LRN’s annual Ethics & Compliance Leadership Survey Report presents detailed benchmarking findings and specific recommendations, based on an extensive survey of more than 150 ethics & compliance leaders from across industries and geographies.

1. All-Partner Community Update
February 23, 2012
Confidential
Confidential

2. Findings from the 2011-
2012 Ethics & Compliance
Survey Report
Mark Helmkamp
Knowledge and Solutions Leader
Confidential
Confidential

3. Preview of the Results
Today we will focus on:
 Insight into projected 2012 E&C budget and staffing levels
 Use of relevant E&C metrics
 An understanding of the top E&C priorities, challenges and the most
critical risks for 2012
 Relevant trends in E&C education and communications
Key deliverables in March (middle/end):
 Final report with responses from more than 150 E&C leaders
 Webinar with two former CECOs to discuss the results and
implications
 Detailed industry benchmarking reports on our Ethics & Compliance
Alliance
© 2011 LRN®
LRN Proprietary and Confidential. Not for Redistribution.

4. 1. A Growing Number of Companies
Project an Increase in E&C Budgets
Q: For next year, your projected E&C function's annual budget will:
KEY INSIGHTS 6%
5%
 42% of E&C leaders
project their budgets will
increase this year, a 7% Increase
increase compared to
42% Remain
last year. 53% Unchanged
 22% of E&C leaders Decrease
expect that their budgets
will increase by a margin
of 2% to 5% in 2012. N = 172
 Education and 6%
communications remains Q: Not including salaries and benefits, how do you plan to allocate your E&C function’s annual
the biggest budget line budget next year? Please indicate estimated percentages for each budget item (adding up to
100 percent):
item for 2012, followed 35% 35%
Education and Communications 43% 27 %
by Administration then 14 %
Administration
Consultants. Consultants
51% 55%
9%
Technology 8%
Investigations 10% 8%
Travel and Entertainment 7%
N =172
Risk Management 6%
Other 5% © 2011 LRN®
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5. 2. Staffing Levels are Projected
to Remain Unchanged
Q: What changes do you project in your E&C staff size next year?
KEY INSIGHTS
75
E&C staffing levels are N = 170
69%
projected to remain largely 69%
unchanged for 60
2012, continuing the 2011
trend.
45
ADDITIONAL FACTS
 18% of participating
companies have only one 30
dedicated E&C employee
 55% of participating
15
companies have two to 15%
nine E&C employees 9%
 27% of participating 2% 2%
1% 1%
0
companies have 10 or
Incr. by 1 Incr. by 2-5 Incr. by 6-9 Incr. by 10+ Remain Decr. by 2-5 Decr. by 6-9
more E&C employees employee employees employees employees unchanged employees employee
© 2011 LRN®
LRN Proprietary and Confidential. Not for Redistribution.

6. 3. Reporting to the General Counsel
is Most Prevalent
Q: To whom does the E&C function directly report to?
KEY INSIGHTS
 Not surprisingly, the General Counsel / Law 57%
majority of all E&C
functions continue to CEO 15%
report directly to the Audit Committee of 12%
General the Board of Directors
Counsel, followed by a Other C-Suite 5%
Executives
direct line to the Chief
Executive Officer. Other 4%
 This is also reflected in
the importance of Human Resources 2%
functional relationships
Finance 2%
for E&C programs. E&C
leaders indicate that Other Board of
Directors committees
1%
General Counsel / Law
(96%) is of critical Risk 1%
importance for their E&C
N =162
program Internal Audit 1%
effectiveness, followed
by the CEO (92%), Audit 0 15 30 45 60
(89%) and Board of
© 2011 LRN®
Directors (87%). LRN Proprietary and Confidential. Not for Redistribution.

7. 4. Conflicts of Interest is the Most
Critical Ethics & Compliance Risk
Q: Please indicate your company’s most critical E&C risks.
KEY INSIGHTS
67% of E&C leaders indicate 75
that Conflicts of Interest is the 67%
most critical compliance risk 65% 65%
63% 62%
area, followed closely by 60
Bribery & Corruption and 55%
Gifts & Entertainment. 49% 48% 48% 47%
45
ADDITIONAL FACTS
Most risk areas E&C leaders
specified as critical in this year’s 30
E&C survey are consistent with
last year’s findings. One notable
shift is the increased focus on
Gifts & Entertainment with a 46% 15
to 67% jump. The top five E&C
risks from 2011 were:
 Conflict of Interest (72%)
0
 Data Privacy (64%)
 Electronic Data Protection
(60%)
 Environment, Health and N = 131
Safety (51%) Aggregate Percentage : (5) = High Priority & (4) Moderate-high Priority
 Bribery & Corruption (50%) Scale: 5 = High Priority, 1= Very Low Priority
© 2011 LRN®
LRN Proprietary and Confidential. Not for Redistribution.

8. 5. Helpline and Investigations Data is
the Top Metric Reported to the BoD
Q: What ethics and compliance metrics do you report to the Board of Directors?
KEY INSIGHTS Helpline and investigations
Data and Trends 85%
While E&C leaders almost
Code of Conduct
always report tactical data Violations 78%
on helpline trends and
Education Completion
Code violations, they rarely Rates and Certification 70%
discuss the year-over-year Relevant Regulatory
Developments 70%
effectiveness of the E&C
program with the Board of Results of Compliance
65%
Audits
Directors.
Key Risk Assessment and
Mitigation Plans 63%
ADDITIONAL FACTS Ethics and Compliance-
53%
 49% of participants updated Related Dismissals
their Board on the E&C Ethical Culture
Survey Results 46%
program quarterly, followed
Year-Over-Year Trends on
by 22% annually and 12% the Effectiveness of the E&C 43%
bi-annually.
We don’t report metrics to
 Only 11% of participants the Board of Directors 6%
update their Board more
than four times a year. Other 1% N = 141
0 15 30 45 60 75 90
© 2011 LRN®
LRN Proprietary and Confidential. Not for Redistribution.

