2013 Q4 100 Most Influential People in Business Ethics by Ethisphere

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QUARTER 04 // 2013

INSIDE: THE CEO OF MANPOWERGROUP ON EMPLOYEE ENGAGEMENT GOOD. SMART. BUSINESS. PROFIT.

Essential reading for Directors, CEOs, General Counsel and Ethics & Compliance Professionals who see opportunity in ethical leadership

Essential reading for Directors, CEOs, General Counsel and Ethics & Compliance Professionals who see opportunity in ethical leadership www.ethisphere.com ETHI_Q4_2013_Cover.indd 1

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FEATURE ETHISPHERE Magazine // Quarter 04 // 2013 // 100 Most Influential People

2013’S 100 MOST INFLUENTIAL PEOPLE IN BUSINESS ETHICS

TURN TO PAGE 74

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ETHISPHERE Magazine // Quarter 04 // 2013 // 100 Most Influential People

SPEAKING UP From The Top // PAGE 06

MOUTHING OFF Letters to the Editor // PAGE 08

BY THE NUMBERS The Facts and Figures for this Quarter // PAGE 09

THE GOOD AND THE BAD Paper Bags and Profit Propellers // PAGE 10

AROUND THE CIRCUIT The 2013 Asia Ethics Summit // PAGE 13

COMPLIANCE & ETHICS Ethics By Example // PAGE 14 Gordon Repp // PAGE 18 Social Compliance // PAGE 20

GLOBAL COMPLIANCE Global Compliance: Peru // PAGE 24

WORLD’S MOST ETHICAL Achieving What’s Possible // PAGE 56 Starbucks // PAGE 59 Closing the Skills Gap // PAGE 61

BRIBERY & ANTI-CORRUPTION The Tools of the Trade // PAGE 64 Risk Containment // PAGE 70

THE EVENT CALENDAR The Schedule // PAGE 78

THE FINAL WORD Asia Ethics Summit // PAGE 79

ISSUE INDEX Names and Companies in this Issue // PAGE 80

THROUGHOUT MY CORPORATE CAREER, I HAVE COME TO LEARN THAT THERE IS NO “COOKIE CUTTER” APPROACH TO CREATING A CULTURE OF ETHICS, COMPLIANCE AND INTEGRITY. ETHISPHERE \\ 2013 \ Q4 03

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Compliance & Ethics Training April 7–8 • Omni Austin Hotel Downtown • Austin,TX

“The ACC Compliance and Ethics Training Program was excellent in all respects. As the Chief Compliance Ofﬁcer at a small company with many areas of responsibility, I found it extremely valuable to leave the program with a comprehensive view of current compliance issues, ways to handle them, and new professional connections in the compliance arena.” - Carol Faucher, Senior Counsel & Chief Compliance Ofﬁcer, Tyr Energy

Attend the ACC Compliance & Ethics Training Program – interactive and packed with compliance essentials. If you are in-house counsel from a small to medium-sized law department or an experienced compliance professional who needs to develop or enhance your organization’s compliance program, this is the program you should attend.

For more information and to register, visit www.acc.com/ce.

Topics to be covered include: •

Compliance Program Nuts and Bolts

•

Compliance Investigations

•

Attorney–Client Privilege in the Compliance Context

•

Convincing your CEO to Augment Your Compliance Program

•

And more

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EXECUTIVE DIRECTOR

Alexander F. Brigham

EDITOR-IN-CHIEF/PUBLISHER

Stefan Linssen MANAGING EDITOR

Aubrie Artiano CONTRIBUTING EDITOR

Kathleen Switzer CONTRIBUTORS

John P. Cunningham Christian Ewert Jeffrey Joerres Gary E. McCullough Steven J. Pearlman Gordon Repp Erin R. Schrantz Matthew Swaya Paul J. Ward

CHIEF EXECUTIVE OFFICER

Timothy Erblich

CREATIVE DIRECTOR

Cory Michael Skaaren PUBLICATION DESIGN

Skaaren Design ILLUSTRATIONS & ART

RJ Matson (cover) Steve Tansley (special feature) Cory Michael Skaaren (editorial) Brette Baecker REPRINTS

info@ethisphere.com PRINTED BY

QuadGraphics 660 Mayhew Lake Rd NE

Chelsie Chmela CONTENT

FUTURE RANKINGS Nominate your company for any and all of our rankings, awards and recognitions. If you want to nominate a company for the 2014 World’s Most Ethical Companies, or the 2014 Attorneys Who Matter, go to: www.ethisphere.com

ENGAGEMENT MANAGER

EVENTS MANAGER

Michael Byrne Kevin McCormack

The conversation continues at www.ethisphere.com

This magazine is printed on recycled paper.

Main Office Phone 480-397-2655 • Write Us info@ethisphere.com Office Address Ethisphere Magazine, 6263 N. Scottsdale Road, Suite 205, Scottsdale, AZ, 85250 SUBSCRIBER SERVICES/NEW SUBSCRIPTIONS Please email us at info@ethisphere.com. You can also call us at 480-397-2655 or write to ETHISPHERE MAGAZINE at 6263 N. Scottsdale Road, Suite 205, Scottsdale, AZ, 85250 ETHISPHERE ONLINE Portions of this issue, along with web-exclusive features, can be found at our website: www.ethisphere.com ADVERTISER INFORMATION Access ETHISPHERE’s online media kit at www.ethisphere.com/mediakit To order reprints of stories printed in this edition of Ethisphere, please send an email request to reprints@ethisphere.com

The Ethisphere Institute has begun the process of selecting the 2014 World’s Most Ethical Companies designation. The coveted World’s Most Ethical (WME) Companies designation recognizes those organizations who truly go beyond making statements about doing business “ethically” and demonstrate real and sustained ethical leadership within their industries. In its eighth year, Ethisphere anticipates a record number of applicants for the World’s Most Ethical (WME) Companies designation and will host three, 20-30 minute webinars to describe the application process and provide insight into what the designation means for companies around the globe. These events included: World’s Most Ethical Companies: Demystifying the Application Process What It Means to Be a World’s Most Ethical Company

OUR MISSION STATEMENT The Ethisphere® Institute is an independent center of research, best practices and thought leadership that promotes best practices in corporate ethics and compliance and enables organizations to improve governance, mitigate risk and enhance relationships with employees, business partners, investors and the broad regulatory community. Ethisphere evaluates and benchmarks compliance and governance programs, honors superior achievement through its World’s Most Ethical CompaniesTM recognition program and publishes Ethisphere Magazine. Ethisphere is also the leading provider of independent verification of corporate ethics and compliance programs that include: Ethics Inside® Certification, Compliance Leader VerificationTM and Anti-Corruption Program Verification TM.

The opinions expressed in the magazine are those of the authors, not the printer, sponsoring organizations or the Ethisphere Institute.

What the World’s Most Ethical Companies Have in Common While the survey is now closed, anyone interested in viewing these webcasts can do so by sending an email to: info@ethisphere.com To learn more about or register for other upcoming event series, visit Ethisphere’s event page. Companies can also nominate themselves for World’s Most Ethical Companies consideration by going to: www.ethisphere.com

Read more on the topics discussed in this issue by going to: WWW.ETHISPHERE.COM

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DEAR READERS Last year was one for the books. It was one in which the many lists recognizing the “top news stories of 2013” intersected with the biggest stories in the ethics, compliance and governance world. There was of course the NSA controversy, which dominated world news and influenced a number of large technology (and non-technology) companies to seriously review and update their data protection programs. And there was the J.P. Morgan settlement and new records around SEC whistle-blower payments, both of which had – and have – an impact on all companies. Unfortunately, most of the stories that made the “top news” category are negative or controversial. Ethisphere isn’t shy of announcing its own lists, but we try to focus on positive accomplishments. This issue of Ethisphere Magazine features one such annual list, recognition of the 100 Most Influential People in Business Ethics (page 30). This annual list, as always, features a very diverse group of individuals with widely different backgrounds. The common trait? Every one of the people listed did something in 2013 that had a positive impact on the world of business ethics. There is also another way we will be celebrating accomplishment by companies and individuals in Ethisphere Magazine, and that’s through the new World’s Most Ethical Companies department (page 56). This new department will be featured in Ethisphere Magazine throughout the year, and highlight the stories behind the companies and the people that have earned the World’s Most Ethical Companies recognition. In this issue we feature insight from Manpower, Starbucks and Kennametal, three companies that earned the WME designation in 2013. And speaking of the World’s Most Ethical Companies, we are nearing the announcement of the 2014 winning companies. Ethisphere will make that announcement, as we do every year, during the WME awards dinner after the first day of the Global Ethics Summit on March 20th. I encourage everyone to take a look at this year’s event, including the lineup of world-class speakers, by going to www.ethisphere.com. Here’s to another year of companies, and the people that influence those companies, setting the bar higher on ethical behavior. Remember: Good. Smart. Business. Profit.

Stefan Linssen Editor-in-Chief Ethisphere

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I’M INTERESTED IN ATTENDING YOUR GLOBAL ETHICS SUMMIT. WHERE CAN I LEARN MORE ABOUT THE SESSIONS ON THIS YEAR’S LINEUP?

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QUARTER 03 // 2013

INSIDE: THE CEO OF PRUDENTIAL CORPORATION ASIA ON ETHICAL CULTURES

“I missed a webinar you hosted a few weeks back. Is it possible for me to access a recording or the presentation materials?” – Walter N.

GOOD. SMART. BUSINESS. PROFIT.

