1. L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004. TABLE 6.1 IDENTIFICATION OF BUSINESS RISKS RISK FOCUS/CATEGORIES AICPA/ CICA INSTITUTE OF INTERNAL AUDITORS Company Objectivesx Areas of Impact:Reputation Assets, Revenues, Costs Performance Stakeholders xxxxxxxx Sources of Risk:Environmental Strategic Operational Informational Financial xxxxxxxx xxxxxx Specific Hazards or Perils:Lawsuits Fire Theft Earthquake/natural disasters xxxxxx xxxx Degree of Control over the RiskLittle, Some, Greatx Documentationx

2. L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004. TABLE 6.2 RISK EVENTS CAUSING A DROP OF OVER 25 PERCENT IN FORTUNE 1000 STOCKS, 1993-1998 PERCENT Strategic RisksCustomer Demand Shortfall Competitive Pressure M & A Integration Problems Misaligned Products Customer Pricing Pressures Loss of Key Customer Regulatory Problems R & D Delays Supplier problems 24 12 7 6 4 2 1 58 Operational RisksCost Overruns Accounting Irregularities Management Ineffectiveness Supply Chain Issues 11 7 6 31 FinancialForeign Macro-economic Issues High Input Commodity Price Interest Ratio Fluctuation 3 2 1 6 HazardLawsuits Natural Disasters 0 Unknown5 SOURCE: Figure 0.3, Mercer Management Consulting, reproduced in IIA Study, xxix. 4

3. L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004. TABLE 6.3 OVERLAP OF TRADITIONAL AND ETHICS RISK/STAKEHOLDER INTERESTS ASSESSMENT APPROACHES USUALLY IMPORTANT STAKEHOLDER GROUPS RISKSSHAREHOLDERSCONSUMERSEMPLOYEESGOVERNMENTENVIRONMEDIA Strategic Reputation Stakeholder Other xxxxxx xxxx Some xSome OperationsxPartial Financialx HazardxPartial EthicsFull

4. L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004. FIGURE 6.1 ETHICS RISK AND OPPORTUNITY IDENTIFICATION AND ASSESSMENT Phase 1 Develop a projected, ranked understanding of stakeholder interests/ expectations Identify Rank: Urgency, power, legitimacy Dynamic analysis Confirmation Phase 2 Compare activities to expectations to identify ethics risks & opportunities Performance: Inputs, outputs, quality Hypernorm: Honesty, fairness, compassion, integrity, predictability, responsibility Reputation Driver: Trustworthiness, credibility, reliability, responsibility Phase 3 Reports by Stakeholder group Product or service Corporate objective Hypernorm value Reputation driver

5. L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004. FIGURE 6.2 DIAGNOSTIC TYPOLOGY OF ORGANIZATIONAL STAKEHOLDERS Stakeholder’s Potential for Threat Stakeholder’s Potential For Cooperation High Low Type 4 Mixed Blessing Type 1 Supportive Type3 Nonsupportive Type 2 Marginal Strategy Collaborate Strategy Involve Strategy Defend Strategy Monitor SOURCE: G. Savage et al, “Strategies for assessing and managing organizational shareholders”, The Executive, Vol. 5, no. 2, May 1991, 65. Low

6. L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004. TABLE 6.4 EMPLOYEE RIGHTS THEMES IN NORTH AMERICA Privacy and dignity of person, personal information and property:  Boundaries of personal rights, employers rights and right of the public  Proper procedures: notification and consent  Testing for substance abuse  Harassment, sexual and otherwise Fair treatment:  Discrimination: age, race, sex, employment, pay  Fair policies  Is equal treatment fair? Healthy and safe work environment  Expectations: reasonability, right to know, stress, family life, productivity  Quality-of-life concerns: smoking, health  Family-friendly workplaces Ability to exercise conscience  Blind loyalty  Whistle-blowing Trust – the key to leadership, innovation, loyalty, and performance – depends on ethics  Operations: downsizing, contingent workforce

7. L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004. FIGURE 6.3 PHASES OF A CRISIS Cost To Organization Unanticipated Crisis Anticipated Crisis Control Begins Controlled Pre-crisis Uncontrolled Reputation Restoration Continuing Reputational Imapct Post- Crisis State Reached Time Phases

8. L.J. Brooks, Business & Professional Ethics for Directors, Executives, & Accountants, 3e, Thompson, South-Western, 2004. TABLE 6.5 HOW TO INCORPORATE ETHICS INTO CRISIS MANAGEMENT Prevention and warning:  Code of conduct: identify values, adopt, emphasize and make effective  Identify potential ethics problems and warning indicators, and pre-plan responses, as part of an ongoing enterprise risk management and contingency planning program  Ethical “red flags” or warning indicators:  Training to emphasize how to identify and what to do about them  Check as part of an ongoing enterprise risk management system  Encourage by publicizing good examples, and awarding paper medals Analytical approach:  Apply a stakeholder-analysis framework as discussed in Chapter 5:  External ethics consultant  Checklist or specific time to consider:  ethics issues, alternatives & opportunities Decision itself:  Ethics/company’s values: integrate into the decision making:  Consider how the crisis or its impact can be influenced ethically–timing, cost, mitigation?  Specific consideration of how to improve the organization’s reputation drivers including–trustworthiness, responsibility, reliability, and credibility  Specific ethical communications objectives  Assign ethics watch-dog responsibility  Use a checklist or template with specific ethics objectives  Apply moral imagination as discussed in Chapter 5 Communications on ethical intent to:  Media, employees, customers, government, public & other stakeholders