Implementing Ethics in the Workplace Creating the Process

Implementing Ethics in the Workplace: Creating the Process (Abridged version) a program of the Greater Omaha Business Ethics Consortium at Creighton University Sponsored by GOBEC www. omahaethics. org

The Seven Sentencing Guidelines 1. Having Standards 2. Assigned Responsibility - Adequate Resources 3. Due diligence in Hiring 4. Communications and Training 5. Monitoring, Auditing, Reporting 6. Promotion and Enforcement of Ethical Conduct 7. Reasonable Steps to Prevent Misconduct GOBEC www. omahaethics. org

The Challenge is Doing More with Less 1. Have a Plan - preferably a long range plan 2. Have support at the Top and an “Ethics Team” 3. Get an Ethics/Compliance Committee Chartered 4. Put in place a “Code of Conduct” 5. Get a Helpline Set Up 6. Communicate to Managers/Employees 7. Do Some Training - E-Mail, Web, Video, 8. Attend Other Meetings or Training Sessions 9. Give Leaders Ethics Messages to Send Out 10. Use the Company Website Extensively 11. Follow in the Wake of Critical Events 12. Regularly Report on Numbers, Issues to Mgt. GOBEC www. omahaethics. org

Every Company is Unique Leadership History Culture Policies Practices People Regulatory Environment GOBEC www. omahaethics. org

Gallup Organization Findings Tone at the Top VALUES One of the Seven Demands of Leadership GOBEC www. omahaethics. org

Gallup Research Based Findings During nearly forty years of research and tens of thousands of interviews, Gallup has determined the Seven Demands of Leadership. These are behaviors of individuals who are perceived as leaders within their organizations, communities and nations. GOBEC www. omahaethics. org

WHAT GREAT LEADERS DO MOST - the most commonly expressed demands Gallup Organization 7 D E M A N D S VISIONING MENTORING BUILD A CONSTITUENCY CHALLENGING EXPERIENCES MAKING SENSE OF EXPERIENCES STABILIZING VALUES KNOWING SELF GOBEC www. omahaethics. org

Allocation of Time For Creating Alignment Gallup Organization Typical 0 -5% 90 -100% 0 -5% Identifying Core Values Drafting & Redrafting Statements Creating Alignment Desired 10 -20% 0 -5% 80 -90% Identifying Core Values Drafting & Redrafting Statements Creating Alignment GOBEC www. omahaethics. org

Organization and Personnel GOBEC www. omahaethics. org

How to Manage Organizational Ethics? 1. Create a formal program w/resources 2. Put someone in charge of it • General Counsel • HR director • Internal auditor GOBEC www. omahaethics. org

Report to… • • CEO Board of Directors Committee of the Board of Directors Senior Executive GOBEC www. omahaethics. org

Support for Managing Organizational Ethics Programs Ethics and Compliance Officer Association http: //www. theecoa. org/ GOBEC www. omahaethics. org

Compliance with Laws SWEET SPOT Compliance and Ethics Program GOBEC www. omahaethics. org Ethical Behavior

BCBSNE Compliance Organization Board of Directors Audit & Compliance Committee Corporate Compliance Officer (VP Level) Compliance Department (with dedicated Staff) Compliance Cross Functional Team Members GOBEC www. omahaethics. org

Responsibilities 1. Provide Guidance and Answer Questions § Create and Assist in Creating Policy & Procedure § Develop and Deliver Training § Foster Awareness & Encourage Ethical Behaviors 2. Respond to Auditors and Regulators 3. Respond to Complaints (Receive/Investigate/Document/Resolve) 4. Liaison with the Board of Directors 5. § Listen § Report Keep Current on and Facilitate Compliance with Laws and Regulations GOBEC www. omahaethics. org

Communication & Training Getting the right message out GOBEC www. omahaethics. org

What is communicated? Ethics Materials: §Mission §Values §Code of conduct/ethics §Policies §Decision methods §Your culture Ethics program: Who is the Ethics Officer? How to make contact? Senior Management Commitment to Ethics: Why organizational ethics matters? GOBEC www. omahaethics. org

Methods of Communication Evaluate current ethics communication lines – Formal and informal – downward, upward, and two way Clear, consistent, credible messages across communication lines GOBEC www. omahaethics. org

More about Methods of Communication § § § Hiring Announcements Website Email Brochures Meetings – Formal & Informal Orientation sessions Newsletters Manuals Code Handbooks w/certifications Badges and Wallet Cards Key Fobs GOBEC www. omahaethics. org

Ethics Training Design for individual groups Groups: – new recruits – existing employees – top management – local management GOBEC www. omahaethics. org

Ethics Training § Live § Computer based § Trainers § Certification GOBEC www. omahaethics. org

Helplines/Hotlines Getting Started, Outsourcing, Case Management, Operational Flow, Processes, and more Factors and Features GOBEC www. omahaethics. org

Introduction • What – is a helpline/hotline and what do you need to do to establish one? • Why – set up a helpline/hotline? • Who – should answer the line? • How – does a helpline/hotline work? • When – can you expect to fully implement a helpline/hotline? • Free Advice –vendor selection, positioning, themes, questions GOBEC www. omahaethics. org