Essential reading for Directors, CEOs, General Counsel and Ethics & Compliance Professionals who see opportunity in ethical leadership

Cover Story p. 38

Ethisphere response: Walter N., thank you for your interest! We do offer on-demand streaming through West LegalEdCenter. To gain access, please visit www.westlegaledcenter.com and sign up for a complimentary account. Ethisphere Events

“I’m interested in attending your Global Ethics Summit. Where can I learn more about the sessions on this year’s lineup?” – Michael J. Ethisphere response: Michael J., great question. We are excited to announce that this year’s Global Ethics Summit will focus on leadership strategies! To view a full breakdown of the summit’s agenda, please visit www.globalethicssummit2014.com/agenda 2014 World’s Most Ethical Companies

“When will the 2014 winners be officially announced?” Melanie H. Ethisphere response: Melanie H., the official World’s Most Ethical Companies (WME) announcement will be made March 21st, however, should you wish to attend the WME honoree dinner on March 20th, as part of the Global Ethics Summit, you can learn more at www.globalethicssummit2014.com

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Ethisphere Webcasts

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Write Us At: info@ethisphere.com or at Ethisphere Magazine, 6263 N. Scottsdale Road, Suite 205, Scottsdale, AZ, 85250

Nothing at press time.

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BY THE NUMBERS 2.2: Johnson & Johnson will pay $2.2 billion to resolve claims around alleged kickbacks to doctors and misbranding claims in regards to three of its prescription drugs. After criminal fines and forfeiture, the number jumps an additional $485 million.

1.8: SAC Capital announced this quarter a settlement agreement of $1.8 million to resolve an insider trading indictment. The fine is the largest insider trading amount ever paid in the U.S.

120: Toyo Tire & Rubber has been found guilty this quarter of fixing prices of its vehicle parts products. Toyo Tire, as part of a global auto industry price-fixing scandal, has agreed to plead guilty to the charges and pay a total fine of $120 million.

3: Former Morgan Stanley banker, Du Jun, will pay roughly $3 million to the victims of his insider trading scheme. The ruling is the first of its kind in Hong Kong, and is a big victory for Asian financial corruption. 100: The Royal Bank of Scotland will pay $100 million in fines to settle investigations into accusations that former employees concealed transactions involving sanctioned nations.

46: Finnish construction company, Lemminkainen, will pay $46 million in damages to local authorities for fixing asphalt prices with competitors. The company faced claims as high as 129 million euros, though according to Reuters the court dismissed those claims due to the alleged involvement of the state. ETHISPHERE \\ 2013 \ Q4 09

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PAPER BAGS AND PROFIT PROPELLERS Paper Bags are bestowed upon companies and organizations that are involved in or have attempted to cover up scandals, violations or other embarrassing events.

Profit Propellers are awarded to companies and organizations that have recently done something interesting, innovative or brave in the area of ethical leadership.

Buick earned itself a Profit Propeller for its involvement with the Kids in Need Foundation. Buick dealerships across Northern and Southern California donated backpacks filled with school supplies for 1,100 students in greater Los Angeles and the surrounding cities.

Johnson & Johnson and Novartis have earned themselves two big Paper Bags for blocking the entry of a generic painkiller in the Dutch market. Johnson & Johnson was fined 10.8 million euros, while Novartis was slapped with 5.5 million euros.

A Paper Bag goes out to Stanley Electric Co, a Tokyobased automotive light bulb manufacturer, for its part in a rate-rigging scheme to fix prices of bulbs sold for cars in U.S. The company has agreed to pay a $1.44 million fine for the criminal activity.

A Profit Propeller goes out to MGM Resorts International for being recognized as one of the nationâ&#x20AC;&#x2122;s leading corporations in workplace equality for its policies and practices around lesbian, gay, bisexual and transgender (LGBT) employees. MGM received a perfect score from the 2014 Corporate Equality Index (CEI) annual survey, which ranks companies based on benefits and practices around LGBT.

The UPS Foundation is awarded a Profit Propeller this quarter for donating more than $2.4 million to nine non-profit organizations. The organizations receiving the grants specialize in disaster relief and preparedness.

Bilfinger, an international engineering company, found itself inside a Paper Bag this quarter over bribery allegations. Bilfinger will pay a $32 million penalty as part of a deferred prosecution agreement in order to resolve charges that it violated the FCPA by bribing government officials in Nigeria to obtain business contracts.

Do you have an example of a recent news story that you think should be awarded either a Profit Propeller or a Paper Bag in Ethisphere? Send your ideas to aubrie.artiano@ethisphere.com. 10 Q4 \ 2013 \\ ETHISPHERE

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AROUND THE CIRCUIT FACTS & FIGURES

34% In China, 34% still believe that company management is likely to take shortcuts when economic conditions are tough.

36% 36% of respondents in Indonesia say that it is commonplace to use bribes to win contracts in their industry.

On December 4-5 of 2013, Ethisphere, Thomson Reuters and Asian Legal Business jointly hosted the 1st annual Asia Ethics Summit at the Renaissance Harbourview Hotel in Hong Kong. The summit raised conversation and insight around the many hardships companies face as they continue to explore and navigate Asiaâ&#x20AC;&#x2122;s various emerging economies. Much clout remains around regional cost increases, local competition and relatively loosely enforced regulatory laws and guidelines, setting the tone for an incredibly informative and thought provoking event. Representing roughly a dozen countries, 200 industry leaders from global organizations and 40 speakers attended and presented at the inaugural summit, making the first year a success. Panel sessions, intended to facilitate informal and engaging exchanges between speakers and the audience, covered such topics as Adapting an International Ethics and Compliance Program to Asia, Regulatory Developments throughout Asia, Corruption Challenges in Key Asian Markets, and Becoming Globally Competitive.

in Hong Kong; Ellen Proctor, Executive Compliance Counsel at General Electric International; William E. Conner, Chairman and CEO of William E. Connor & Associates; Wanda Denson-Low, Senior Vice President, Office of Internal Governance at the Boeing Company; Albert Ho, Assistant Commissioner, Customs and Excise Department Hong Kong; and Wesley Wong, SC Deputy Director of Public Prosecutions at the Department of Justice, Hong Kong Special Administration Region.

Additional panel discussions focused on what companies are doing to reinforce ethical programs and culture, best practices around anti-corruption developments and implementation, and some of the various cultural differences that can significantly impact companies as they conduct business in the region.

Ethisphere is currently planning its next joint Summit in the Asian region for 2014, in addition to Summits in Europe, Latin America and the upcoming Global Ethics Summit in New York City.

The Summit featured a list of senior regulatory leaders, CEOs, board members and inhouse counsel. Among the list were notable speakers, such as Gavin Morgan, COO and Head of Leasing at Jones Lang LaSalle

To learn more about the Asia Ethics Summit, please visit: www.asiaethicssummit2013.com To learn more about the upcoming Global Ethics Summit, including how to register, please visit www.globalethicssummit2014.com

34% 34% of respondents believe that the best way to proactively detect fraud is by implementing a stronger internal audit team.

39% In Malaysia, 39% say that bribery and corruption as practices happen widely across various industries.

52% 52% of companies are worried about money laundering in the next 12 months in Vietnam.

78% 78% of respondents believe that the use of technology to examine all transactions across the company would result in better fraud and corruption detection. All stats came from the Ernst & Young 2013 Asia-Pacific Fraud Survey

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COMPLIANCE & ETHICS Ethics by Example...14 // Gordon Repp...18 // Social Compliance...20 CEC was no exception. I took on the challenge of leading this company because I believed it could address real education needs not being addressed by traditional two and four-year institutions. In 2004, issues began emerging amid allegations of document tampering, enrolling unqualified students, overly aggressive sales and marketing, among other claims. When I joined CEC in 2007, the company was still reeling and the culture was unraveling due to the resignation of my predecessor. It became my responsibility to set the right ethical tone at the top, create a cohesive company and institute rules where there were few or none. The company made steady progress during my tenure – we reduced annual employee turnover, increased employee confidence in the company’s integrity and ethical values, achieved positive growth, and more. However, the reality is that while a number of major issues were corrected, it wasn’t enough. I’m proud of the changes I made during my leadership of CEC, but I’m also able to reflect on what else could have been done, or could have been done differently. As a result of this, I’ve taken away quite a few ethical lessons that can be applied to any company, regardless of industry.

ETHICS BY EXAMPLE

Setting the Tone for an Ethical Workplace Culture By Gary E. McCullough This article contains information regarding the following topics: STRATEGY

In theory, many people think ethical issues are simple, cut and dried questions to answer, or situations to be resolved. However, the reality is that most ethical dilemmas, particularly those faced in the workplace, are much more subtle. In real life, no one tells you that you’re about to find yourself in an ethical dilemma, or necessarily the clear-cut way to address it. Throughout my corporate career, I have come to learn that there is no “cookie cutter” approach to creating a culture of ethics, compliance and integrity. And while most organizations have well-defined rules and regulations, values, vision statements and training programs, at the end of the day, it is about the people. Ethics are the responsibility of each individual person, 14 Q4 \ 2013 \\ ETHISPHERE

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These are: 1. Implement structure and clear expectations. Whether your company is looking to rebuild or create a new foundation for an ethical culture, at minimum the following should be put into place: • Clear policies and expectations (e.g. vision/values statements);

but start with the CEO and the Board of Directors setting the right tone from the top.

• Strong education and training programs;

I have faced my fair share of ethical challenges throughout my 25-year professional career, which started as a U.S. Army Infantry officer, and extended through executive roles with leading companies such as Procter & Gamble, Wm. Wrigley Jr. Company and Abbott Laboratories. However, my most challenging role was also my most recent, where I served as CEO of Career Education Company (“CEC”), a publicly traded for-profit post-secondary education provider that, at its peak during my tenure, had 90 campuses and served more than 100,000 students.

• Metrics and measurement systems;

For-profit education is a highly scrutinized industry, and as one of the largest players,

• Monitoring systems to identify potential issues; • A compliance organization/ infrastructure (varies depending on business); • A helpline or method for reporting issues (preferably confidential); • A method to investigate and resolve complaints. Not only does this create a basis for addressing issues, it also shows employees WWW.ETHISPHERE.COM

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COMPLIANCE & ETHICS 4. Focus on the work. If you work in a company with many issues, directly address them, but don’t dwell on mistakes of the past.

I’M PROUD OF THE CHANGES I MADE DURING MY LEADERSHIP OF CEC, BUT I’M ALSO ABLE TO REFLECT ON WHAT ELSE COULD HAVE BEEN DONE, OR COULD HAVE BEEN DONE DIFFERENTLY.

