July 9, 2010 Corporate Culture Index™ Overview DISCLOSURE: Michael Brozzetti is CEO & President of Boundless LLC, an internal audit and risk advisory firm and is Chairman of the Business Integrity Alliance™ which is a joint venture between zEthics, Inc. and Boundless LLC. Michael Brozzetti is a Certified Internal Auditor® in good standing with the Institute of Internal Auditors and certifies his accountability to the principles within the Institute of Internal Auditor ‘s Code of Ethics. Michael is a CIA Learning System training partner with the Institute of Internal Auditors, Villanova University, and the Holmes Corporation. Michael Brozzetti is currently under consideration for the zEthics, Inc. Board of Directors.
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July 9, 2010
Corporate Culture Index™ Overview
DISCLOSURE: Michael Brozzetti is CEO & President of Boundless LLC, an internal audit and risk advisory firm and is Chairman of the
Business Integrity Alliance™ which is a joint venture between zEthics, Inc. and Boundless LLC. Michael Brozzetti is a Certified Internal
Auditor® in good standing with the Institute of Internal Auditors and certifies his accountability to the principles within the Institute of
Internal Auditor ‘s Code of Ethics. Michael is a CIA Learning System training partner with the Institute of Internal Auditors, Villanova
University, and the Holmes Corporation. Michael Brozzetti is currently under consideration for the zEthics, Inc. Board of Directors.
Corporate Culture Index™ (CCI)Introduction
What is zEthics.com and the CCI™? an online 3rd party information service that
brings dynamic dashboard information into the hands of the Board, Management, and
Internal Audit - empowering them with the intelligence to identify and respond to the
people risk and safety on the horizon.
People
Ethics
& Values
Corporate Culture
Excellence
Process
Governance, Risk, and
Compliance
Enterprise Risk
Management
Technology
Quality of risk and control information
Enabler of “real-time” communication of risk
and control information
Business Integrity Hierarchy ™
The zEthics.com and the CCI™ solution enables companies to validate the layer of business
integrity most important to achieve and sustain organizational success – its People
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Corporate Culture Index™ (CCI)Introduction
The Corporate Culture Index™ provides new insight into strategy,
operations, risk and control management
Measure and monitor success through organizational
change events triggered by:
New company goals, strategies, and objectives
Management and Personnel changes
Organizational Restructuring
Charter and Policy changes
Mergers & Acquisitions
IT Implementations
External Factors
Challenges assumptions and gains positive
assurance over ethical behavior
and the “soft controls.”
Ethics
Governance
Risk Management
Compliance
Internal Control
Communication & Trust
Corporate Culture Index™
When the “top” and “bottom” are not in sync are the
middle activities really effective?
*** Proprietary Information ***3
Data Structure & Reporting
The Corporate Culture Index™ is yielded from the zEthics.com information service that administers and manages employee surveys and data for management reporting.
There are eight (8) key reporting categories rated on a 10-point scale, which cover the following cultural dimensions: Ethics & Governance
Risk Management
Strategic Planning
Management
Communication
Organization
Empowerment
Compliance (Audit & Quality)
1 2 3 4 5 6 7 8 9 10
Poor Excellent
Corporate Culture Index ™ 10-point scale
*** Proprietary Information ***4
Data Structure & Reporting..cont’d
Data structures mirror organizational hierarchy at the Company level, Business Unit level, and Management level within four (4) personnel responsibility levels:
Board Fiduciaries
Officer Fiduciaries
Non-Officer Fiduciaries
Key Functional Management (non-fiduciaries)
Ethics Action Reporting - Interactive communication for supporting complaint documentation and case management
Suggestion Reporting – Identify and initiate improvement ideas that drive business returns
*** Proprietary Information ***5
Example CCI™ DashboardBusiness Unit & Executive Survey
BU #3 Executive Survey CEO CFO COO VP HR CIO
Ethics & Governance 8.6 8.2 2.1 1.6 5.8
Risk Management 8.0 7.2 3.1 3.0 5.8Strategic Planning 7.4 7.6 3.6 3.4 5.2Management 7.6 7.8 1.4 1.8 5.4Communication 5.4 6.0 1.1 1.0 4.8Organization 6.2 7.8 1.8 2.0 5.8Empowerment 7.2 7.6 2.5 2.0 5.4Compliance (Audit & Quality) 8.0 4.8 2.3 2.0 6.6
CCI™ Composite Rating 7.3 7.1 2.3 2.1 5.6
Business Unit Survey Business Unit 1 Business Unit 2 Business Unit 3 Business Unit 4 Business Unit 5
Ethics & Governance 4.6 4.7 2.4 5.3 4.3
Risk Management 4.3 4.9 1.0 5.3 3.9
Strategic Planning 3.7 4.0 2.8 5.0 3.9
Management 3.6 4.1 1.3 4.9 3.5
Communication 5.0 5.6 4.3 5.9 5.2
Organization 4.0 4.8 2.5 5.1 4.1
Empowerment 4.5 4.9 2.8 5.6 4.5
Compliance (Audit & Quality) 5.2 5.4 3.8 5.6 5.0
CCI™ Composite Rating 4.4 4.8 2.6 5.3 4.3
This is fictitious data for illustrative purposes only
Drill down and gain dynamic views into the organizational
corporate culture for internal benchmarking
*** Proprietary Information ***6
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Example CCI™ DashboardCultural Trend Analysis
0
1
2
3
4
5
6
7
8
9
10
PY Q2 PY Q3 PY Q4 CY Q1 CY Q2
Business Unit #3 Company
Note: Chart is for illustrative purposes only. PY = Prior Year and CY = Current Year trending.
