1. The Ombuds’ Role Helping Create an Ethical and Transparent Culture for Sustainability

2. 2 Agenda Issue Management: The role of an organizational Ombuds; how it complements formal channels’ roles Issue Management: The role of an organizational Ombuds; how it complements formal channels’ roles Ombuds in action Ombuds in action Ombuds reporting and feedback to enterprise leaders Ombuds reporting and feedback to enterprise leaders Case Study Case Study Wrap-up, Q&A Wrap-up, Q&A

3. 3 A Sustainable Enterprise Issue Management A complete issue management system enables a sustainable enterprise to mitigate risk, ensure transparency and foster an ethical work environment and culture

4. 4 A Sustainable Enterprise Issue Management To achieve transparency, mitigate risk and sustain ethics, a issue management system generates; Unfiltered communications Unfiltered communications Timely identification of issues Timely identification of issues Effective and fair issue resolution Effective and fair issue resolution Changes which prevent issue recurrence Changes which prevent issue recurrence

5. 5 A Sustainable Enterprise Issue Management To be complete and successful, an issue management system must have the capabilities of both formal and informal channels... To be complete and successful, an issue management system must have the capabilities of both formal and informal channels... Formal: HR, Compliance, Health & Safety, line management, Ethics, Audit...... Formal: HR, Compliance, Health & Safety, line management, Ethics, Audit...... Informal: An organizational Ombudsman Informal: An organizational Ombudsman

6. 6 Formal Channels’ Roles in Issue Management Compliance, Ethics, Legal, hotlines and line management are critical, e.g. The Roles of formal channels, e.g., HR, Compliance, Ethics, Legal, hotlines and line management are critical, e.g. Act as strategic partners to management Act as strategic partners to management Set and enforce policy Set and enforce policy Accept notice Accept notice Formally investigate Formally investigate Keep records Keep records Serve as change agents Serve as change agents

7. 7 Gap However….. Formal channels are not enough to mitigate risk, ensure transparency and foster an ethical culture for the sustainable enterprise

8. 8 Gap The recent Ethics Resource Center Survey shows that formal programs are on the rise, but the positive outcomes of those programs are not. Over 2 years: The recent Ethics Resource Center Survey shows that formal programs are on the rise, but the positive outcomes of those programs are not. Over 2 years: Employees observing unethical behavior increased from 46% - 52% Employees observing unethical behavior increased from 46% - 52% Employees reporting unethical behavior decreased from 45% - 35% Employees reporting unethical behavior decreased from 45% - 35% Conclusion: Organizational culture is more influential in determining outcomes Source: The Ethics Resource Center 2003 Survey Source: The Ethics Resource Center 2003 Survey

9. 9 Gap The types of observed unethical behavior were not trivial, e.g. Abusive or intimidating behavior Abusive or intimidating behavior Lying to employees, customers, vendors, public Lying to employees, customers, vendors, public Violations of safety Violations of safety Discrimination Discrimination Falsification of financial reports Falsification of financial reports Giving or receiving bribes Giving or receiving bribes

10. 10 Ombuds’ Role in Issue Management An Ombuds program fills the gap. It offers unique and essential capabilities that formal channels because of their mission can not. A seasoned professional Ombuds with thorough knowledge of the organization provides: Independence and official neutrality Independence and official neutrality Informal guidance and coaching Informal guidance and coaching Complete confidentiality Complete confidentiality Organization-wide change advocacy Organization-wide change advocacy

11. 11 Ombuds’ Role: Issue Identification An Ombuds helps get issues identified and surfaced by: Ensuring that all employees know about and understand the role Ensuring that all employees know about and understand the role Building trust with constituents Building trust with constituents Generating options Generating options Coaching; providing guidance Coaching; providing guidance Surfacing issues which are directly observed or a threat of serious harm Surfacing issues which are directly observed or a threat of serious harm

12. 12 Ombuds’ Role: Issue Resolution An Ombuds assists in resolving workplace problems by: Acting as a communications conduit Acting as a communications conduit Getting issues to the most appropriate resource Getting issues to the most appropriate resource Providing shuttle diplomacy Providing shuttle diplomacy Coaching formal channels re resolution options Coaching formal channels re resolution options Providing informal mediation Providing informal mediation

13. 13 Ombuds’ Role: Issue Prevention An Ombuds identifies improvement opportunities and drives change via: Providing early warnings Providing early warnings Analyzing issue trends and aligning them with risk priorities and key strategies Analyzing issue trends and aligning them with risk priorities and key strategies Advocating changes and issue prevention initiatives Advocating changes and issue prevention initiatives

14. 14 Ombuds’ Role: Compliance Ombuds help comply with laws and regulation, e.g. U.S. Sentencing Guidelines Ombuds help comply with laws and regulation, e.g. U.S. Sentencing Guidelines Sec.8B2.1.b)(5) to have and publicize a system, which may include mechanisms that allow for anonymity or confidentiality, whereby the organization's employees and agents may report or seek guidance regarding potential or actual criminal conduct without fear of retaliation. Sec.8B2.1.b)(5) to have and publicize a system, which may include mechanisms that allow for anonymity or confidentiality, whereby the organization's employees and agents may report or seek guidance regarding potential or actual criminal conduct without fear of retaliation.

15. 15 Ombuds’ Role: Important Sustainability Issues Importance of Sustainability Issues* 1. Business ethics and integrity 4. Well-being of employees * AMA/HRI Global Sustainability Study – 1365 respondents globally

16. 16 Ombuds’ Role: Factors Driving Sustainability Factors Driving Sustainability in 10 Years * 1. Improving image with shareholders & public public 3. Attracting & retaining diverse talent 4. Ensure worker health & safety 5. Increasing workforce productivity * AMA/HRI Global Sustainability Study – 1365 global respondents

17. 17 Ombuds’ Role: Factors Driving Sustainability Factors Driving Sustainability in 10 Years * 6. Effectively addressing regulatory restrictions 7. Meeting expectations of investors & lenders 8. Improving employee morale & engagement * AMA/HRI Global Sustainability Study – 1365 global respondents

18. 18 Handouts International Ombudsman Association Code of Ethics International Ombudsman Association Code of Ethics Chart: Ombuds Program compliments Formal Channels Chart: Ombuds Program compliments Formal Channels Feedback to leaders example Feedback to leaders example The Compleat Ombuds, by Margo Wesley The Compleat Ombuds, by Margo Wesley When Formal Channels Aren’t Enough: The Value of an Ombuds Program, by Richard Starr, Randy Williams, Arlene Redmond When Formal Channels Aren’t Enough: The Value of an Ombuds Program, by Richard Starr, Randy Williams, Arlene Redmond