As an example, while at CEC, I met with our accreditors, regulators and more than 200 members of Congress or their senior staffs. In those meetings I acknowledged that I had taken over a challenged company in a troubled industry but that both the company and the industry were taking actions to change. My goal was not to defend past practices, but to focus them on the work that was underway to fulfill our obligations. 5. Be in alignment with your Board. Boards share “ownership” of the compliance agenda with the CEO and senior leadership team. This is often best accomplished via Board committees, particularly the audit committee, and by bringing in outside perspectives, methods and best practices to further strengthen the agenda. Additionally, Boards ensure that senior leaders and ethics/compliance staff remain in alignment with the company’s overarching values, mission and objectives. If CEOs or senior leaders are ethically challenged, Boards have the responsibility to correct the behavior or to terminate them. 6. Instill it in the culture.

that leadership is serious about ethics and making changes where necessary. Speaking of change, these tactics can also help manage any employee resistance by providing them with vehicles to comment or raise concerns. 2. Ignoring infractions is not an option. Leaders face an ongoing balance: too harsh and you run the risk of demoralizing your team; too lenient and you get run over. Having said that, leaders do not have the option to ignore even minor infractions of organization rules – otherwise, why have them? Where leaders do have a choice is in how they respond to these infractions, and the message their response sends. 3. Make ruthless decisions, but execute them with compassion.

32 PERCENT: PwC’s 3rd Annual State of Compliance 2013 survey revealed that 32% of respondent companies do not have an in-house compliance committee to support compliance efforts.

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The bottom line, leaders must model the behavior expected from others. And when engaging with individuals, never let an opportunity pass to remind them of the company’s obligation to its stakeholders to always “do the right thing.”

Expert Biography Gary E. McCullough’s more than 25-year business career has included roles as a Corporate Board Member, Chief Executive Officer, President and Senior Executive in market-leading consumer and commercial companies including The Procter & Gamble Company, Wm. Wrigley Jr. Company, Abbott Laboratories, The SherwinWilliams Company and Career Education Corporation.

Tough decisions come in a variety of forms: staff reductions, cuts in compensation, passing over someone for a promotion because of performance issues, and more. Don’t hesitate to make those decisions if they are necessary and right – no matter how difficult – but be sure to execute them with compassion. Depending on the situation, this can mean delivering the news in person, making resources available to employees following a particularly difficult decision, etc. ETHISPHERE \\ 2013 \ Q4 15

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COMPLIANCE & ETHICS CEOs may set the ethical tone from the top, but they need a supporting capable cast to tend to the day-today implementation of the company’s compliance and ethics programs. What are these leaders on the “front lines” talking about and doing these days? Tell us what your group is focused on these days. Our main focus these days is on continuing to push ethics and ethical conduct down to our vendors. We engage hundreds of vendors around the globe and have a number of good tools to help drive the required behavior, but there is always more to do. Are there any particular initiatives that you have found worked well and you would like to share with others? This isn’t an ad for Ethisphere, but we’re currently launching Ethisphere’s Supplier Risk-Quotient tool to our vendors as a way to accomplish this task. It won’t be a panacea, but one more tool in the toolkit that we’re hopeful will continue to drive the message home. What part of your background has most prepared you for this position? I’ve been a lawyer for nearly 28 years and in-house for 26 of those. I’d have to say that the variety of matters that I’ve worked on over those years has most prepared me for the role I have today. What keeps you up at night? The regulatory environment in which we operate continues to get more complex, with more countries adopting new rules designed to address the latest scandal. For the most part, I think that these new rules are beneficial to those operating and investing in these markets, but many countries are trying to extend their reach well beyond their borders in order to protect their citizens and trying to make them all work together can be a challenge.

AN INTERVIEW WITH GORDON REPP Lessons from the Front Lines of Ethics and Compliance Interview by Aubrie Artiano

This article contains information regarding the following topics: STRATEGY

Is there one specific piece of advice that you would like to share that you wished you had known when you first got the job? Sounds cliché, but making progress in the world of ethics is evolutionary, not revolutionary. There’s no silver bullet and you have to be persistent and be satisfied with the small victories. To whom do you report? What role have they played in the compliance and ethics program? I report to our Global General Counsel, Mark Ohringer. Mark is a real leader in this area and has really helped to shape our program and drive the ethical culture of our company.

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COMPLIANCE & ETHICS

SOUNDS CLICHÉ, BUT MAKING PROGRESS IN THE WORLD OF ETHICS IS EVOLUTIONARY, NOT REVOLUTIONARY. THERE’S NO SILVER BULLET AND YOU HAVE TO BE PERSISTENT AND BE SATISFIED WITH THE SMALL VICTORIES.

What’s the worst job that you have ever held? (Usually it is some job during college or the summer – or possibly even straight out of college) And why? To help put food on my table (and beer in the fridge) while studying for the Bar Exam, I took a job at a Thoroughbred Farm cleaning out the stalls. The only benefits were that I got paid and a good workout every day.

The 2013 Ethics & Compliance Leadership Survey Report revealed that 40 PERCENT of E&C leaders report that a lack of appreciation of culture as a business driver is a major obstacle in building a strong ethical culture.

What’s the dumbest/smartest question that someone has ever asked you in an interview, and how did you answer it? (For example, someone reported to us that they were once asked, “If you were a vegetable, what would you be and why?”). I think that the smartest question I’ve been asked is “how can you help me grow my company?” Lawyers don’t usually get asked that question and it made me realize that the interviewer understood that we can add value to the growth of an organization. If I recall correctly, my answer was that I’d focus on helping him to keep the money that he was making. Thank you for your time, Gordon.

Expert Biography Gordon serves as General Counsel, Secretary and Chief Compliance Officer for LaSalle Investment Management and Executive Vice President, Deputy Global General Counsel and Assistant Secretary of Jones Lang LaSalle Incorporated.

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COMPLIANCE & ETHICS

SOCIAL COMPLIANCE IN A TIME OF SOCIAL CHANGE How the ICTI CARE Process is Improving Social Compliance Written By Christian Ewert This article contains information regarding the following topics: STRATEGY + LEADERSHIP + WORKFORCE

Rapidly evolving socioeconomic conditions in China have compounded the challenge of creating systemic change in children’s products factories. They have also underscored the growing importance of combining education and training programs with traditional supply chain monitoring aimed at achieving sustainable improvement. The once-plentiful labor pool in China, where 80% of the world’s toys are manufactured, is shrinking; blue-collar wages have quadrupled; raw material costs have risen sharply; and the RMB has appreciated. At the same time, there is continuous downward pressure on the prices buyers will pay for the goods produced. New and innovative approaches were taken by the children’s products industry to meet these challenges and to avoid putting at risk the significant progress already achieved 20 Q4 \ 2013 \\ ETHISPHERE

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by the more than 2,400 factories and 925 brands, retailers and licensors participating in the ICTI CARE Process, the industry’s ethical manufacturing program that was launched by the International Council of Toy Industries in 2003. In 2001, members of the International Council of Toy Industries (ICTI) established an industry-wide Code of Business Practices that laid out the basic principles for fair treatment of factory workers and committed its members to abide by them. Two years later, ICTI took the second major step: it established a social compliance auditing system overseen by the ICTI CARE Foundation (ICF) to ensure that toy factories were matching their actions to the principles of the Code. Toy brands, retailers and licensors came together and created an independent industry-wide initiative

known as the ICTI CARE Process (ICP), a single auditing protocol designed to monitor factory working conditions and to eliminate audit duplication. The initiative accepts third party auditors who have been trained in a course approved by the International Register of Certificated Auditors (IRCA). This has led to significant improvement in the treatment of migrant workers and factory health and safety practices, as well as audit integrity. In an endorsement of what ICTI is doing, Jane Nelson, who teaches corporate social responsibility at Harvard’s Kennedy School of Government, notes that, “Collective action within an industry sector, like the ICP initiative, can play a crucial role in spreading social and ethical standards down the supply chain.” (Prof. Nelson also serves on the ICF’s governing board.) WWW.ETHISPHERE.COM

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COMPLIANCE & ETHICS

PAYMENT OF CORRECT COMPENSATION AND BENEFITS TO WORKERS, ALONG WITH DISCLOSURE OF TRUE WORKING HOURS PRACTICES, WAS A REQUIRED CONDITION.

The ICF recognized early on that a pass/ fail approach to compliance auditing was not working for some parts of its checklist. There were frequent attempts to falsify working hour records or to pay below the government-mandated scale. Constant price reductions and shortened delivery times by brands and retailers continued to skew factory management practices and working hour audit results. Moreover, many factory managers lacked the business skills needed to attain systemic improvement in wages and working hours. Adopting a Continuous Improvement Process To help factories achieve ICP compliance goals and meet the corporate responsibility standards expected by multinational brands and retailers, a continuous improvement process for wages and working hours was introduced to uncover workplace reality and improve it over a fixed timeframe. While the aim is to achieve full compliance with the current ICP standard of a 66-hour workweek, ICP recognized that industrial reality and seasonal demand would not allow every factory to meet that requirement immediately and remain profitable. Suppliers were offered a degree of flexibility that allowed them to improve WWW.ETHISPHERE.COM

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at a more sustainable pace. Payment of correct compensation and benefits to workers, along with disclosure of true working hours practices, was a required condition. In return, working hour levels would be reduced gradually with the goal of achieving full compliance over a fixed period of time. Those that fail to show significant improvement within two years are terminated from the program for at least six months. This approach has resulted in increased transparency of working hours records and the beginnings of steady progress toward full compliance. In order to promote a more proactive approach, factories are encouraged to create their own internal monitoring (selfdeclaration) programs and, in cooperation with ICP, this seems to be helping. Focus on Training and Capacity Building

their rights than their parents’ generation. Those employed in ICP factories place up to 350 calls per month to the confidential, toll-free helpline service run for the ICP by an independent Chinese NGO. About 85% of the callers seek assistance resolving personal and professional issues, and 15% call to report grievances. ICP staff immediately investigates complaints of a serious nature. The helpline serves as a valuable monitoring mechanism and is an integral part of the ICP. Additionally, a mobile phone service has recently been added to the previous landline-only facility. A pilot train-the-trainer worker education program, jointly funded by the ICTI CARE Foundation and Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ), taught approximately 4,000 workers how to look after their own health and safety and how to resolve worker-management conflicts. Nearly one million workers have also received pocket-sized “CARE Cards”, which inform them of their labor rights and provide useful contact numbers and the toll-free helpline number. The Business Case for Better Social Performance The inevitable macroeconomic and social evolution in China continues to present challenges, and it has become increasingly clear that resolving business issues is the best way to address social issues sustainably. There is increased international attention to corporate social performance in China and elsewhere in Asia, where ICP’s flexible approach with suppliers and provision of capacity building support is driving the desired improvements in factory working conditions, which in turn have helped factories to survive by making them more productive and therefore more profitable. The “stick-and-carrot” approach is proving good for business.

