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Implementing Ethics in the Workplace: Creating the Process(Abridged version) a program of the Greater Omaha Business Ethics Consortium
at Creighton University
Sponsored by
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
The Challenge is Doing More with Less1. Have a Plan - preferably a long range plan2. Have support at the Top and an “Ethics Team”3. Get an Ethics/Compliance Committee Chartered4. Put in place a “Code of Conduct”5. Get a Helpline Set Up6. Communicate to Managers/Employees7. Do Some Training - E-Mail,Web,Video, 8. Attend Other Meetings or Training Sessions9. Give Leaders Ethics Messages to Send Out 10. Use the Company Website Extensively11. Follow in the Wake of Critical Events12. Regularly Report on Numbers, Issues to Mgt.
Every Company is UniqueLeadership
History
Culture
Policies
Practices
People
Regulatory Environment
Gallup Organization Findings Tone at the Top
VALUES
One of the Seven Demands of Leadership
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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.
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WHAT GREAT LEADERS DO MOST- the most commonly expressed demands
Gallup Organization
VISIONING
MENTORING
CHALLENGING EXPERIENCES
KNOWING SELF
MAKING SENSE OF EXPERIENCES
STABILIZING VALUES
BUILD A CONSTITUENCY
7DEMANDS
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Allocation of TimeFor Creating Alignment
Gallup Organization
Typical
Drafting & RedraftingStatements
IdentifyingCore Values
CreatingAlignment
Desired
IdentifyingCore Values
CreatingAlignment
Drafting & RedraftingStatement
s
0-5% 90-100% 0-5%
0-5%10-20% 80-90%
Organization and Personnel
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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
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Report to…
• CEO
• Board of Directors
• Committee of the Board of Directors
• Senior Executive
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Support for Managing Organizational Ethics Programs
Ethics and Compliance Officer Association http://www.theecoa.org/
Compliance and Ethics Program
Compliance with Laws
Ethical Behavior
SWEET SWEET SPOTSPOT
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BCBSNE Compliance Organization
Board of Directors
Audit & Compliance Committee
Corporate Compliance Officer (VP Level)
Compliance Department (with dedicated Staff)
Compliance Cross Functional Team Members
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Responsibilities1. 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
Listen
Report
5. Keep Current on and Facilitate Compliance with Laws and Regulations
Communication & Training
Getting the right message out
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What is communicated?Ethics Materials: Mission
ValuesCode of conduct/ethicsPoliciesDecision methodsYour culture
Ethics program: Who is the Ethics Officer? How to make contact?
Senior Management Commitment to Ethics:
Why organizational ethics matters?
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Methods of Communication
Evaluate current ethics communication lines– Formal and informal– downward, upward, and two way
Clear, consistent, credible messages across communication lines
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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
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Ethics Training
Design for individual groups
Groups:– new recruits – existing employees– top management– local management
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Ethics Training
Live
Computer based
Trainers
Certification
Helplines/Hotlines
Getting Started, Outsourcing, Case Management, Operational Flow,
Processes, and more
Factors and Features
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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
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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
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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
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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
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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
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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
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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
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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
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How…. Does a report line work?
- Call is placed to the UP Values Linedesignated 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
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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
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Types of Values Line Reports Jan. 1 - Aug. 31, 2006
Discrim./Harass.3%
Policy11%
Smoking1%
Union/CMS/Discipline6%
Safety4%
Pay4%
Other1%
Theft & Drugs1%
Job Perf./Fitness0%
Threats/violence3%
Supervision/Relations66%
Supervision/Relations
Discrim./Harass.
Policy
Smoking
Union/CMS/Discipline
Safety
Pay
Theft & Drugs
Threats/violence
Job Perf./Fitness
Other
Butch Ethington Ombudsman 402-544-2113
595
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Questions?
• Cost – $1,500 to $30,000+ per year + your time
• Reports – see handouts
• Vendors – The Network, EthicsPoint, Lighthouse,– Allegiance, and many more.
– See handouts of hotline best practices
• Helping to maintain a culture of integrity
EnforcementEnsuring Observance
Putting into practice
Making it happen
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Enforcement
• Reality: Codes and rules without enforcement and adherence are useless.
• Question: How do we ensure compliance with legal rules and corporate policies?
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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.
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Types of EnforcementThe 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
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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
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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
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
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Wrap Up Discussion
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