1. Is Your Ethics Program in Order?
Laurel Brandstetter
Schnader Harrison Segal & Lewis llp

2. Today’s Reality
Companies are paying millions of dollars to settle avoidable criminal and civil claims stemming from ethical lapses.
Ethical lapses often necessitate internal investigations, which can be expensive and disruptive to your business.
Beyond penalties, contract termination and debarment can result when a company fails to act ethically.
Procurement fraud remains a top priority for the United States Department of Justice.

3. Refining internal controls and developing awareness through ethics programs are essential to mitigate risk of dishonesty and exploitation.

4. Key Benefits of an Ethics Program
Informs management of potential problems before they become costly mistakes.
Provides documented standards and deter both government investigations and private lawsuit.
Creates and fosters a culture of transparency for the benefit of employers and employees alike.
Reassures employees of ethical behavior and avoids costly turnover.
Assists to attract new and retain existing clients/customers because they are more willing to work with companies they trust.

5. 3 Essential Components of an Effective Ethics Program
Written Code of Business Ethics
Internal Controls designed to help employees comply with the Code
Ethics Training Program

6. Program Creation and Implementation
Design and implement internal controls.
Employee training and periodic re-training.
Presentation on topic-specific concerns, as needed.
Ethics hotline.
Develop protocols for responding to misconduct.

7. Program Assessment and Cultural Analysis
Comprehensive appraisal questionnaire.
Program assessment or assessment of business needs.
Employee survey – cultural assessment analysis.

8. Employee Survey
Designed to gather feedback from employees and gauge attitudes toward ethical issues that may arise.
Used to create and tailor an effective ethics program.
Responses are anonymous to encourage honesty and participation.

9. Written Code of Business Ethics
A code of business ethics explains and provides open disclosure of the way an organization operates.
Provides visible guidelines for behavior.

10. Written Code of Business Ethics
Key Elements
Commitment by directors/top management
Letter from the President communicating what the Code is and the organization’s commitment to it
Statement of policy concerning the Code and general rules.
Standards of conduct that communicate issues employees should be aware of and what to do if confronted with an issue.

11. Internal Controls
Serve to establish standards and procedures to facilitate timely discovery of improper conduct.
Ensure that corrective measures are promptly instituted and carried out.

12. Internal Controls Effective Controls Involve:
The assignment of responsibility at a high level and adequate resources to ensure effectiveness.
Periodic review of polices and practices
Monitoring and auditing to detect inappropriate conduct
Periodic evaluation of ethics programs
Disciplinary action for improper conduct
Timely disclosure to regulatory agencies
Notice that self-disclosure is a part of the ethics program.

13. Internal Controls Common types: Corporate compliance measures
Audit practices
Reporting standards
Hotline
Review of historical response to misconduct

14. Ethics Training Who Purpose Scope
EVERYONE. Principals, employees, and if appropriate agents and subcontractors.
Purpose
To inform employees of the business code of ethics and how to comply with the code.
Scope
Should include discussion of potential violations relating to fraud, conflict of interest, bribery, gratuity violations, false claims act, procurement integrity, and other industry-specific regulations.