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Top 10 Ethics and Compliance Trends 2016

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This popular annual webinar to hear about the challenges you may face in the upcoming year—and get the tools and tactics you need to stay ahead of the curve.

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Top 10 Ethics and Compliance Trends 2016

  1. 1. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Top Ten Ethics & Compliance Predictions and Recommendations for 2016 January 12, 2015
  2. 2. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com P R E S E N T E D B Y Vice President, Advisory Services NAVEX Global Ed Petry, Ph.D. Vice President, Advisory Services NAVEX Global Andrew Foose, J.D.
  3. 3. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Agenda • Introductions & Overview • Predictions & Recommendations 1. Addressing The Millennial Mindset 2. E&C Goes Global 3. Maturing Board Oversight Expectations 4. Politics Invades the Workplace 5. Increasing Prominence of Sports Scandals 6. Forging New Alliances With HR 7. New Whistleblower Initiatives 8. Anti-Bribery, Corruption and Third-Party Risk Management 9. Addressing Cynicism Head On 10. Expanding the Scope of E&C • Q&A
  4. 4. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com T R E N D # 1 The Rise of the Millennial Mindset
  5. 5. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com • Millennials—born between 1975 and 1995—will comprise 75% of workforce by 2025 • Highly influential—others are adopting a “millennial state of mind” • Some of the changes that can be traced to the millennial mindset include: • Increasing skepticism that business will do the right thing when faced with a tough decision • Far more emphasis on the importance of an organization’s social responsibility and environmental impact • Changed expectations about how we learn and acquire information Visit the Pew Research Center online and take their “How Millennial Are You?” quiz Keeping Pace With a Changing Workforce
  6. 6. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 1. Plan for change. Start innovating now 2. Assess learning styles for your organization. Adapt to employee’s preferred learning methods— including interactive online codes, training and policies 3. Don’t jump to conclusions. Studies with findings that suggest millennials are more likely to cross ethical lines can be misleading. 4. Expect to be surprised. Millennials often have a preference for face-to-face communications. Key Steps For Organizations To Take
  7. 7. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com T R E N D # 2 Transitioning to a More Global Center of Gravity for Ethics and Compliance
  8. 8. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com U.S. No Longer Center of E&C Momentum • Until E&C scandals began to implicate non-U.S. headquartered companies, E&C momentum was largely based in the U.S. • Regulatory initiatives and best practices are now less likely to come from the U.S. • U.K. Modern Slavery Act 2015 • ISO 19600 • European Court of Justice’s Safe Harbor judgment • U.K. Anti-Corruption Plan • Russian Federal Act on Data Protection • These developments have broad application and often are replicated in other jurisdictions
  9. 9. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 1. Get help to stay informed. Enlist the help of local legal liaisons to keep you up-to-date 2. Identify your organization’s obligations. Understand which provisions apply to you. 3. Keep key decision makers up-to-date. Prioritize developments that impact your organization 4. Keep an open mind. Work to overcome any “not created here” biases that may exist in your organization. 5. Develop targeted communications and training. Help those directly impacted by new regulations understand the implications. Key Steps For Organizations To Take
  10. 10. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com T R E N D # 3 Board Expectations for Ethics & Compliance Oversight Get More Specific, Uniform and Comprehensive
  11. 11. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com April, 2015—U.S. Department of Health & Human Services, Office of Inspector General (OIG) released comprehensive set of guidelines: Practical Guidance for Health Care Governing Boards on Compliance Oversight Guidance part of a broader trend to hold E&C programs—and boards—to more uniform standards New Frameworks for Board Oversight
  12. 12. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Boards Will Be Expected to Know More & Do More • April, 2015—U.S. Department of Health & Human Services, Office of Inspector General (OIG) released comprehensive set of guidelines: Practical Guidance for Health Care Governing Boards on Compliance Oversight • Guidance part of a broader trend to hold E&C programs—and boards— to more uniform standards • Boards need to take very specific and proactive roles relative to their compliance oversight duties • Boards need to gain a better understanding of the adequacy and effectiveness of their organization’s E&C programs, set the right expectations and ask the right questions
  13. 13. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 1. Jump-start your board’s engagement.  To meet their obligations, boards need to gain a better understanding of the adequacy and effectiveness of their organization’s E&C programs, set the right expectations and ask the right questions  Provide questions to your board and/or senior leadership to help them think through their roles and responsibilities related to the E&C program • For a list of questions you can use, see our blog article “Real Guidance (Finally) On the Compliance Oversight Role of Boards”  Help your board take very specific and proactive roles relative to their compliance oversight duties Key Steps For Organizations To Take
