Anatomy of aBody of Ethics

Compliance and Requirements

Ethics is part of Compliance and Compliance is Part of ERM

The Heart of Ethics and Compliance

Creating a “living” culture of ethical compliance in which doing the right thing, the right way, all the time, everywhere, is the norm and in which we take tests to monitor our ethics health.

Essential Parts of A Body of Ethics and Compliance

Head (Executive Leadership)

Brain, Heart, and Lungs (The sustaining mechanisms, confidential disclosure; non-retaliation)

Muscles and Blood (education and training)

Skeletal Structure (the regulatory, compliance, monitoring and auditing components; prevention and detection; policies, procedures, practices)

Feet (“Management by Walking Around”)

“Living” Means Different Things In Different Contexts

"Look! It's moving. It's alive. It's alive... It's alive, it's moving, it's alive, it's alive, it's alive, it's alive, IT'S ALIVE!"Dr. Henry Frankenstein, Frankenstein (1931)

  

Ethics and Compliance:The Story of Four People

• This is the story of four people. Everybody, Somebody, Anybody, and Nobody. There was an important job to be done and Everybody was sure that Somebody would do it. Anybody could have done it but Nobody did it. Somebody got angry because it was Everybody's job. Everybody thought that Somebody would do it. But Nobody asked Anybody. It ended up that the job wasn't done and Everybody blamed Somebody, when actually Nobody asked Anybody.

Leadership In Ethics Compliance

• “Leadership begins when you decide to shape your environment rather than letting it shape you.”—Earl G. Graves, Sr., Black Enterprise, August, 2010.

• “To Lead Is To Measurably Help Others To Succeed”

• “Managing winds up being the allocation of resources against tasks. Leadership focuses on people. My Definition of a leader is someone who helps people succeed.”

• “You must be the change you wish to see in the world.”--Gandhi

The Rules of Business: 55 Essential Ideas to Help Smart People and Organizations Perform At Their Best , at 1 and Tom Peters, The Little BIG Things: 163 Ways To Pursue Excellence, at 146.

Eight Characteristics Of A “Living” Ethics and Compliance Program

• Is part of the institutional culture of values based integrity.• Is celebrated by examples.• Is interactively engaging, enlightening, educational, edifying,

enjoyable, and empowering.• Is enforced, is marked by transparency and disclosure.,

and is grounded in what is right, fair, and good.• Is thoroughly documented• Is visible (e.g. on websites, annual reports, etc.) and

celebrated.• Principles are promoted, Goals are S.M.A.R.T, roles are clear,

expectations are set, and there is both responsibility and accountability.

• Leading and lagging metrics are identified, monitored, and preventive action is taken. New measures, such as converting percentage of ethics and compliance DNKs to NIKs, are considered.

Organizational Culture And Ethics

Charles Harrington, Chairman and CEO, Parsons

“A major league baseball team is playing its last regular season game of the year: win this game and they advance to the play-offs; lose, and they watch the play-offs on TV. In the bottom of the 9th, one of its star players steps to the plate, the score tied, a man on first, no outs. The right thing for him to do is to lay down a sacrifice bunt to move the runner into scoring position. This player happens to have an incentive clause in his contract, however, that would be triggered if he gets one more hit for the season, and that incentive clause would bring him a big bonus and a contract extension. The player lays down the sacrifice bunt, and his team goes on to win the game and advance to the post season. After the game, a reporter who was aware of what was at stake for that star player in his last at-bat asked the team’s manager how he convinced the player “to do what was right.” The manager replied, “We try to create an atmosphere here where the question doesn’t even arise.”

Two Truths Common to Sports, Medicine, Ethics and Compliance

• If you monitor and measure what’s important, you can manage improvement.

• “You can observe a lot just by watching.”

—Yogi Berra, former New York Yankees catcher and sage

• .

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Some Characteristics of A “Dead” Ethics and Compliance Program

• It is not visible.• Principles are not promoted.• Goals are not S.M.A.R.T.• Roles are unclear.• Expectations are set and communicated.• There is no responsibility.• There is no accountability.• It is perceived as being “impossible” to live

with.• It is perceived as being impossible to manage.

Some Rules To Remember

RULE: The Ethics Compliance Program is the result of a team effort.