Expert Biography Christian Ewert leads the ICTI CARE Process (ICP) in his role as President and CEO of the International Council of Toy Industries (ICTI) CARE Foundation, an independent non-profit organization chartered in New York. His responsibilities include supervising ICP’s programs, as well as fundraising and outreach activities with toy associations, global and national brands and retailers.

Management training programs have been developed for factories that require assistance in meeting ICP standards sustainably. Managers learn how to identify the root causes of non-compliance and how to effect operational efficiencies that can improve workings hours and overtime practices. China’s new factory workers are more tech-savvy and better informed about ETHISPHERE \\ 2013 \ Q4 21

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National Business Ethics Survey® of the U.S. Workforce

The Nationally Recognized Barometer of Workplace Ethics Every two years, ERC surveys a representative sample of the U.S. workforce to gauge employees’ perceptions of ethical conduct in the workplace. Like previous NBES findings, the lessons learned in this report will be discussed in ethics and compliance departments around the nation. The 2013 report includes: ❚ Updates on longitudinal measures (observed misconduct, reporting trends and retaliation levels) ❚

Benchmarks for measures of strong ethics cultures and effective ethics/compliance programs

To download your copy, visit www.ethics.org/nbes ADVANCING HIGH ETHICAL STANDARDS & PRACTICES. ERC is the nation's oldest nonprofit dedicated to independent research on workplace ethics. ERC's employee surveys and metrics help identify areas of vulnerability and measure progress – showing you what works. 2345 Crystal Drive, Suite 201 | Arlington, VA 22202 Telephone: 703.647.2185 | FAX: 703.647.2180 | Website: www.ethics.org | Email: ethics@ethics.org

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GLOBAL COMPLIANCE Global Compliance...24 // Compliance and Ethics Issues...26 // Etiquette Tips...27

GLOBAL COMPLIANCE: PERU Written by Ethisphere

This article contains information regarding the following topics: RISK MANAGEMENT + MARKETS + WORKFORCE

This regular section of Ethisphere Magazine focuses on compliance and ethics issues in global business. Each issue spotlights a different country, and includes information around key compliance challenges companies can expect when operating in each market. Additional global compliance country reports can be accessed online at www.ethisphere.com. 24 Q4 \ 2013 \\ ETHISPHERE

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GLOBAL COMPLIANCE Peru is a country with a long and storied history – the first known inhabits within the modern borders of Peru are believed to have arrived more than 15,000 years ago. The original inhabitants are thought to have traveled from Asia via the Bering Strait (between modern day Alaska and Russia), and to have eventually migrated into South America.

GENERAL COUNTRY FACTS

The country has been influenced or lead by multiple empires, including the Inca Empire, which at the height of its power stretched from modern day Colombia down to Chile and Argentina, and later as part of the Spanish-lead territory in South America. Peru’s capital, Lima, itself has a long and storied history. Founded in 1535, the city eventually gained tremendous influence over all of Spain’s South American territory and today houses Peru’s national government. The country began its independence movement in 1811, and has since had a history of various governments ranging from military-lead to democratically elected.

THE COUNTRY HAS BEEN INFLUENCED OR LEAD BY MULTIPLE EMPIRES, INCLUDING THE INCA EMPIRE, WHICH AT THE HEIGHT OF ITS POWER STRETCHED FROM MODERN DAY COLOMBIA DOWN TO CHILE AND ARGENTINA, AND LATER AS PART OF THE SPANISH-LEAD TERRITORY IN SOUTH AMERICA.

Lima

Capital: Lima Population: 29,849,303 Life Expectancy: 72.98 years Languages: Spanish Literacy Rate: 89.6% GDP (PPP): $322.9 billion GDP (Real Growth Rate): 6.3% Inflation: 3.7% Major Industries: Mining and refining of minerals; steel, metal fabrication; petroleum extraction and refining, natural gas and natural gas liquefaction; fishing and fish processing.

TOP IMPORT PARTNERS

U.S.

China Peru’s modern borders place it on the west coast of South America, located entirely south of the equator, next to the Pacific Ocean. The country borders Colombia and Ecuador to the north, Brazil to the east, and Bolivia and Chile to the south. While, like most countries of its size, Peru has varied climates, the majority of the country is comprised of the Amazon rainforest. The government of Peru is classified as a constitutional republic and is divided between an executive, judicial and legislative branch. The head of the executive branch is Peru’s President, who is elected for a five year term and is unable to seek reelection. Currently the president is Ollanta Humala who began his term in office in 2011 (Humala previously ran for president in 2006 unsuccessfully). Humala is a former Peruvian military commander who lead a small military coup attempt in 2000, and was ultimately pardoned for those actions. Peru’s GDP is the 42nd highest in the world at U.S.$322.9 billion according to the CIA’s World Facbook. The country is ranked by the International Finance Corporation’s “Ease of Doing Business” report as number 63 in ease of starting a business, 117 in dealing with construction permits, and 105 in enforcing contracts. It’s also ranked number 83 out of 177 countries on Transparency International’s Corruption Perception Index, which is a highlight of some of the difficulties the country faces today. WWW.ETHISPHERE.COM

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24.6%

14%

Brazil

6.4%

Argentina Chile

5% 4.8%

TOP EXPORT PARTNERS

China

U.S.

15.7%

Canada Japan

19.9%

9.5% 6.6%

(Source: CIA World Factbook) ETHISPHERE \\ 2013 \ Q4 25

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GLOBAL COMPLIANCE

RECENT NEWS ARTICLES ON CORRUPTION IN PERU BY MAJOR INTERNATIONAL MEDIA OUTLETS INCLUDE STORIES ON HOW POLICE WILL TIP OFF SUSPECTS ACCUSED OF IMPROPER BEHAVIOR, AND MONEY AND OTHER EXPENSIVE GIFTS (SUCH AS HOMES) BEING GIVEN TO POLITICAL FIGURES.

FIVE COMPLIANCE AND ETHICS ISSUES TO CONSIDER CORRUPTION As mentioned above, Peru ranks 83 out of 177 countries on Transparency International’s Corruption Perception Index, an annual ranking of countries around the world by levels of corruption. Recent news articles on corruption in Peru by major international media outlets include stories on how police will tip off suspects accused of improper behavior, and money and other expensive gifts (such as homes) being given to political figures improperly. For example, recent news articles have raised suspicion of two former presidents who are considering running for the position again, accusing them of accepting homes in the most expensive neighborhoods within Lima improperly. There were also accusations of government officials’ family members receiving improper payments in exchange for government contract awards.

Deal with it Corruption and anti-corruption efforts are issues that have been discussed extensively over the past several years. As is the case when doing business in any countries that have high levels of corruption, multinational companies must be diligent in properly training their work force. Particular focus must be paid on employees and agents operating in these countries that have higher risks of corruption. These companies must benchmark themselves against best practices in anti-corruption program implementation or risk significant legal and financial penalties. CRIME AND POLITICAL INSTABILITY While Peru has a relatively stable government, it is nevertheless part of a region that is known to have political instability. Add to the fact that the sitting president attempted a coup of his own in the not-toodistant past, one must manage expectations of the government’s stability. Peru 26 Q4 \ 2013 \\ ETHISPHERE

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has also recently seen increased levels of crime which threaten to undermine the current government.

Deal with it Peru is relatively safe and stable as compared to some of its neighboring countries. However, companies with operations in the region must be mindful of the risks and dangers that come with the increased levels of crime in the country. If you are doing business in Peru, you should take the same precautions that you would take when traveling to other countries in the region, such as monitoring for travel advisory warnings (the U.S. State Department currently does not have a travel advisory warning for Peru), as well as avoid areas prone to higher levels of crime. President Humala was elected in part on a commitment to reduce crime rate across the country. The current high crime rate has had an impact on his approval ratings. Recent news articles on the country’s crime rate range in terms of violence and include such examples as a prison director being shot and killed while eating dinner, all the way to petty crime increasing against both Peru citizens and tourists alike. SOCIAL CHALLENGES As Peru’s economy grows, and the country opens itself to increased foreign investment, there has been greater struggle around the use and preservation of natural resources. Strikes have been planned and taken place designed to preserve indigenous homes and natural resources (such as the Amazon rainforest). These have increasingly lead to deadly conflict between protestors, authorities and companies. These conflicts have lead to concern that foreign investment may be scared away. Similar to conflicts over natural resources such as the rainforest, Peru increasingly faces challenges of illegal gold mining.

One estimate is that nearly 20 percent of the country’s gold is produced illegally through workers who are unpaid, work under duress and are unable to leave their jobs, according to one study by Massachusetts-based Verite, a fair labor organization. These operations are reportedly under control by large criminal enterprises.

Deal with it Proper policies and training are at the foundation of ensuring your company is prepared to respond to some of these challenges should they arise. Again, as mentioned for issues listed above, if you are doing business in Peru you should be aware of when strikes or protests are scheduled to take place and strictly avoid those areas. Foreign companies should also work to build a strong reputation by working with respected local NGOs and non-profits to help address some of these growing concerns by the Peruvian population. COCAINE AND NARCOTICS Peru is increasing as a hotspot for cocaine and other illegal narcotics. The most densely planted coca region in the world is located in a region of Peru known as the VRAE. Despite the government’s commitment to reducing the levels of drug traffic in the country, the issue continues to last. Some third parties accuse corruption within the countries military and government for the lack of success in fighting the drug trade within the country.