  14. 14. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 2. Reassess your current board training  Find an approach that addresses unique board-related risk areas  Add a discussion of E&C risk areas that pertain specifically to board members  Help board members understand how to interpret E&C data  Develop a plan for how to “credit” board members for training they receive and encourage them to share best practices from other organizations  Utilize specific expertise of board members and involve them in creating or facilitating board training Key Steps For Organizations To Take
  15. 15. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 3. Make the most of the space allotted in the report to the board  Don’t assume too much  Provide information on aspects of your E&C program beyond the helpline  “Don’t” data dump  “Do” use data to support the “why” and “how” of your overall effectiveness Key Steps For Organizations To Take
  16. 16. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com T R E N D # 4 Politics Invades the Workplace
  17. 17. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com US’s 2016 election dominating news, social media and many employee conversations Creates a unique set of compliance problems:  Campaign financing  Quid pro quo deals  Misuse of company resources  Inevitable clash of political views can lead to policy violations and discriminatory behavior 2016 Election Will Dominate Many Employee Conversations
  18. 18. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 1. Review your code of conduct and policies. Make sure they’re clear and up-to-date about political contributions, political activity, and campaign financing. 2. Keep an eye on transparency initiatives. Look out for shareholder resolutions expanding political spending disclosures. 3. Over-communicate. Be clear about limits on using company resources for political activities. 4. Reinforce role-specific policies. This is particularly important with senior executives. 5. Be prepared to make hard decisions. Political issues and decisions are charged issues that can be very difficult to handle. Be ready. 6. Know when to say when. Guard against political discussions in the workplace that become derogatory and offensive. Key Steps For Organizations To Take
  19. 19. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com T R E N D # 5 The Wide World of Sports Scandals and How They Impact Our E&C Discussions
  20. 20. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Cause for public discussions of ethics More attention has been given to behavior off the field  Bribery and corruption  Performance enhancing drugs  Personal transgressions and accountability  Violence, racism and drug use  Athlete safety and exploitation Sports Scandals Provide Opportunity for More E&C Conversations
  21. 21. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 1. In your E&C training and case studies, consider replacing Ken Lay (Enron) with Sepp Blatter (FIFA)  Employees more likely to connect and engage  Sports-related case studies bring home importance of culture–and highlight areas of dysfunction 2. Don’t plan any major U.S. initiatives for the second half of March or any meetings June 14-July 15, 2018  Americans spend nearly 700 million hours watching the college basketball championship games  Resulting in annual losses of $1.9 billion due to distracted and unproductive workers Key Steps For Organizations To Take
  22. 22. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com T R E N D # 6 Working With HR—Time to Try Again
  23. 23. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Better Alignment With E&C and HR Has Positive Ripple Effect • No corporate function has more opportunity to contact employees as often as HR  Recruiting, hiring, on-boarding, performance reviews, promotions, investigations, discipline, reorganizations, terminations and exit interviews  HR is often the primary channel for reporting E&C concerns • 24 years ago, U.S. Sentencing Guidelines for Organizations emphasized importance of the HR function in creating and maintaining an effective compliance program
  24. 24. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Coordination between HR and E&C is often strained by  Duplication of efforts  Inefficiencies  Fear that confidential employee information will not remain confidential  Turf battles Everyone Wins When HR & Compliance Work Well Together
  25. 25. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 1. First things first: bury the hatchet 2. Build (or re-build) trust 3. Recruiting and onboarding 4. Get on the same page with communications and training 5. Track all the channels used by your employees for reporting 6. Work with HR to incorporate E&C standards into performance management processes 7. Ensure consistent discipline 8. Get over it; no more turf battles Key Steps For Organizations To Take
  26. 26. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com T R E N D # 7 Renewed Focus On Boosting Whistleblower Rights and Squashing Retaliation
  27. 27. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Two legal developments that bear watching  U.S. Occupational Safety and Health Administration (OSHA) drafted guidelines to help organizations design programs to protect whistleblower rights • Implement a retaliation response system • Conduct anti-retaliation compliance training • Monitor and audit  Berman v. Neo@Ogilvy LLC: Interpretation of “whistleblower” Legal Developments Shine Spotlight on Whistleblowing & Retaliation
  28. 28. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 1. Review and comment on the new OSHA guidelines 2. Implement a publicized retaliation response system, including a helpline/hotline and independent assessment of claims of retaliation 3. Develop anti-retaliation training Key Steps For Organizations To Take