9. 6. Promoting an Ethical Culture a
Key 2012 Priority
Q: How important are the following E&C program goals to your company in 2012?
KEY INSIGHTS Increase Employee Comfort With
Speaking Up 73%
The three biggest 2012
priorities for E&C leaders Strengthen Ethical Leadership 68%
center on promoting an
ethical culture. Increasing Strengthen the Ethical Culture 66%
employee comfort with
speaking up on alleged Adapt Ethics and Compliance Program
64%
to Changing Business Needs
misconduct is a top goal, not
surprisingly in the aftermath Promote Alignment Between Core Values
and Day-to-day Operations 62%
of Dodd-Frank.
Build a More Consistent
Global E&C Program 61%
ADDITIONAL FACTS
Manage Shifting Regulatory
The 2012 priority focus on promoting Expectations 61%
an ethical culture suggests a longer
Innovate Design and Delivery of E&C
term trend in which ethics and Education 57%
compliance programs are moving
Build a Stronger Case for Ethics and
away from traditional control and Compliance as an Enabler of Business 49%
risk management activities. Last Performance
year’s key priorities also focused
Drive E&C functional efficiency 48% N = 144
on culture:
1. Promote Alignment Between
Core Values and Day-to-day 0 15 30 45 60 75
Operations Aggregate Percentage : (5) = Very Important & (4) Important
Scale: 5 = Very Important, 1= Not Important
2. Increase Employee Comfort
© 2011 LRN®
With Speaking Up LRN Proprietary and Confidential. Not for Redistribution.

10. 7. E&C Programs Not Seen as Very
Effective in Providing Business Support
Q: How do you perceive the effectiveness of the E&C program in the following areas?
KEY INSIGHTS
E&C leaders perceive that
their program is most Corporate Conscience
(e.g., promoting an ethical
effective in traditional areas culture through education 66%
71%
and addressing employee
of promoting culture and concerns)
managing risks. Yet, they
struggle to align their
program with business Overseer
(e.g., focusing on
goals. controls, risk management 67%
64%
and investigations)
ADDITIONAL FACTS
While 25% of E&C leaders Business Enabler
assess their program on a (e.g., providing
advice/counsel, enabling 58%
58%
need basis (e.g., because of better decision making)
new regulatory
requirements), 44% evaluate
their program annually and 0 15 30 45 60 75
14% do it every other year.
Aggregate Percentage : (5) = High Effectiveness & (4) High-moderate Effectiveness N = 156
Scale: 5 = High Priority, 1= Low Effectiveness
© 2011 LRN®
LRN Proprietary and Confidential. Not for Redistribution.

11. 8. Organizational Complexity is the Largest
Barrier to Promoting an Ethical Culture
Q: What are the biggest obstacles to building a strong ethical culture in your company?
KEY INSIGHTS 75
69% N = 131
 Organizational
complexity
60
(i.e., dispersed
operations) is the most
significant obstacle to
45
building a strong ethical 40%
culture. 36%
ADDITIONAL FACTS 30
26%
The most critical obstacles 21%
reported in 2011 were:
 Organizational complexity 15
(58%) 8% 8% 7%
5%
 Lack of appreciation of
culture as a business driver 0
(34%)
 Lack of support by middle
management (34%)
© 2011 LRN®
LRN Proprietary and Confidential. Not for Redistribution.

12. 9. A Minority of E&C Leaders Believe
That Education Has a High Impact
Q: What impact does your current E&C education have on employee behavior and
decision-making?
KEY INSIGHTS
Only 6% of E&C leaders 50
believe that their education N = 129
has a high impact on
employee behavior and
decision-making. 40%
38%
25
12%
3% 6%
0
Low Low-Moderate Moderate Moderate-High High
Impact Impact Impact Impact Impact
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LRN Proprietary and Confidential. Not for Redistribution.

13. 10. Lack of Relevance to Work is the
Biggest Educational Challenge
Q: What are the biggest challenges you face when providing E&C education?
KEY INSIGHTS 75
E&C leaders continue to N = 130
struggle with making
59%
education applicable to 60
daily work and online
49%
education fatigue, similar
to last year’s challenges: 45
Online Education Fatigue (59%) 34%
32%
Relevance of Education to Day- 30
27%
to-Day Work (49%)
Technology Constraints (34%) 15%
15
12%
Cultural Differences in 9%
Global Locations (32%) 7%
Limited Financial Resources 0
(27%)
© 2011 LRN®
LRN Proprietary and Confidential. Not for Redistribution.

14. 11. The Intranet is Top Channel to Raise
Awareness about E&C Programs
Q: Which communications channels do you use to raise awareness and reinforce
your E&C program? Please select all that apply:
KEY INSIGHTS
Intranet 87%
The Intranet continues to
be the top channel to raise
E-mail campaigns
awareness and reinforce 77%
E&C programs, followed by: Print materials (e.g., quick
 E-mail campaigns (77%) reference
guides, brochures)
60%
 Print materials (60%)
Newsletters 52%
 Newsletters (52%)
 Team meetings (46%) Team meetings 46%
ADDITIONAL FACTS Award or recognition programs 24%
In 2011, 84% of participants
used the Intranet as a channel Web-enabled Interactive Code 22%
to raise awareness and
reinforce their E&C Social media 6%
programs, followed by:
 E-mail campaigns (72%)
Other 5% N = 131
 Posters (62%)
 Newsletters (50%) 0 15 30 45 60 75 90
 Team meetings (38%)
© 2011 LRN®
LRN Proprietary and Confidential. Not for Redistribution.