Corporate Benefits
Quickly identify high risk areas of the business, including non-compliance,
weaknesses, mismanagement, fraud, and corruption
Quantify how company goals, strategies, and objectives affect management
philosophy and operating style
Plan for and manage the risks associated with organizational change events
Support strategic decisions that affect organizational changes and
restructuring of authority and responsibility
Transparency, accountability, and integrity that support the risk oversight duties of care, loyalty, and prudence
Demonstrate risk oversight and responsible corporate citizenship by disclosing risk information and cultural trends in the proxy.
Ensure that D&O liability coverage exclusions are not invoked (i.e. for fraud, negligence, non-compliance, etc.)
*** Proprietary Information ***8
Internal Audit Benefits
Empower Internal Audit with a source of risk intelligence that;
Support dynamic audit planning
Utilize resources more effectively
Reduce audit cycle times; and
Improves governance, internal control, and risk management
Test, measure, and monitor the effectiveness of the Tone at the Top
and the corporate culture on a relative scale
Become a catalyst for corporate culture excellence by fostering
honesty, loyalty, mutual trust and respect
Support Internal Audit opinions and compliance with Institute of
Internal Auditors (IIA) Standards
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Business Integrity Alliance Founders
Michael Brozzetti, CIA®, CISA®, and CGEIT®
President of Boundless LLC
Internal audit Quality, Training, Education and Support
Ethics, Governance, ERM speaker and workshop leader
Qualified IIA Instructor
Chairman of Business Integrity Alliance™
Chairman of the Chief Audit Executive Roundtable
Adjunct Instructor with Villanova University
Mark Rome
Founder of zEthics, Inc
Co-Founder of Business Integrity Alliance™
Member NACD, IIA and IMA
Media and Publications Rome, Mark (2010), How CFO's can evolve the Corporate Culture to drive Business Returns, CFO.com
Rome, Mark (2010), Using Analytics to Restore Public Trust, Taylor & Francis
Brozzetti, Michael (2009). A New Era for Internal Auditors. IIA Insight.
Brozzetti, Michael (2010). Internal Auditing and Fraud Interview (2010). Comcast MoneyMattersTV
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Strategic PartnershipsCase Study Highlights
Villanova University
Instrumental to the 2008 inception of the IIA/Villanova CIA Learning System university partnership program.
Supported marketing and growth of the program increasing registration by over 150% from its inception.
Over 85% of students rated instructor overall performance as exceptionally good during 2010 program.
Holmes Corporation
Successful collaboration and delivery of corporate on-site CIA training programs
Over 100 course seats served
IIA Philadelphia Chapter
Founder and Chairman of the 2010 CAE Roundtable that attracted over 50 participants in 2 sessions
100% of CAE participants rated Chairman performance as exceptionally good (35%) or above average (65%)
95% of CAE participants rated overall value of roundtable as exceptionally good (15%) or above average (80%)
Business Integrity Alliance™ Joint Venture Co-Founder and Chairman of the Business Integrity Alliance™ a joint venture with zEthics, Inc. committed to
advocating corporate governance excellence and supporting corporate governance market initiatives
Awarded as one of only 11 consulting firms to participate in the California Public Employee Retirement System (CalPERS) Corporate Governance Research Spring-Fed pool over the next 3-5 years to support market place.
Aline
Collaborative partnership to support the application of governance, risk, and performance methods to improve organizational accountability, transparency, and integrity.
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Contact Information
Contact Information
Michael Brozzetti
CEO, Boundless
3513 Bowman Street
Philadelphia, PA 19129
(215) 687-7376
Contact Information
Mark Rome
CEO, zEthics, Inc.
980 9th St., 16 Floor
Sacramento, CA 95814
(602) 358-9586
http://www.zethics.com
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