  29. 29. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com T R E N D # 8 Getting Serious About Anti-Bribery and Corruption Efforts and Third-Party Risk Management
  30. 30. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Increase in respondents highly challenged by the issue of ABC Management of third parties poses the greatest challenge More than one-third of respondents do not formally identify high-risk third parties ABC considerations too low a priority by companies preparing to acquire, or merge with, other corporations across borders Lack of resources to manage ABC risk ABC risk assessment is one of their companies’ top challenges Third Party Risk Still a Blind Spot Source: KPMG Anti-Bribery and Corruption Survey 2015
  31. 31. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 1. Conduct a robust corporate risk assessment 2. Identify and address your company’s third-party risks  Scrutiny should increase as “red flags” surface  Understand business rationale for engaging with a third party  Ongoing monitoring of third party relationships 3. Review your ABC mitigation plan for completeness 4. Create or update written policies and procedures to address these risks—particularly the highest risks 5. Train third parties on your organization’s policies 6. Devise a plan to implement changes in demonstrable, documented stages Key Steps For Organizations To Take
  32. 32. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com T R E N D # 9 Cynicism, Fatigue and Compliance Pushback—A Problem We Can No Longer Ignore
  33. 33. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Employee Disengagement Creates Major Risk • 37% of respondents thought employee cynicism was the top threat to the effectiveness of their E&C training programs • Look for the signs (if you haven’t seen them already):  The silent elevator, eye-roll, snicker or harrumph • Just as likely for leaders to lack engagement and just be going through the motions • Compliance pushback most often seen with training and communications • Lack of engagement/alignment can impact helpline usage • Left unchecked, this can erode even your best efforts
  34. 34. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 1. Don’t assume “it can’t happen here” 2. Focus on leadership at all levels 3. Start with the most egregious sources that fuel cynicism and compliance pushback: Insincerity, wasting employees’ time, inconsistency, lack of transparency 4. Re-position E&C office as a strategic ally, not just the people who say no 5. Pay attention to public sentiment and how it impacts your employees Key Steps For Organizations To Take
  35. 35. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com T R E N D # 1 0 Expanding the Scope of E&C: Is This the Year for Pushing Boundaries and Increasing Authority?
  36. 36. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Is the scope of our E&C programs too narrowly focused? High-profile areas with clear E&C components are often over-looked as not “part of the job”  Cyber security, sustainability, marketing, advertising, philanthropy, human rights, community engagement Long term goal, but look for short term opportunities Thinking Outside the E&C Box
  37. 37. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com 1. Ask questions about who owns key risk areas. Confirm that E&C issues related to each risk area are being addressed 2. Find common ground. Corporate social responsibility, human rights, sustainability: it’s in everyone’s interest to make sure E&C issues related to these areas are identified and addressed 3. Pay attention to advertising, marketing and your values. Watch for disconnects between your core values and your marketing campaigns Key Steps For Organizations To Take
  38. 38. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Conclusion
  39. 39. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com • The opportunity for E&C to influence the decisions of the organization are greater than ever before. As ethics and compliance professionals, we need to be ready to take on that responsibility. • Position the E&C office strategically. Look for opportunities to broaden your influence. Find more, different and better ways to work with HR. • Change your approach from addressing the needs of “millennials” to managing the “millennial mindset.” • Don’t ignore the all-pervasive influence of sports, politics and other priorities of the public that influence perceptions about ethics. • Cast a broad net for best practices and regulatory trends. We can’t afford to be parochial. • Make third-parties and due diligence a priority. • Identify and address the root causes of cynicism and compliance fatigue. Key Takeaways & Ideas to Consider Implementing in 2016
  40. 40. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com I’d Like to Talk with a NAVEX Global Solutions Expert About… [check all that apply]  Reviewing whether or not my program measures up to regulatory requirements  Creating a training plan that covers all my risks and audiences  Making sure my investigations are legal and effective  Automating manual processes in my program (policies, incident management, third party due diligence, etc.)  Getting deeper analytics on my organization’s hotline data  I have a different challenge I’d like to discuss with an expert
  41. 41. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Thank You For Submitting! If we run out of time to address all of your questions, we will follow up with you after the webcast.
  42. 42. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Have a Great 2016! Ed Petry, Ph.D. Vice President, Advisory Services epetry@navexglobal.com Andrew Foose, J.D. Vice President, Advisory Services afoose@navexglobal.com
  43. 43. © 2016 NAVEX Global, Inc. All Rights Reserved. www.navexglobal.com Subscribe to Ethics & Compliance MattersTM

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