Deal with it Companies should be aware of where the hotspots of drug and narcotics actively takes place, and actively avoid those regions when possible. Similarly for individuals located or doing business in Peru, one must strictly avoid these dangerous, high crime rate areas of the country. Companies must also have global plans designed to address doing business in violent or high crime areas. WWW.ETHISPHERE.COM

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GLOBAL COMPLIANCE

SIX ETIQUETTE TIPS YOU SHOULD KNOW BEFORE YOU GO ATTIRE

BUSINESS MEETINGS

Business meetings are generally conducted in formal attire in Peru. Men should wear formal, dark suits and women should wear comparable formal attire, whether that is a dress or formal slacks.

While it’s important to show up for scheduled meetings on time, Peruvians will often have a less strict adherence to schedules. Anticipate that your counterpart will arrive late to both formal and informal meetings. This should not be taken as a sign of disrespect as it is often not intended as one.

GREETINGS When meeting your counterpart in Peru, it’s customary to introduce yourself with a handshake. As is the case in many Latin American countries, introductions can be much more informal than in other countries, which could include hugs and other embraces. Don’t be surprised if you are met by a Peruvian in a very familiar manner. Similarly, during conversations, Peruvians tend to stand very close to one another and can even frequently touch one another, such as by putting their hands on others’ shoulders (again this is similar to other Latin American cultures). The use of titles is important in Latin American culture, and so if someone has a title such as doctor, the titles should be used when addressing him or her. WWW.ETHISPHERE.COM

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Once a meeting does begin, expect to have informal conversation for some time before starting the business conversation. Peruvians, similar to other Latin American cultures, place emphasis on trust and familiarity between parties in order to further progress business relationships. DINNER AND SOCIAL OCCASIONS More so than with business meetings, anticipate that your counterpart will arrive late for a scheduled social event. This is common in Peruvian culture. Social events are important to reinforce a personal relationship with your Peruvian counterpart as these relationships are important to progress business relationships as mentioned above. During social occasions it is a good idea to avoid conversations about the politics of the coun-

try, religion or a person’s ancestry as these can all be sensitive topics. BUSINESS CARDS As the official language of Peru is Spanish, it is strongly advised that you print one side of your business cards in Spanish. Similar to in other cultures, expect to present your business card to everyone in the room during a meeting. There will generally be no formal expectation in terms of handing your card first to the most senior person in the room. GIFT GIVING Obviously gift giving is a sensitive concern when doing business overseas. Local and international gift giving laws must be adequately reviewed prior to giving gifts to government officials in particular. However in Peru, as is customary in many countries around the world, it is not unusual to bring a gift of nominal value to social events, such as a dinner that takes place at your counterpart’s home. If you intend to bring a gift, common gifts are items such as flowers, wine, or chocolate. It’s also appropriate to bring a small trinket that is representative of your home country. ETHISPHERE \\ 2013 \ Q4 27

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2014

Global GlobalEthics EthicsSummit Summit March 20-21 | Crowne Plaza | New York City March 20-21 | Crowne Plaza | New York City

EnGAGE SEnIOR ExEcuTIvES, lEADInG cORPORATE cOunSEl, AnD TOP GlOBAl, RISK AnD cOmPlIAncE lEADERS AT THE PREmIER GlOBAl cOmPlIAncE AnD ETHIcS EvEnT KEY SPEAKERS • Andreas Pohlmann, Chief Compliance Officer, SNC-Lavalin, Inc. • Daniel Trujillo, Senior Vice President & International Chief Compliance Officer, Walmart International • Dennis Muilenburg, Vice Chairman, Chief Operating Officer, The Boeing Company • Edward Queen, Director, D. Abbot Turner Program in Ethics and Servant Leadership, Emory University Center for Ethics • Elisabeth Gehringer, Senior Vice President, Chief Ethics & Compliance Officer, Realogy Corporation • Gary Sheffer, Vice President, Corporate Communications & Public Affairs, General Electric Company • Hon. Jed S. Rakoff, United States District Judge, United States District Court, Southern District of New York • Kenneth Resnick, Vice President and General Counsel, GE Oil & Gas • Kim McMath, Chief Ethics and Compliance Officer, Freescale Semiconductor • Larry D. Thompson, Executive Vice President, Government Affairs, General Counsel and Corporate Secretary, PepsiCo • Megan Belcher, Vice President & Chief Employment Counsel, ConAgra Foods, Inc. • Randal Milch, Executive Vice President, Public Policy and General Counsel, Verizon Communications • William H. Efron, Northeast Region Director, Federal Trade Commission

HOW TO REGISTER www.globalethicssummit2014.com • 800.308.1700 DOWnlOAD BROcHuRE: http://9nl.be/ges-brochure

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DAy OnE AGEnDA 7:30am - 8:30am

networking Breakfast

8:30am - 8:35am

Welcoming Remarks Ethisphere Introduces the 2014 Global Ethics Summit

8:35am - 9:30am

mODERATED KEYnOTE A Conversation with Leaders

9:30am - 10:25am

SESSIOn 1 The Business Imperative: Role of Leadership in Driving Business Success

10:25am - 10:40am

networking Break

10:40am - 11:35am

SESSIOn 2 Brand, Reputation and Developing Trust

11:35am - 12:35pm

12:40pm - 1:45pm 1:00pm - 1:45pm

SESSIOn 3

Morning Breakout Sessions • Whistleblower Update: Developments in Protection and Bounties in the U.S. and Abroad • Global Anti-Corruption Trends and New Concerns for Your Compliance Program • Ethics and Social Media: Balancing Employee Freedom and Corporate Security

DAy TWO AGEnDA 7:30am - 8:30am

networking Breakfast

8:30am - 8:35am

Opening Remarks

8:35am - 9:30am 9:35am - 10:35am

SESSIOn 1

10:35am - 11:00am

networking Break

11:00am - 12:00pm

SESSIOn 2

networking lunch lunch Keynote The Relationship Between CEO and the GC

2:00pm - 3:00pm

3:00pm - 3:15pm 3:15pm - 4:10pm

SESSIOn 4

Afternoon Breakout Sessions • Data Privacy and Security and the Impact on Reputation • Ethical Communication During an Era of Heightened Transparency • Global Supply Chain and Increasing Transparency

4:10pm - 5:05pm

mODERATED KEYnOTE

mODERATED KEYnOTE Company Culture: A “Bet the Company” Issue?

5:05pm - 5:15pm

closing Remarks

5:15pm - 6:45pm Reception

Global Ethics Summit cocktail

7:00pm - 10:00pm

2014 World’s most Ethical companies Honoree Dinner

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Morning Breakout Sessions • Global Privacy Regulation: A Worldwide Matrix of Potential Pitfalls • Highly Regulated Industries: New Challenges for Already Complex Businesses and Service Providers • Is Compliance Enough? How to Foster Ethical Decision Making from the Top Down

Afternoon Breakout Sessions • Data Audits: Effective Compliance Program Integration • Cultural Considerations for Codes of Conduct • Corporate Responsibility in Creating a Safe Workplace Culture

networking Break Measuring Information that Drives Ethical Leadership

mODERATED KEYnOTE Lessons from a Crisis

12:05pm - 12:55pm

SESSIOn 3 View from the Government

12:55pm - 1:00pm

closing Remarks

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2013’S 100 MOST INFLUENTIAL PEOPLE IN BUSINESS ETHICS

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nce again, as one year ends and another begins, a series of “best of” lists proliferate the Internet and print publications around the world. The field of ethics and governance is not immune from these rankings, and as such Ethisphere is proud to announce the 2013 100 Most Influential People in Business Ethics. This list recognizes 100 individuals that have had a significant and positive impact on the field of ethics, governance and compliance around the world. It features heads of state, academics, business leaders and even the Pope. While each of these individuals have accomplished something (or multiple “things”) that represent a wide range of ethics activity, there is one aspect they all have in common: they’ve all contributed something that progressed the field of ethics and governance.

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Lynelle Cameron

100

Director of Sustainability Autodesk Design and Sustainability

Ben Bernanke

Cameron makes this list on behalf of Autodesk because of the company’s efforts in making a business out of supporting sustainable design start-up companies. The company hopes that its software will help tackle big climate change issues.

Gary Slutkin

MD Founder/ Executive Director Cure Violence Non-Government Organization

Cure Violence is making a huge impact in a handful of U.S. cities, approaching the issue of violence in a unique and innovative light: as a disease. Founder and Executive Director Gary Slutkin developed a violence interruption strategy that provides alternatives to violence, and encourages individuals to cease violence in lieu of more constructive and healthy methods. Cure Violence has targeted neighborhoods throughout New York, Chicago and Maryland, targeting “high-risk” individuals and providing them with outreach workers, made available to those who feel they may commit acts of violence.

Joe Goodwill

Volunteer Team Leader Water for People Non-Government Organization

Joe Goodwill has completed three World Water Corps trips during which he monitored and assessed audits of existing water and sanitation plants. He also led a special project to assess the sustainability of arsenic removal filters. Goodwill also organized Water for People’s participation in the 2013 ING NYC Marathon, with donations going directly to countries in need.

Francisco Cigarroa

System Chancellor The University of Texas System Philanthropy

Under Cigarroa’s leadership, the University of Texas System’s 15 academic and health institutions raised more than $1.2 billion in philanthropy this year.

Laysha Ward

President, Community Relations Target Philanthropy

Ward makes this list on behalf of a number of programs and activities that Target hosted throughout the year. For example, alongside Points of Light and the Martin Luther King Jr. Center for Nonviolent Social Change, Target co-hosted activities during the 50th anniversary of the historic “March on Washington,” including an activity called America’s Sunday Supper at Carter Center in Atlanta (a national movement promoting the idea of diverse individuals sharing a meal, according to a statement by the company) in which President Jimmy Carter and other leaders discussed memories and lessons taught by Martin Luther King Jr. The event also brought together leaders within the community to discuss education, service and youth development.

