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 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 - ,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.

Every Company is Unique Leadership History Culture Policies Practices People Regulatory Environment

Gallup Organization Findings Tone at the Top V ALUES One of the Seven Demands of Leadership

GOBEC 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 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 7DEMANDS7DEMANDS

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

Organization and Personnel

GOBEC 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 Report to… CEO Board of Directors Committee of the Board of Directors Senior Executive

GOBEC Support for Managing Organizational Ethics Programs Ethics and Compliance Officer Association

Compliance and Ethics Program Compliance with Laws Ethical Behavior SWEET SPOT

GOBEC 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 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  Listen  Report 5.Keep Current on and Facilitate Compliance with Laws and Regulations

Communication & Training Getting the right message out

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

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

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

GOBEC Ethics Training  Live  Computer based  Trainers  Certification

Helplines/Hotlines Getting Started, Outsourcing, Case Management, Operational Flow, Processes, and more Factors and Features

GOBEC 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 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 s –To web-based reporting systems

GOBEC 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 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 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 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 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 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 How…. Does a report line work? - Call is placed to the UP Values Line designated toll-free number ( ) 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 or web links –Case management data is summarized each month or through ad hoc reports

GOBEC 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

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

Enforcement Ensuring Observance Putting into practice Making it happen

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

GOBEC 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 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 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 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

GOBEC Wrap Up Discussion