example ISDA master agreements concerning 'over the counter' derivatives. § While mundane, mistakes in drafting any of these pose major risk. ISDA Master Agreement Drafted Reviews for Data Completeness & Errors Performed by a “higher level” managed services provider for additional controls Unravel Complexity. Final sign-off by Internal Staff Minimal review required; administrative burdens removed COPYRIGHT © 2016 YERRA SOLUTIONS | 17

STEP 3 – RESPOND TO INCIDENTS Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 18

PROACTIVE COMPLIANCE PROGRAMS ARE WORKING During the past two years, can you recall at least one time when the compliance program prevented misconduct from occurring? If Yes, please estimate the # of times this happened over the last 2 years: ALL NON 1 -5, 000 5, 001 -30, 000 30, 001+ HEALTHCARE RESPONSES HEALTHCARE EMPLOYEES 0 9% 7% 10% 12% 2% 6% 1 -5 46% 43% 49% 46% 21% 6 -10 22% 26% 18% 23% 18% 26% 11 -20 10% 12% 9% 9% 14% 12% 21 -50 6% 5% 7% 3% 8% 21% 51 -100 3% 3% 4% 3% 101+ 4% 5% 3% 1% 8% 12% Incidents still occur and we must be prepared to be REACTIVE to investigations and litigation with speed and effectiveness. While still considering budgets. Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 19

BUT… Incidents still occur and we must be prepared to be REACTIVE to investigations and litigation with speed and effectiveness. While still considering budgets. Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 20

CONSISTENT & GLOBALLY ALIGNED PROCESSES ARE THE CENTER OF A DEFENSIBLE SERVICE. Best Practice Pillars e. Discovery Best Practices Global Operating Model Processes, Procedures & Tools Global Operating Model Staffing Model Processes, Procedures & Tools RASCI Governance, Policies Documentation, Reliability & Repeatability Expertise, Scalability & Coverage IT Infastructure / Data Sources Legal & Regulator Requirements / Business Needs Unravel Complexity. Staffing Model 1 Roles & Responsibilities within Legal, IT & Business 2 Information & e. Discovery Governance 3 e. Discovery Policies 4 e. Discovery Support Model 5 Process Framework & Documentation 6 Standard Operating Procedures (Checklists, Templates) 7 SLA’s / CLA’s 8 Quality Assurance Process 9 Approval Framework 10 Knowledge Documentation 11 e. Discovery Toolest for Data Preservation, Collection, Processing & Review 12 In-House Subject Matter Experts 13 Funding Model / Cost Tracking 14 KPI’s 15 Global / Regional / Local Staffing 16 Strategic Vendor Relationships COPYRIGHT © 2016 YERRA SOLUTIONS | 21

PANELIST EXAMPLE - Global e. Discovery services structure Mix of in-house, outsourced and hybrid services combine to maximize efficiency while maintaining quality Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 22

WRAP-UP DISCUSSION AND QUESTIONS Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 23

ABOUT OUR SPONSOR Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 24

WHO IS YERRA? Exclusive Focus True Global Expertise Trust & Partnership We are 150+ highly-specialized professionals staffing 7 global offices. Creative Solutions Profitable Independent WE PARTNER WITH OUR CLIENTS TO IMPROVE LEGAL, IP & EDISCOVERY OPERATIONS. OUR FOCUS IS DELIVERING MEANINGFUL RESULTS FOR OUR CLIENTS AND ENRICHING THE LIVES AND CAREERS OF OUR EMPLOYEES. Our clients are typically large, global, complex organizations operating in regulated industries Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 25

OUR GLOBAL PRESENCE UNITED STATES New York | New Jersey UNITED KINGDOM London | Durham POLAND Wroclaw SWITZERLAND Basel HONG KONG SINGAPORE Unravel Complexity. 23 16 Languages Spoken Nationalities Represented COPYRIGHT © 2016 YERRA SOLUTIONS | 26

UNRAVEL COMPLEXITY In-House Legal e. Discovery Intellectual Property e. Discovery Consulting Managed Services Technology Solutions Unmatched consulting expertise to deconstruct complex processes and drive change in your organization. Scalable managed services teams improve operational efficiency and close critical process gaps. Flexible technology solutions simplify complex workflows and provide advanced analytics. Unravel Complexity. COPYRIGHT © 2016 YERRA SOLUTIONS | 27

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