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Marcela Lopez-Macedonio

Executive Director The Resource Foundation Non-Government Organization

The Resource Foundation (TRF), in partnership with the Caterpillar Foundation, announced a $3 million donation to reach more than 11,000 children in Latin America and the Caribbean over three years. The program started in January of 2013 and, through a regional strategy targeting specific communities in 10 countries, seeks to improve academic achievement, gender equality and life skills among adolescent boys and girls from 54 different schools.

Philippa Foster Back

Director Institute of Business Ethics (IBE) Business Leadership

Foster Back continued to oversee IBE in 2013, which has published more than 50 books on business ethics, developed training programs in business ethics and worked with academics and business schools to promote the study of ethics within MBA curriculum.

Gary White (tie)

92*

Founder Water.org Philanthropy

White, alongside co-founder Matt Damon, in 2013 suggested new approaches for providing sanitary water to people worldwide. White discusses his proposed model in his book with Damon, The World in 2014. Water.org has the support of well-known companies such as PepsiCo and SAB Miller.

Chevenee Reavis (tie)

92*

Director, Strategic Initiatives Water.org Philanthropy

Reavis leads global advocacy efforts of Water.org and the New Venture Initiative, an incubator designed to foster a supportive culture of innovation and realize new opportunities that enable Water.org to achieve its goal of universal access to safe water.

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Ben Bernanke

Charles Elson

Chairman United States Federal Reserve Government and Regulatory

Ben Bernanke makes this list as 2013 marks his final full year of holding his current position within the Federal Reserve. It was anything but a lame duck session for Bernanke, as the Fed Chairman continued to wield his influence over the global economy (and therefore the business community and its behavior).

Dave Stangis

Vice President, CSR and Sustainability Campbell Soup Company Design and Sustainability

Campbell has been involved with countless community sustainability initiatives this year, most notably Stamp Out Hunger, which collected more than 1.2 billion pounds of food since its inception. Additionally, Campbell launched a salsa that brought in $100,000 for the Food Bank of South Jersey and saved nearly one ton of peaches from going to a landfill.

Lisa M. Borders

Chair Coca-Cola Foundation Design and Sustainability/Philanthropy

The Coca-Cola Foundation awarded $8.1 million to 47 community organizations. As a result, 3.8 million people worldwide will have increased access to personal well-being, environmental and community empowerment programs.

William Crane

Crane makes the list after receiving the lifetime achievement award from Corporate Secretary for his work at the helm of Georgeson as the company’s former chairman.

86*

Professor INSEAD Business School Academics

Renée makes this list alongside W. Chan Kim (above) for the numerous articles, and a book, Blue Ocean Strategy, that the two have co-authored. Numerous businesses, nonprofits and governments are now using the methods Mauborgne proscribed.

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Assistant General Counsel BCE/Bell Canada Governance

Dussault makes this list after his company, BCE, was recognized in 2013 as having the best overall governance program by the Canadian Society of Corporate Secretaries. Dussault, as corporate secretary, accepted the award on BCE’s behalf.

Professor INSEAD Business School Academics

W. Chan Kim, alongside Renée Mauborgne, has written numerous articles and a book, Blue Ocean Strategy, that lays out a system for developing and executing large-scale plans. Numerous businesses, nonprofits and governments are now using the approach, including the Malaysian government.

86*

Alain Dussault

Fethullah Gülen

Renée Mauborgne (tie)

Chair in Corporate Governance University of Delaware Academics

Charles Elson, someone who has appeared on Ethisphere’s 100 Most Influential People in Business Ethics list for multiple years, continued in 2013 to be one of the leading voices on corporate governance and proper behavior by companies.

Former Chairman Georgeson Governance

W. Chan Kim (tie)

Charles Elson

Writer, scholar Turkey Thought Leadership

Gülen preaches a message of tolerance in the name of the Islam religion, and has prompted conversations with both the Vatican and numerous Jewish organizations. Several schools have been founded by Gülen’s followers in an estimated 140 countries. He also founded the Gülen movement.

Adriana Machado

CEO General Electric, Brazil Design & Sustainability/Business Leadership

General Electric launched a new sustainability initiative in Brazil this year. The initiative identifies social, environmental and economic challenges to GE in the region, and incorporates sustainability principles into the local business strategy, processes and culture.

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Jackie Lynn Coleman Adriana Machado

President and CEO National Community Tax Coalition Non-Government Organization

Combining philanthropic dollars with volunteer hours and expert training, the National Community Tax Coalition, alongside Citi, make financial aid accessible to low-income families. Coleman makes this list for her role leading the organization.

Matt Kelly

Editor-in-Chief Compliance Week Media and Whistleblowers

Compliance Week is one of the leading publications targeting compliance and legal executives. The organization has hosted and published a number of well-respected magazines and events that help elevate the compliance profession.

Marty Mulloy

Kenneth Macharia (tie)

80*

E. Africa Business Dev. and Comm. Manager Acumen Non-Government Organization

In partnership with Dow Jones, Acumen hosted the Technical Assistance (TA) Initiative Summit in Nairobi, Kenya in Q2 2013. The Summit signaled the start of the TA Initiative that aims to accelerate the development and distribution of crucial products and services in agriculture, water, sanitation and energy across East and West Africa.

Ross McLean (tie)

80*

Dir. Business Development, Africa & Middle East Dow Jones Philanthropy

McLean makes this list because of Dow Jones’ partnership with Acumen, as listed above, hosting the Technical Assistance (TA) Initiative Summit in Nairobi, Kenya in Q2 2013. The Summit launched the two organizations’ goal of accelerating the development and distribution of crucial products and services in agriculture, water, sanitation and energy across East and West Africa.

Ken Daly

President, CEO National Association of Corporate Directors Governance

NACD is an influential governance organization and so when they highlight the important link between pay and performance, as they did in 2013, company leaders understand that this is the new normal.

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Vice President, Labor Affairs Ford Motor Company Corporate Culture

Mulloy lead a safety initiative program this year that focused on child safety programs in Ford’s plant communities across the country. Among other aspects, the program provides kits to the communities which includes an inkless fingerprint function that is designed to keep an identification record. The program aspires to provide every child in the U.S. with an identification record. The program was rolled out in cooperation between Ford and the United Autoworkers Union.

Glenn Greenwald

Reporter The Guardian Whistleblowers and Media

Greenwald was the most aggressive reporter covering U.S. government leaks in 2013, including combing through the wiki leaks releases from previous years and the Snowden revelations around the NSA. Several major international news outlets, but primarily the Guardian newspaper in the UK, picked up his stories. His reports about the NSA resulted in several major companies reviewing, and ultimately changing, their privacy policies. Both Greenwald’s articles and the larger accusations around data privacy remain controversial, however it is undeniable that Greenwald’s writing will continue to have a significant impact around the world.

Philippe Le Houérou

Vice President, South Asia Region World Bank Group Non-Government Organization

The World Bank Group released a study late this quarter that revealed women are more likely to die in natural disasters than men. The World Bank launched a program that aims to improve women’s odds of survival in the event of natural disasters. Specifically, a survey for the World Bank’s fund for the poorest countries, the International Development Association, inventories cyclone shelters and provides fresh data on emergency preparedness in vulnerable regions of Bangladesh.

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Timothy Smith

Monique Villa

Director of ESG Engagement Issues Walden Asset Management Investment and Research

Smith wrote a letter this year to the SEC detailing Walden’s support of a proposed rule under Dodd-Frank, calling for each company to include in its proxy a comparison of the CEO pay package and the median employee pay.

Michael Hawthorne (tie)

70*

Reporter Chicago Tribune Whistleblowers and Media

Hawthorne, along with Callahan and Roe, reported a series of articles for the Chicago Tribune in 2012 around ineffective flameretardants that companies offered. This year, the three of them collectively earned the Pulitzer Prize for their reporting around product safety/liability, an important issue for all companies.

Sam Roe (tie)

70*

Reporter Chicago Tribune Whistleblowers and Media

Roe, along with Callahan and Hawthorn (above), made this list for their reports on allegations of ineffective flame-retardants being offered by companies to the public. This year, the three journalists collectively earned the Pulitzer Prize for their reporting around product safety/liability, an important issue for all companies.

Patricia Callahan (tie)

70*

Reporter Chicago Tribune Whistleblowers and Media

Callahan, along with Roe and Hawthorne (both listed above), made this list after earning the Pulitzer Prize for their reporting around product safety/liability, which remains an important issue for all companies. The three raised allegations of ineffective flameretardants being sold by companies to the general public.

Matthew W. Patsky

Managing Partner, CEO & Portfolio Manager Trillium Asset Management Investment and Research

Trillium Asset Management offers one of the leading socially responsible investment funds. Patsky makes this list for his work in 2013 leading the company’s “Sustainability Opportunities” strategy.

Liz Maw

CEO Net Impact Thought Leadership

Net Impact continues to be one of the leading advocacy groups supporting business ethics and training a new generation of leaders with a focus on ethical behavior. The organization is particularly active in universities across the U.S.

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Karen Becker

Chief Compliance Officer - Funds Calvert Investments Investment and Research

Calvert is a company that is regularly recognized on Ethisphere’s 100 Most Influential People in Business Ethics list. Becker makes the list this year for her work in 2013 managing and implementing organization grants and ensuring federal securities law cooperation, among other areas.

Donald Gale

Whistleblower - Former Manager Omnicare Pharmacy Whistleblowers and Media

A loyal employee of Omnicare for 17 years, Gale came forward alleging that Omnicare took part in a kickback scheme, where Omnicare offered pricing approaches for nursing homes to refer patients to the Medicare Part D program, where the Cincinnatibased company could recover higher fees for drugs and pharmacy services. Medicare has outlawed the approach since 1999.

Monique Villa

Chief Executive Officer Thomson Reuters Foundation Thought Leadership

The Thomson Reuters Foundation is a leading non-profit organization focusing on corporate responsibility and sustainability initiatives. Villa makes this list in 2013 for her work leading the organization, including overseeing activities such as empowering women in developing countries and supporting CSR activities.