• Together• Everyone• Achieves• More

Some Rules To Remember

RULE: In ethics, preventing a violation from occurring is preferable to remedying a violation after it has occurred.

From The Hippocratic Oath, Modern Version:“I will prevent diseaseWhenever I can, forPrevention is preferableto cure.

Some Rules To Remember

Regardless of what you job is or what you wear while working, in ethics and compliance everyone has a secret identity and can become a super hero or shero by exercising two super powers: (1)The power of voice to say “No”; and (2) The power of choice.

ADM FLLA

VOICE CHOICE

ETHICS AND COMPLIANCE MANAGEMENT

• The Challenge of Time

• The Challenge of Hear No, See No, Speak No

ETIOLOGY OF ETHICS AND COMPLIANCE DISEASE

• “The word ‘etiology’ is mainly used in medicine, where it is the science that deals with the causes or origin of disease, the factors which produce or predispose toward a certain disease or disorder.

• Today in medicine one hears (or reads) that "the etiology is unknown." Translation -- we don't know the cause.

• Aetiology is the preferred spelling in some countries, including the UK, whereas ‘etiology’ without an ‘a’ has taken over in the US. The word comes from the Greek ‘aitia’, cause + ‘logos’, discourse.”

http://www.medterms.com/script/main/art.asp?articlekey=3334

Four Reasons “Why some people tolerate wrongdoing even when they

recognize it.”• “Ignorance of the protections that exist for those

who report wrongdoing.” William F. Owen, Jr. MD, President, UMDNJ

• “Indifference to the positive changes that occur when ethical behavior is the standard.” William F. Owen, Jr.

MD, President, UMDNJ

• “Inertia”, e.g. complacency to wrongdoing to the extent that inactivity has become the norm.” William F.

Owen, Jr. MD, President, UMDNJ

• “Insignificance”, “I’m so far down in the organization, what I do or do not do can not make a difference to anyone or anything.

A Treatment Plan For Ethics And Compliance Disease

Five StagesDisease

Symptoms

Disease Presenting Problem As

Disease Treatment Plan and Objective

Precondition Ignorance"No one every told

me" Education

1st StageIndifference/

Insignificance

"It makes no difference what I

do."

2nd Stage Inertia"See no, speak no,

hear no". TBD

3rd Stage Irresponsibility

"Somebody else is responsible for ethics, not me." TBD

End Stage Intransigence

"I don't care, will not change, and will not comply" Removal

The Challenge of Time

• When confronted with allegations of unethical or illegal conduct by a company, agency, department, or its employees or agents, employers are legally obligated to promptly investigate those allegations.

The Challenge of Hear No, See No, and Speak No

• It is sometimes the case that when I introduce myself as an Ethics Compliance Officer, the reaction I get is captured in the preceding slide. People have a tendency to want to say to you, “I didn’t see anything, I didn’t hear anything, and I am not going to say anything.” But the reaction of the humans shown in that slide is as unintelligent as the reaction of the monkeys.

• The only difference is that when it comes to Ethics Compliance matters, the Hear No, See No, and Speak No will not save an individual or the agency or enterprise for which he or she works. Persons have a duty to cooperate with the Ethics Compliance Officer when the Ethics Compliance Officer is conducting an investigation. A person who refuses to cooperate is subject to disciplinary action.

• And perhaps most dangerous of all, should a workplace situation get into litigation, some of the key questions are going to be who knew what, when, and what did they see, say, or hear. And if an employee is called to the witness stand, his/her hands will not be over his/her mouth, ears, or eyes. One of those hands will be raised in the air, the other will be over a holy book, and both ears will be hearing the words “Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth!”

