Not Your Father's Board Training - Compliance Strategists

Not Your Father’s Board Training Donna Boehme Compliance Strategists February 18, 2010 If you do not have computer speakers, the back-up conference number is 866-699-3239; Code: 663 353 695

Not Your Father’s Board Training What Today’s Boards Need to Know about Compliance and Ethics

Donna Boehme Compliance Strategists LLC February 18, 2010 ComplianceStrategists LLC building value through ethical leadership

Today’s Presenter

Donna Boehme Compliance Strategists LLC ComplianceStrategists LLC building value through ethical leadership

Polling Question 1 How often does your company Board of Directors receive compliance and ethics training? a) b) c) d) e)

annually 2-3 times a year quarterly or more has not received training don’t know

ComplianceStrategists LLC building value through ethical leadership

Polling Question 2 How often does your company Board of Directors receive periodic updates on the compliance and ethics program? a) b) c) d) e)

annually 2-3 times a year quarterly or more has not received updates don’t know


Increased Scrutiny on Board’s Role           

Enron/WorldCom directors’ personal liability Sarbanes Oxley 2004 FSG Amendments & Current Proposals Thompson & McNulty Memos Stone v Ritter (sequel to Caremark) Mellon Bank Merck-Medco Managed Care Caputo Other industry guidance (eg health care) International standards Siemens et al

The bar has been raised! ComplianceStrategists LLC building value through ethical leadership

What do today’s boards need to know about c & e? Role, responsibilities & risks “training” Oversight of program implementation & effectiveness

Knowledgeable of program content & operation ComplianceStrategists LLC building value through ethical leadership

“reporting”

Evolving Standards for Board Training & Reporting

BEST PRACTICE

OLD PRACTICE

• One time or annual briefing

• 1 way PPT show • Mile high ethics review & the ‘state of the world’ • Statistics without context • “Scare” factor ComplianceStrategists LLC building value through ethical leadership

• Planned curriculum – regularly scheduled sessions covering successive topics • 2-way dialogue about Board’s role/ responsibilities & the program • Focus on highest risk areas -metrics that matter -real stories • Effectiveness/Impact of program on organization • Value-added support to Bd’s legal responsibilities

REALITY CHECK 

Board time is at a premium & hard to get/hold

 “Training” and “Reporting” may have to share a slot - “stealth training” can be very effective  Compliance and ethics officer as the “dean” of the Board curriculum


Polling Question 3 Which function in your organization is responsible for providing the Board with periodic reports on compliance and ethics? a) b) c) d)

Compliance/ethics Legal Audit Other


Polling Question 4 In my company, the person tasked with the day-today management of compliance and ethics program a) has direct, unfiltered access to the Board or an appropriate Board committee b) develops reports but those reports may be filtered c) develops or contributes to reports that are presented by another function d) is not aware of whether & to what extent the Board receives any compliance and ethics information or training ComplianceStrategists LLC building value through ethical leadership

Strategies for Board Engagement  Know your board - individual background & hot buttons - previous board training & presentations  Avoid “overselling” - you are not the guarantor of ethics  Instead of “mile high” reviews= closer looks at specific issues, real examples - Deep dive into specific risk areas - Cultural obstacles and our planned approaches

 Helpline & training stats don’t give whole picture - consider a dashboard/report card system

- meaningful metrics + anecdotal data - an evolving “picture” that adds value to Board’s overall knowledge


Strategies for Board Engagement  Support proactive mindset – acting on red flags  Create balance - “scare the horses” vs educate & inform  Difference between ‘filtering’ and ‘accuracy checks’  Collaboration with other functions to increase effectiveness, avoid redundancy and conflicting information  Evolving conversation that should become richer with each session


Sample Board Training Plan  Session 1: Board Role & Evolving Legal Landscape, including Best Practice C&E Approach  Session 2: Elements of Effective Program & Best Practice - Company Baseline - Backed up with real examples from the front lines - Establish metrics & short term/long term plan  Session 3: Closer looks at specific issues - Risk Assessment & How Functions Will Work Together - How are we promoting ethical leadership in senior management? - Gaps, cultural obstacles and planned approaches

 Session 4: : Deep Dive into Risk Area A - What is risk, current approaches, challenges, short/long term plan ComplianceStrategists LLC building value through ethical leadership

Final thoughts … –

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Bar has been raised Board must understand its role in order to discharge it Focus on real risks and issues, with examples Have a plan of action, engage supporters Each Board and company is unique Every Board is ultimate overseer of program Challenge is to deliver fit for purpose training & engagement to empower Board in its role ComplianceStrategists LLC building value through ethical leadership

Appendix: Assessing Baseline to be posted


Questions

contact

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visit our site http://compliancestrategists.com


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