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Jamie Howland

Director:Climate and Energy Analysis Center Environment Northeast (ENE) Design and Sustainability

ENE is a nonprofit organization that researches and advocates innovative policies that tackle environmental challenges while promoting sustainable economic development. Howland serves as the director for many of ENE’s state and regional efforts to combat global warming with solutions that promote clean energy, clean air and healthy forests.

Marjorie Doyle

Advisory Board SCCE Thought Leadership

Doyle is a well-recognized thought leader in the ethics and compliance space and continued to provide best in class advice to companies and organizations throughout 2013.

Scott Davis

CEO UPS Design and Sustainability

Davis makes this list in 2013 for overseeing UPS’ status as a sustainability leader, including improvements in the fuel efficiency of the UPS air and ground fleet and deployment of the industry’s largest alternative fuel fleet.

Michael Woodford

Woodford made this list in previous years, and is back again in 2013 not because of his original whistleblowing, but because he has been on the conference circuit promoting his situation, creating a “second act” in his career.

Noynoy Aquino

Associate Director, Division of Enforcement U.S. Securities and Exchange Commission Government and Regulatory

Friestad was a part of the team that lead the probe into Diebold for bribing foreign officials, spending nearly $1.8 million on travel, gifts and entertainment, to retain business in China and Indonesia. Diebold has agreed to pay more than $48 million to settle the SEC’s charges.

Michael Woodford

President Philippines Government and Regulatory

Aquino makes this list in 2013 for his effort in passing a new reproductive-rights law in the Philippines.

Lee Augsburger

Board Chair Ethics and Compliance Officer Association Business Leadership

ECOA is one of the most influential ethics and compliance membership associations. Augsburger makes this list for his work as the chair of the organization.

Hannah Jones

Scott W. Friestad

Former CEO Olympus Media and Whistleblowers

V.P., Sustainable Business & Innovation Nike Design & Sustainability/Business Leadership

Jones has lead Nike’s Sustainable Business & Innovation (SB&I) model to much success and praise. Her goal for SB&I is to enable both the company and its consumers to thrive in a sustainable economy, equal parts planet, people and profit.

Raj Sisodia (tie)

55*

Professor Babson College Thought Leadership

Professor and Conscious Capitalism, Inc. co-founder Raj Sisodia, along with John Mackey (below), in 2013 published the book Conscious Capitalism: Liberating the Heroic Spirit of Business, which argues for the inherent good of both business and capitalism. The book illustrates how these two forces can work most powerfully to create value for all stakeholders: including customers, employees, suppliers, investors, society, and the environment.

John Mackey (tie)

55*

CEO Whole Foods Thought Leadership

Mackey and professor and Conscious Capitalism, Inc. co-founder Raj Sisodia (above) published Conscious Capitalism: Liberating the Heroic Spirit of Business, which features insight from some of today’s best known companies as to how both business and capitalism can work together to benefit and create value for companies’ many stakeholders.

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Edmund J. Cain

Vice President, Grant Programs Conrad N. Hilton Foundation Design and Sustainability/Philanthropy

Roy Snell

The Conrad N. Hilton foundation awarded $38.2 million in grants to 33 organizations. This year, the foundation reached $1 billion in total grant making since 1944. The foundation focuses on children affected by HIV and AIDS, helps to foster youth, and works to prevent homelessness and substance abuse.

Joe Murphy

Of Counsel Compliance Systems Legal Group Thought Leadership

Joe Murphy is one of the most well-respected thought leaders in the ethics and compliance space. In 2013 he continued to advise clients on best practices in ethics programs.

Jack Palmer

Whistleblower Infosys Whistleblowers and Media

Palmer had been punished and sidelined by company executives after he reported witnessing widespread visa fraud. He brought the lawsuit in 2011 that spurred the federal investigation into Infosys’ visa procedures this year.

Mark Pieth

Chairman, Working Group on Bribery Organization for Economic Cooperation & Dev. Government and Regulatory

Pieth’s last year as Chairman of OECD’s Working Group on Bribery was in 2013. Under his leadership, and the OECD’s guidance, a number of countries enacted new anti-corruption laws, including influencing in part Brazil’s recent anti-corruption law earlier this year.

Roy Snell

Roy Snell leads the Society of Corporate Compliance & Ethics, the leading individual membership organization for corporate compliance officers.

Adam Kronk

Executive Director Business Civic Leadership Center Business Leadership

The BCLC, now known as the Corporate Citizenship Center, continues to hold companies accountable for sustainable business across the globe. The organization has throughout 2013 successfully advocated for stronger sustainability programs from companies.

Clayton Christensen

Company Chair Action Environmental Group Design and Sustainability

The Action Environmental Group is an organization focused on environmental services across New York. Under DiBella, one of the organization’s leaders, Action Environmental Group opened its first state of the art material recovery facility in New York. The facility will increase the recycling of valuable materials, and influence the way that companies across New York contribute solid waste to the environment around the state.

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Professor Harvard Business School Academics

Christensen is known for his publications around business innovations, including his New York Times best selling novel, The Innovators Dilemma, and also released a book that offers inspiration and insight for how people can achieve fulfilling lives, outside of the business world.

Michael DiBella

Program Director Deloitte Center for Ethical Leadership Academics

Kronk leads the Deloitte Center for Ethical Leadership at Notre Dame. Both the Deloitte Center and the university itself are leading organizations focused on business values and leadership. The Center’s mission is to connect academic and business thought leaders to explore ethical issues.

Marc DeCourcey

CEO Society of Corporate Compliance & Ethics Non-Government Organization

R. Edward Freeman

Academic Director Business Roundtable Institute for Corp. Ethics Academics

Freeman is the academic director of the Business Roundtable Institute for Corporate Ethics. He is a senior fellow of the Olsson Center for Applied Ethics at the University of Virginia Darden School of Business. Freeman is also a director of the Conscious Capitalism organization, which focuses on company benefits and purposes outside of the profit margin.

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Tim Cook

Ronald Berenbeim

CEO Apple Business Leadership

Cook spoke publicly about his support for the recently approved Employment Nondiscrimination Act in the form of an op-ed for The Wall Street Journal, stating his company’s feelings toward the current issue of workplace equality in the United States.

The Conference Board puts out multiple reports annually that highlight different countries’ economic index, worldwide, ranging from the United States to India and Germany.

Dr. Sima Samar

Georg Kell

Executive Director United Nations Global Compact Thought Leadership

UN Global Compact recently announced its Global Anti-Corruption Initiative (GACI) to fight extortion and corruption across borders to launch in January 2014 alongside partner International Road Transport Union (IRU). GACI will analyze anti-corruption in the transport and logistics industry along major international trade routes in Eurasia, Africa, and Latin America.

Professor, Civil & Environmental Engineering Stanford University Design and Sustainability

Professor Jacobson is a thought leader in the sustainability and environmental fields and, through his work at Stanford University, has created a policy framework that aims to create a future that is powered primarily by renewable energy. His extensive research in both New York and California has provided a postive, alternative future for energy.

Dr. Hau L. Lee

Director SISSCR* Academic

SISSCR aims to provide understanding and clarity around the relationship between responsible practices and supply chain performance, and to explore the relationship between social and environmental practices and intellectual property protection. SISSCR also provides a robust database of research for anyone who wishes to further his or her knowledge on the subject. *Stanford Initiative for the Study of Supply Chain Responsibility

Michael Stevens

37 Huguette Labelle

Chair Afghan Independent Human Rights Commission Thought Leadership

Dr. Sima Samar is an internationally celebrated advocate for human and women’s rights and makes this list for her tireless efforts in 2013 to improve living conditions around the world.

Dr. Mark Z. Jacobson

Senior Fellow The Conference Board Business Leadership

Washington State Director The Nature Conservancy Non-Government Organization

The Nature Conservancy began construction on a $16 million project that will reduce the risk of floods throughout the Puyallup River valley, create a new habitat for salmon and produce more than 230 local jobs. Stevens is spearheading the project that will provide clean water, more salmon and an overall healthier, more livable community.

Steve Holmes

Chairman and CEO Wyndham Worldwide Business Leadership

Wyndham received the 2013 Innovation Award from Kids in Need of Defense (KIND) for its pro bono work in providing legal counsel to unaccompanied refugee and immigrant children in the U.S.

Pamela Passman

President CREATe.org Non-Government Organization

Center for Responsible Enterprise and Trade (CREATe.org) is a non-profit organization dedicated to helping companies, their suppliers and business partners reduce counterfeiting, piracy, trade secret theft and corruption.

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Huguette Labelle

Chair of the Board Transparency International Non-Government Organization

Every year, Transparency International’s Corruption Perceptions Index is cited more and more frequently in major media, and business conferences around the world. Labelle makes the list again this year for her role in promoting the work of Transparency International worldwide.

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Dave Gilboa (tie)

33*

Co-founder and Co-CEO Warby Parker Business Leadership

Chelsea Clinton

Gilboa, alongside close friend and former university classmate Neil Blumenthal (below), co-founded Warby Parker, which donates a free pair of glasses to someone in need for every pair purchased. As the company expands, the two said they intend to make more hires targeting millenials.

Neil Blumenthal (tie)

33*

Co-founder and Co-CEO Warby Parker Business Leadership

Blumenthal, and close friend and fellow University of Pennsylvania graduate Dave Gilboa (above), co-founded Warby Parker. The company has made a reputation for itself through corporate responsibility programs, including donating a free pair of glasses to someone in need for every pair purchased.

Dr. Cory Heyman

Chief Program Officer Room to Read Non-Government Organization

Room to Read’s mission is to provide children in underserved communities worldwide with the opportunity for a better education, beginning with literacy and gender equality. This year, Room to Read announced a partnership with The Asia Foundation, which will provide children’s literature in local languages to a network of schools and libraries in the region.