A Common Reason That Goals Aren’t A Common Reason That Goals Aren’t Accomplished Is That They Are Not Clearly Accomplished Is That They Are Not Clearly Defined. If Employees Don’t Understand Their Defined. If Employees Don’t Understand Their Company’s Ethics Goals and Its Game Plan, Company’s Ethics Goals and Its Game Plan, These Goals Won’t Be Achieved. Plenty of These Goals Won’t Be Achieved. Plenty of Organizations Fail for That Very Reason. Organizations Fail for That Very Reason. Football Doesn’t Make This Mistake. Its Goals Football Doesn’t Make This Mistake. Its Goals Are Always Clearly Defined. At the End of the Are Always Clearly Defined. At the End of the Field It’s a Goal Line. Why Do We Call It a Field It’s a Goal Line. Why Do We Call It a Goal Line? Because Eleven People on the Goal Line? Because Eleven People on the Offensive Team Huddle for a Single Purpose—Offensive Team Huddle for a Single Purpose—to Move the Ball Across It. Everyone Has a to Move the Ball Across It. Everyone Has a Specific Task to Do—the Quarterback, the Wide Specific Task to Do—the Quarterback, the Wide Receiver, Each Lineman, Every Player Knows Receiver, Each Lineman, Every Player Knows Exactly What His Assignment Is. Even the Exactly What His Assignment Is. Even the Defensive Team Has Its Goals Too---to Prevent Defensive Team Has Its Goals Too---to Prevent the Offensive Team From Achieving Its Goal.”the Offensive Team From Achieving Its Goal.” Jim Tunney, National Football League Referee Jim Tunney, National Football League Referee

THE GOALS OF ETHICS AND COMPLIANCE MUST BE AS CLEAR TO US IN OUR FIELDS AS THE GOALS IN FOOTBALL ARE TO THE PLAYERS

What is Ethics And Compliance?

• To some, it may seem like an exercise between beings from different worlds searching for a common language by which they can communicate.

• To some it is simply a close encounter of the wrong kind.

• To others it is a commitment culture, to do the right thing, everywhere, and all the time.

Ethics and Compliance Are Like Elements in Star Trek: Logical. A journey and a destination.

Fascinating. And Resistance is Futile.

A Negative View Sees Ethics As:

• Rule infraction focused, grounded in a punishment mentality.

• Just a “do not do” List

A Positive View Sees Ethics and Compliance As:

• Presenting opportunities for excellence.• Aligning with and being part of a culture of

integrity, and a holistic shared value system.

• Being Compatible with professional responsibilities.

“See no, Speak no, Hear no” Fear and Uncertainty Fear of retaliation Fear of getting

someone into trouble. Fear of legal action Fear of appearing weak

or over-reactive Uncertainty/Unsure of

what to do Uncertainty regarding

policies/protocols

What are Six Leading Barriers to Reporting Ethics Violations?

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Building Blocks For A Sustainable Ethics Compliance Process

1. Define risks

2. Prevent compliance lapses/failures.

3. Detect Non-compliance

4. Respond to Allegations and Violations

5. Evaluate results and Continually Improve.

Zero Tolerance

• Is a “declaration of our values…our own unwillingness to accept perceived wrongdoing and to look away.” (William F. Owens, Jr. Md, President, UMDNJ)

• The organization will not tolerate unethical conduct and will impose penalties appropriate to the nature and severity of the violation.

Ethics: Looking Around and Ahead

• What is hurting us today? One possible metric: ethics and compliance data such as hotline calls.

• What might hurt us in the future? Identify trends in law, regulation, culture that affects ethics and compliance. (AMA study)

Just As Press Ganey Uses Indicators to Measure Performance, Use Key Performance

Indicators to Measure and Monitor Ethics Compliance

• “What gets measured gets done.”

• Measure what matters.

Types of Metrics include

• Activities Metrics• Process Metrics• Outcome Metrics

Ethics Compliance: You Have To Set Goals and Objectives

• “If you don’t know where you are going in business…,

• … “any road will get you there” (Old New England proverb)

• …“you’ll end up someplace else” (Casey Stengel),

• … “you’re lost” (Yogi Berra)

Ethics Compliance: The Gazelle and The Lion

•  “Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle. When the sun comes up, [when it comes to Ethics Compliance] you’d better be running.”

Kenneth Chenault, Chairman and CEO American Express Co, in Take A Lesson, at 8. Caroline  V. Clarke, editor

Compliance Training is Essential to Walk the Walk of Ethics

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Looking Out and AroundLooking Out and AroundEthics and Compliance:

• What’s going on today.( dashboards showing “real time” ethics and compliance data; helpline calls; cases under investigation)

• What’s ahead. (Timely Corporate Integrity Agreement reporting; trends in law, healthcare, etc.)

The Chief Ethics and Compliance Officer

• Questioner-in-Chief.

• Works to prevent define, prevent, detect, respond to, evaluate the causes of ethics and compliance lapses/failures.