July 23, 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.

Information DemandMarket Stakeholder Groups

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“True” state of the

Company

Company & Internal Audit

Research & Academics

External Audit &

Regulators

Investors & Advisors

Workers & Labor

Consumers & General

Public

Common Stakeholder Challenges

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Level of transparency into Board and Company culture

No practical way to measure the “Soft controls” that shape

cultural norms and risk appetites.

Limited foresight into the cultural risks

that manifest misconduct and fraud.

Disclosure and flow of risk information

Often filtered and/or distorted.

Accountability and culpability

Case law suggests that not

knowing and ignorance is a

defensible claim.

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 and related disclosures really effective?

Technology

Process

People

Corporate Culture Index™ (CCI)Introduction

zEthics.com is a secured 3rd party information service that brings dynamic risk

information into the hands of Companies and market place stakeholders - empowering

them to identify and thoughtfully respond to the people risk and safety on the horizon.

People

Ethics

& Values

Internal & External

Adjudication

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 CCI™ brings market level transparency to the layer of business integrity that matters

most – the People.

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Data Structure & Reporting

The Corporate Culture Index™ is yielded from the zEthics.com information service that administers and manages employee surveys and data submission for subscriber 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

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Data Structure & Reporting..cont’d

#1 – Questionnaires & Surveys Mirrors the 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)

#2 - Ethics Action Reporting (“EARs”) Interactive communication for supporting;

Complaint validation and documentation

Case management

Whistleblower protection

#3 - Suggestion Reporting Identify and initiate improvement ideas that drive business returns

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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

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Example CCI™ DashboardCultural Trend Analysis

Note: Chart is for illustrative purposes only. PY = Prior Year and CY = Current Year trending.

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Example CCI™ DashboardIndustry Analysis

Note: Chart is for illustrative purposes only. Y = Year.

Disclosure PolicyInformation Access by Subscription Type

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Company and

Internal Audit

External Audit

and Regulators

Investors and

Advisors

Workers and

Labor

General

Public

Company

QuestionnaireX X X X X

Company

Survey 8 Dimensions

XCompany voluntary /

subpoenaX X Company voluntary

Executive

Survey 8 Dimensions

XCompany voluntary /

subpoenaX 1 X Company voluntary

Ethics Action

Reports (EAR)X

Company voluntary / subpoena

Company voluntary / subpoena

X Company voluntary

Suggestion

ReportingX Company voluntary Company voluntary X Company voluntary

1 Executive name fields are restricted to the company and internal audit, reporting for this subscriber identifies the

executive in a standard responsibility level; Board Fiduciary, Officer Fiduciary, Non-Officer Fiduciary, or Key Manager.

X = Information Access

Generalized

Information

Specific

Information

Information flow that supports market stakeholder groups

Company 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.)

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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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External Auditors

& Regulator Benefits

Fast-track valid whistleblower complaints Timely access to original, independently derived information

Improve transparency into the corporation to aid in audit planning, investigations, etc. Support dynamic audit planning

Utilize resources more effectively

Reduce audit cycle times

Effectively audit governance, internal control, & risk management

Readily identify aggressive corporate cultures that discount risk

Readily determine where delusion ends and dishonesty begins

Early warning of fraud and misconduct at corporations

Check & balance against disclosures in public filings

Assist SEC with building the Investor Protection Fund

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Investor & Advisor Benefits

Proxy access – board evaluation, selection, nomination and risk disclosures

Say on pay – leverage to reign in excessive compensation

Address shortcoming in the marketplace for due diligence

Credit ratings are unreliable and impossible to measure

The external audit report identifies limitations in finding fraud

Stock analysts are not independent – often unreliable and biased

Access to timely, reliable and comprehensive information about fraud and

high risks

Early warning of potential problems

Check & balance against public disclosures

Collaborate with other investors to actively engage companies within

investment portfolios

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Worker & Labor Benefits

Gain confidence that the peoples voice “will be heard” by participating

in periodic company and executive surveys.

Gain confidence knowing a 3rd party reviews and validates complaints

while protecting workers anonymity.

Qualified “whistleblowers” share in rewards and bounty programs.

Gain confidence that competent Certified Internal Auditors® will help

you understand how to complete and validate complaints.

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General Public Benefit

Know the unbiased truth about corporations

Easy access to reliable information for due-diligence

Readily identify aggressive corporate cultures that discount risk

Safeguard investments and retirement savings

Make better buying and investing decisions

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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

mbrozzetti@boundlessllc.com

Contact Information

Mark Rome

CEO, zEthics, Inc.

980 9th St., 16 Floor

Sacramento, CA 95814

(602) 358-9586

mrome@zethics.com

http://www.zethics.com

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