What…. A Helpline/Hotline Is and Some Alternative Reporting Mechanisms • Helpline…. a confidential toll-free telephone number for employees or others to report suspected violations of law or company policy and to answer policy questions • Hotline – focuses on the reporting of suspected violations and emergencies • Consider departmental needs/requirements (Safety, EEO, Audit, Environmental, HR) • Evolution of reporting channels – – – From post office boxes To confidential faxes To voice mailboxes To confidential e-mails To web-based reporting systems GOBEC www. omahaethics. org

What …. You Need to Establish a Helpline • Senior Management Support and some Money • Understandable Guidelines for using the Helpline that Reflect your Organizational Values and Policies • Multi-function support (Communications, HR, IT, Law, EEO, Operating, Audit, etc. ) • Designated Support Personnel • Accountability and follow-up • Communications and Employee Awareness GOBEC www. omahaethics. org

Union Pacific’s Values Line • Established in 1994 and is outsourced (third-party service) • Covers 55, 000 employees • Is a “business conduct” report line • Does not primarily support Safety, Emergencies, Environmental, Payroll or HR services (internal lines) • Supports EEO, Audit, Policy and Employee Relations reporting GOBEC www. omahaethics. org

Why…. Set up a Helpline or Hotline? • Understand the objectives • Increased emphasis on organizational ethics and compliance– carrot and stick incentives • Establish formal monitoring, auditing and reporting systems • Provide anonymous channel for reporting suspected violations (which may otherwise be unreported) • Raise awareness of commitment to ethical conduct • Establish a proven, effective tool for protecting company GOBEC www. omahaethics. org

Why… Set up a Helpline or Hotline? Legal and Regulatory Requirements • Federal Sentencing guidelines – One of seven steps in an effective ethics and compliance program • SEC implementing rules • New York Stock Exchange proposed listing requirements • Sarbanes-Oxley Act (enacted 2002) – Sections 301 and 806 GOBEC www. omahaethics. org

Who …. should answer the line? Decision Process • External – – – 24/7/365 Anonymity Multilingual Perceived confidentiality Vendor Features • Internal – – – – Staffing/budget Time constraints Employee trust Knowledge of Policies Translation services? Training/Turnover Software GOBEC www. omahaethics. org

Who? …. Analyzing Vendors • Vendor Selection Process – Talk with people who have lines – Visit Vendor Websites – Review intake process/procedures – Request proposals, review best practices – Include your IT department – Perhaps absorb existing call system(s) – Consider hidden costs, extra reporting GOBEC www. omahaethics. org

How…. Does a report line work? - Call is placed to the UP Values Line designated toll-free number (800 -998 -2000) OR shared toll-free number – Helpline personnel records information according to general protocol or your specific design (EEO, FMLA, etc. ) – Classifications, information, key issues – Case is reported to you and/or others via e-mail or web links – Case management data is summarized each month or through ad hoc reports GOBEC www. omahaethics. org

Operational Key Points • • • Spread Out the Work Expect 1 -2% of Employees to call/yr Who Calls the Line? Types of Calls, Categories Anonymous versus Identified (20/80) Sufficient Investigation Resources No Retaliation for good faith reporting Confidentiality to extent possible Follow up is essential GOBEC www. omahaethics. org

GOBEC www. omahaethics. org

Questions? • Cost – $1, 500 to $30, 000+ per year + your time • Reports – see handouts • Vendors – The Network, Ethics. Point, Lighthouse, – Allegiance, and many more. – See handouts of hotline best practices • Helping to maintain a culture of integrity GOBEC www. omahaethics. org

Enforcement Ensuring Observance Putting into practice Making it happen GOBEC www. omahaethics. org

Enforcement • Reality: Codes and rules without enforcement and adherence are useless. • Question: How do we ensure compliance with legal rules and corporate policies? GOBEC www. omahaethics. org

Why should you enforce? You have Two Choices: • Corporate Enforcement • Government Enforcement • The best enforcement is self-enforcement! • Better your company do it than the EEO, SEC, IRS, court, etc. GOBEC www. omahaethics. org

Types of Enforcement The best policy is to prevent wrongdoing 1. Getting Compliance (preventative) • • Training and Education (‘I didn’t know’) Review: Audit for compliance and quality Incentives: compensation and recognition Model: Leadership talks, and walks the talk 2. Punishment (responsive) • • • Clear Sanctions in place Ethics Committee (method in place) Someone with oversight responsibility GOBEC www. omahaethics. org

Implementing Enforcement • Consistency is Important across Firm – Cross-check from HR for termination issues • Codified Policy is helpful • Yet, Flexibility is important also • Realize Firing is sometimes correct action for sake of firm. • Unions usually have process/expectations GOBEC www. omahaethics. org

Correcting Problems • Sentencing Guidelines also require that you have a method of remedying ethical problem areas in your corporate culture • Examples: – – Ethics committees Ombudsman Ethics Officer Stated Corporate Policy On Correction Procedure GOBEC www. omahaethics. org

The Seven Sentencing Guidelines 1. Having Standards 2. Assigned Responsibility - Adequate Resources 3. Due diligence in Hiring 4. Communications and Training 5. Monitoring, Auditing, Reporting 6. Promotion and Enforcement of Ethical Conduct 7. Reasonable Steps to Prevent Misconduct GOBEC www. omahaethics. org

Wrap Up Discussion GOBEC www. omahaethics. org