1 Susan Du Becker Cisco Systems BV SCCE European Conference April 2 nd , 2017 A Tale of Two Worlds Ethics & Compliance Ruth Steinholtz – AretéWork LLP Ruth Steinholtz • Ethics, values & culture guru • Recovering Lawyer • Wrote the book on Ethics ambassadors • European, Road cyclist Who Are We ? Susan Du Becker • Lawyer no more • Engineer • Business & Cultural SME • Star Trek Fan !
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Ethics & Compliance · Ethics & Compliance Ruth Steinholtz ... course, controls for the sociopaths. Detailed rules and procedures are necessary to ensure everyone does the right thing,
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Susan Du Becker Cisco Systems BV
SCCE European Conference April 2nd, 2017
A Tale of Two Worlds
Ethics & Compliance
Ruth Steinholtz – AretéWork LLP
Ruth Steinholtz
• Ethics, values & culture guru
• Recovering Lawyer
• Wrote the book on Ethics ambassadors
• European, Road cyclist
Who Are We ?
Susan Du Becker
• Lawyer no more
• Engineer
• Business & Cultural SME
• Star Trek Fan !
2
The Cart without the Horse ?
Policies
Regulatory Input
Industry Standards
Structure
ToolsProcess
Striking the Perfect Balance
Ethics,Attitude, Beliefs,Values,People
The Culture
3
Compliance is an outcomeNot an approach
Ethics is EVERYONES’S responsibility
Getting the balance right
Ethics,Culture &
ValuesCompliance
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Compliance
Exercise:
Where is your department/company on the culture-compliance continuum?
How are decisions made?Does your programme favour rules or principles?
Culture &
Values
Guiding Principles
Perspective 1One way to do it
There is NO one right or wrong way
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Cisco Story - Framework & Methodology
Business Focused – Risk based Framework- scalable, - consistent
Most people want to do the right thing butcontext, situation, cognitive & behavioral factors can lead them astray
Deterrence & threats of punishment work best A strong, positive, ethical culture that minimises ability to rationalise is the best approach. Of course, controls for the sociopaths.
Detailed rules and procedures are necessary to ensure everyone does the right thing, values statements are additional.
Strong ethical values that are truly lived will be more inspirational and effective. Rules are important but are often too complicated.
Punishment is key Just culture and open & transparent communication creates improvement. Blame drives behaviour underground.
Compliance is a cost A strong ethical culture is good for business
We need a large compliance department to ensure compliance.
Ethics is everyone’s responsibility so embed it directly in the business, i.e.. Ethics ambassadors.
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Behavioural ethics (economics + psychology)
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What does this mean for communications?
What is your relationship with the rest of the business, and why does it matter?
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“A culture of collective secrecy existed within the engine development department of Volkswagen”
Where do you start to focus on values and culture ?
• Measure/understand the culture• Pick appropriate core values• Inspire/involve/motivate people• Do not to demotivate them• Start with people who are
creating/influencing the culture• Ethics ambassadors
– Consciously vs. unconsciously
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Regulators are increasingly focusing on culture
So, how can we measure and explain our culture in this context?
Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I =
Individual O = Organizational
Orange = PV, CC & DC Blue = PV & DC (white circle) R =
Relationship S = Societal
1. blame (L) 27 Level 2
2. long hours (L) 24 Level 3
3. profit 23 Level 1
4. bureaucracy (L) 22 Level 3
5. control (L) 21 Level 1
6. cost reduction 20 Level 1
7. productivity 20 Level 3
8. short-term focus (L) 18 Level 1
9. manipulation (L) 15 Level 2
10. continuous improvement 14 Level 4
11. power (L) 14 Level 3
1. customer satisfaction 31 Level 2
2. accountability 26 Level 4
3. continuous improvement 24 Level 4
4. commitment 20 Level 5
5. quality 15 Level 3
6. teamwork 15 Level 4
7. cooperation 14 Level 5
8. employee fulfillment 14 Level 6
9. employee recognition 14 Level 2
10. information sharing 13 Level 4
11. respect 13 Level 2
Values Plot Copyright 2008 Barrett Values Centre August 2008
Compliance & the Enterprise
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Enablement Purpose
- Company identity- Mission Statements- What/Who are you ?
Culture- Purpose shapes your
policies
Strategy- What- How- Where
Goals- What do you want?- How do you want to
get there ?
Portfolio- What are you
selling/doing/buying
Operations- Staff- Mobility- Tools
Metrics- Measure of Success
Culture- Creates the drive towards
your goals
Culture- Creates a clear line of sight from where we are to where
we want to go, together.
Culture- Creates the understanding of the impact of our product
Culture- Drives how we work
together; ethically, emotionally, strategically with
impact
Culture- Continuous alignment with our purpose, goals,
metrics, portfolio and operations
Ethics ambassadors for global reach and input
culture bearersculture bearers
Communicate& trainCommunicate& train
ethical decision-making coach
ethical decision-making coach
listenlisten
provide the local
perspective
provide the local
perspective
be creative& develop material
be creative& develop material
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Culture
Walking the Talk ?Empowerment – are you ?Communications – The 360 ViewTone from the Top – support from the middle Polling – does the company hear, listen and understand the employees ?Are you focused on the right priorities - learning and education ?
Entropy reduced or stayed the same every year. Entropy reduction led to improved performance through increased employee engagement—increased revenues, productivity, share price, etc.
Working toward entropy of 10% will result in healthy functioning of the organisation and improved staff morale.
25%
19%17%
14% 13% 13%11% 10%
0%
5%
10%
15%
20%
25%
30%
2005 2006 2007 2008 2009 2010 2011 2012
Cutlural Entropy
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Wrap Up
What have we learned
“Culture is vital to overall strategy and performance”
Source: EY Culture and Boards at a glance 2016. Survey of 100 board members of FTSE 350 companies.
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Compliance
Any Change to your view?:
Where is your department/company on the culture-compliance continuum?
How are decisions made?Does your programme favour rules or principles?