EVERFI: Building an Ethical Culture: Conduct Training Best Practice

Building an Ethical Culture:
Conduct Training Best Practices
Michael Volkov
CEO,
Volkov Law Group
Michele Collu
Marketing Manager,
EVERFI
June 14, 2018

Your Presenters
Michael Volkov is the CEO and owner of The Volkov
Law Group. He has over 30 years of experience in
practicing law, and as a former federal prosecutor and
veteran white collar defense attorney, he has
expertise in areas of compliance, internal
investigations and enforcement matters.
volkovlaw.com
corruptioncrimecompliance.com
Michael Volkov
CEO, The Volkov Law Group
Michele Collu
Marketing Manager, EVERFI
Michele Collu is a Marketing Manager at EVERFI,
where he curates webinars and other content
marketing efforts. He is a registered attorney with
the Bar of Milan (Italy) and holds a Master in
International Laws (LL.M.) from UC Berkeley, with
Certificate of Specialization in Law and Technology.
As of 2015, he has been leveraging his legal
background in the realm of online corporate
compliance training.

Housekeeping
This webinar is hosted
by EVERFI & The
Volkov Law Group
If you are using the audio on
your computer and
experience any issues,
please dial in with your
phone.
Please input accessibility
issues and questions for the
presenter in the chat bar.
After the presentation, we
will send an email with a
link for viewing.
?

• The importance of an ethics and compliance
program
• The fraud triangle and the ethics culture wheel
• Case Example: Wells Fargo
• Guidance for Training Programs
Overview of Today’s Webinar

The Importance of an Ethics and Compliance Program
Positive Benefits to Company Performance
Financial
Performance
Employee Morale
and Productivity
Employee Stability
An effective compliance program protects a company’s reputation, ensures
investor value and confidence, reduces uncertainty in business transactions,
and secures a company’s assets.

The Ethics and Compliance Culture Wheel
Company
Commitment to
Trust and
Integrity
Walk the Walk
Actions
Transparency and
Communications
Establish
Standards and
Expectations
Accountability

Ethics and Profitability
• Ethical conduct is profitable
• Reputation is a product of trust and directly influences
public/customer/stakeholder success
• PWC 2014 survey – 50 percent of CEOs believe that
absence of trust creates a real threat to growth
• Reputational value is 26 to 31 percent of company’s
share price
• Employees are the most reliable source on company’s trust
factor

State of Ethics and Compliance
• Single biggest influence on employee conduct?
– Culture
• In strong cultures, wrongdoing is significantly reduced.
• Yet only one in five employees indicate that their company has
such an environment.
– This status remains largely unchanged over the past
decade.
– In 2017, 40% of employees believed that their
company has a weak or weak-leaning ethical culture
– Trend has not substantially changed since 2000
Source: Ethics & Compliance Initiative State of Ethics and Compliance in the Workplace (March 2018)

The Fraud Triangle
Perceived
Pressure
Ability to
Rationalize
Perceived
Opportunity

How Pressure Affects Your Business

Case Example: Wells Fargo
• Perceived Pressure: loss of job with unmet expectations
• Perceived Opportunity: identification of scenario where employees
could reach unrealistic goals under the radar
• Ability to Rationalize: “Management gave me no choice” and only
causing minimal harm on a small scale
Think of other recent headlines and how this applies.

• Risk Assessment
• Internal Controls
• Culture
– Ethical culture is the best control a company can implement
• Code of Conduct (and Training)
• Tone from the Top
• Mission Statement/Statement of Values
• Encouraging Employees to Speak Up
– Need to push new ideas and techniques such as ethics newsletters, ethics
vignettes, contests for ethical employee of the month with rewards
Counteracting Misconduct

Counteracting Misconduct with Culture
• Compared to employees in strong
cultures, employees in weak
cultures are:
• 3x more likely to say they
experienced pressure to
compromise standards
• 3x more likely to say they
observed misconduct
• 41% less likely to report
observed misconduct
• 27% more likely to say they
experienced retaliation after
reporting misconduct

Code of Conduct
• Foundation of a company’s culture
• Defines organization’s values in clear and simple fashion
– Values-based E&C programs substantially more
effective at promoting ethical behavior than those
programs focused principally on processes and rules*
• Prescribes appropriate conduct in plain terms
• Promotes leadership by example
• Reporting mechanisms and ways to seek advice

Code of Conduct: The Numbers
Source: Ethics and Compliance Program Effectiveness Report (2018)

• Importance of form/language appropriate for intended audience
– Live?
– Online?
– Mixed?
– English only?
• Different for employees and 3rd parties?
• How is effectiveness measured?
Training: Form, Content, and Retention

• Consider leveraging online technology
– Scalable
– Consistent messaging/forced learning
– Web-based
– Multiple languages
– Microlearning content
– Trackable/reportable/auditable!
Training Best Practices: General

Training: Communication about Misconduct
● How has senior management communicated to employees?
● When an employee is terminated due to misconduct, what is
communicated to others?
● High-performing programs embrace accountability and
transparency
● Can encourage a culture shift
○ If companies do not take steps to improve culture, conduct
among employees will decline

Training: Availability of Guidance
● What resources are available to guide employees?
• Anonymous help desk?
• Call center: “What is your name?”
• “1-800”? That doesn't work in other countries
● How do you assess what employees know?
• Pre-test?
• Quiz?
• Live discussions?
• Survey?

• Engagement is important!
• Focused on risk topics for company/industry
• Relevant hypothetical scenarios
• Video clips
• Interactivity
• Charming speaker
• Even if in online format
• It does not have to be boring!
Code of Conduct Training: Presentation Ties
to Perception

Poll Question
Would you like to learn more about
EVERFI’s compliance training suite?

EVERFI: Building an Ethical Culture: Conduct Training Best Practice

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