Jochen Zeitz (tie)

30*

Director & Chairman* Kering Non-Government Organization

Zeitz, alongside Richard Branson (below), co-founded the B Team, which launched in June 2013 as a not-for-profit initiative. The group’s incentives and leadership are wrapped around a vision for a world “in which the purpose of business is to be a driving force for social, environmental and economic benefit.” The organization says it will focus on execution and action. *Director &Chairman, Sustainable Development Committee

Richard Branson (tie)

30*

CEO Virgin America Business Leadership

Branson and Jochen Zeitz (above) co-founded the not-for-profit B Team, which launched in June 2013. The group’s incentives and leadership are wrapped around a vision for a world “in which the purpose of business is to be a driving force for social, environmental and economic benefit.” The organization aspires to build a global community of advisors and partners. While Branson and Zeitz are the founders and co-chairs of the B Team, many other senior business leaders and well-respected organizations were involved in the formation of the organization, including Virgin Unite (initial incubator of the B Team), The Rockefeller Foundation, The Tiffany & Co. Foundation, Havas, Kering/PUMAVision, Derek Handley (founding CEO), Strive Masiyiwa and Joann McPike.

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Drago Kos

Chair OECD Anti-Bribery Working Group Government and Regulatory

Kos makes this list as the second individual from the OECD’s AntiBribery Working Group. Kos is recognized after he was appointed as the new chair of the Working Group in 2013. He will be taking over from Pieth, recognized earlier on this list.

Benjamin Zachary Bronfman

Strategic Advisor, Principal Global Thermostat Design and Sustainability

Bronfman makes the list this year for his role with Global Thermostat, an organization dedicated to environmental sustainability initiatives. Global Thermostat invested in technologies that play a key role in the reduction of climate change impact.

Patrick Li

Judge Hong Kong High Court Government and Regulatory

Li makes this list after he sentenced Ma Sin-chi, the former Deutsche Bank managing director in Hong Kong, to seven years in jail after accepting HK$24.8 million (U.S.$3.2 million) in bribes. The sentence sent a clear message to industry throughout Hong Kong.

Chelsea Clinton

Vice Chair Clinton Foundation Design and Sustainability

The Clinton Foundation is responsible for designing programs alongside the Clinton Global Initiative to respond to climate change. Most notably, this year the Clinton Foundation offered support to those communities impacted by Hurricane Sandy. Chelsea Clinton played a key role in the Foundation’s work this year.

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David Meister Pope Francis

Former Director of Enforcement U.S. Commodity Futures Trading Commission Government and Regulatory

Meister played a crucial role in the investigation into Rabobank, the Dutch lender, for its role in rigging global benchmark interest rates. The settlement with Rabobank is the second-largest agreement in the U.S.

Travis Tygart

John O’Hara

Vice President of Logistics Kruger Products Design and Sustainability

Kruger Products has initiated, implemented, and proven a corporate commitment to greening its supply chain, in addition to reducing its carbon footprint.

Monika Mitchell

Founder, CVO (Chief Visionary Officer) Good Business International Non-Government Organization

Monika is an internationally known business ethics and women’s leadership expert. She is a member of the United Nations Global Compact and founding member of the NGO Values & Business Working Group where in 2013 she focused on economic empowerment for women in developing nations.

Dr. Paul Farmer

Founder Partners In Health Non-Government Organization

“The idea that some lives matter less is the root of all that’s wrong with the world.” —Dr. Paul Farmer. Partners In Health spent the last year providing food, healthcare and words of empowerment to communities in need all across the globe. It has established free clinics in Haiti, Rwanda, Lesotho, Malawi, Mexico, Russia, Peru and Kazakhstan.

Faruque Ahmed

Executive Director BRAC* International Non-Government Organization

Mr. Ahmed is responsible for leading and implementing many of BRAC’s successful and innovative health strategies and initiatives. Most recently, BRAC has been recognized for its extensive work in Bangladesh, with more than 100,000 employees. BRAC, alongside other NGOs, organized village schools and community healthcare, vaccinations, family planning, and tuberculosis treatment, while targeting the country’s underprivileged groups, primarily women and children and more rural areas. *Bangladesh Rural Advancement Committee

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CEO U.S. Anti-Doping Agency Business Leadership

Tygart brings new meaning to the term “playing fair”, by dedicating his work to protecting those athletes who are morally and ethically conscious, versus those who are not. Tygart was an advocate against Lance Armstrong during his trial, and continues to play hardball against any athlete who dopes up.

Mark Steward

Executive Director Hong Kong Securities and Futures Commission Government and Regulatory

Steward led the enforcement against Du Jun, the former Morgan Stanley Asia managing director. In the first ever restoration orders made by the court in a case of insider trading, Jun will pay $23.9 million to 297 investors.

Pope Francis

Pope Catholic Church Corporate Culture

Not the first pope to be listed on the 100 Most Influential People in Business Ethics. While he doesn’t lead a company, he has had a real impact on the culture of a very old, and very large institution. Business leaders can take a lesson from Pope Francis’ approach to improving a reputation and culture of a very large, well-established organization (in this case, the Catholic Church).

Anna Hazare

Social Activist India Thought Leadership

Anna Hazare is one of India’s most renowned social reformers. On top of his tireless advocacy for stronger anti-corruption measures in India, Hazare started a political party in 2013. He continues to be a leading voice within the world’s largest democracy.

Vinicius Marques de Carvalho

President Admin. Council for Economic Defence, Brazil Government and Regulatory

Under Carvalho’s leadership, The Brazilian Administrative Council for Economic Defence (CADE) entered into a settlement with Brazilian OGX Petroleo e Gas Participacoes oil company for completing the purchase of an offshore oil concession.

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COMPLIANCE AND ENFORCEMENT

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Sheryl Sandberg

Chief Operating Officer Facebook Business Leadership

Sheryl, aside from becoming the public face of Facebook, wrote an incredibly inspirational book this year (Lean In: Women, Work and the Will to Lead). Sheryl is advocating women in leadership positions and diversity, and is spearheading the way.

Richard Kyle

U.S. Senior District Judge U.S. District Court, District of Minnesota Government and Regulatory

Kyle sentenced James Fry to more than 17 years in prison for his role as a key financial resource to former Wayzata businessman Tom Petters and his $3.65 billion Ponzi scheme. The sentence came after Fry’s conviction of 12 counts of fraud by the SEC.

Benjamin M. Lawsky

Superintendent New York Department of Financial Services Business Leadership/Government & Regulatory

Anonymous Whistleblower

As the Superintendent of Financial Services, Lawsky’s priority is to hold financial institutions accountable for unethical misconduct. Lawsky played an instrumental role in the Royal Bank of Scotland scandal involving payments to sanctioned nations. R.B.S will pay a $100 million fine, $50 million of which will go directly to the New York State Department of Financial Services.

Elon Musk

CEO & Chief Product Architect Tesla Motors Business Leadership

Musk is the new breed of entrepreneur turned billionaire, investing his time and money into big projects that will have a meaningful impact on mankind in 2013.

Joaquim Barbosa

Joaquim Barbosa was a jurist who last year presided over the country’s largest political-corruption trial and then became the first black president of Brazil’s Supreme Court.

John Terzaken

Director of Criminal Enforcement (Former) U.S. Department of Justice Government and Regulatory

In the summer of 2013 Terzaken announced that the Department of Justice issued $1 billion in antitrust fines. The auto parts industry and Libor scandals received the bulk of the penalties this year, the total amount of which was increased over 2012.

Joaquín Almunia

Executive Chairman Google Business Leadership

Schmidt makes this list for advocating against improper data collection by government authorities. Since the recent NSA stories came to light, Schmidt has been busy discussing ways to review and implement new protections from Google in order to prevent his company from collecting “too much” information from its users.

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Vice President European Commission Business Leadership/Government & Regulatory

Almunia lead the probe into the European rate rigging scheme involving RBS, Citigroup and J.P. Morgan, among others. The banks have been fined by the commission a record €U.S.$1.7 billion over benchmark interest rate rigging.

Eric Schmidt

President Brazil Supreme Court Government and Regulatory

Anonymous Whistleblower

Whistleblower SEC Whistleblowers and Media

The SEC issued its largest ever whistleblower payment, $14 million, in 2013 to an anonymous whistleblower who blew the whistle on an undisclosed company. Transparency questions aside, the increased whistleblower awards - and the willingness to make payments without disclosing recipients - have encouraged many companies to revamp their hotline programs, training and communications plans.

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“THERE HAS BEEN NO SHORTAGE OF DISCUSSION AROUND THE EXTENT OF THE IMPACT OF THE NEW RULE, OR WHETHER THE RULE HAS BEEN AMENDED ONE TOO MANY TIMES, BUT THERE IS NO DENYING THAT IT WILL, IN FACT, HAVE AN IMPACT ON FINANCIAL INSTITUTIONS.” Sean McKessy

Chief, Office of the Whistleblower SEC Office of the Whistleblower Government and Regulatory

The SEC created its whistleblower office in 2011, but in 2013 it continued to set precedence. Specifically, the SEC awarded a $14 million payment to an anonymous whistleblower, recognized here, which set a precedent that incentivizes employees who have witnessed bad behavior to come forward.

Eric H. Holder Jr.

Attorney General United States Department of Justice Government and Regulatory

This year, the Department of Justice announced a $13 billion dollar settlement (the largest settlement agreement to date) with J.P. Morgan over the bank’s mortgage practices following the financial crisis. Attorney General Eric H. Holder Jr. played a crucial role in reaching the settlement with JPMorgan Chase’s chief executive.

Mary Jo White

Chair Securities and Exchange Commission Government and Regulatory

The SEC announced this year that in certain settlements companies can no longer “neither admit nor deny guilt.” Instead, they will have to admit their guilt in certain circumstances.

Brad Smith

Executive Vice President, General Counsel Microsoft Business Leadership

After the NSA leaks, Smith took to his blog to explain in detail the company’s plan to restore confidence in user privacy, and assure users that Microsoft would be protected against government snooping by promising to increase its use of strong encryption, enforce legal protections to customer privacy, and increase the transparency of its own code.

Dinesh Thakur

Whistleblower Ranbaxy Whistleblowers and Media

Ranbaxy paid a $500 million settlement in 2013 as a result of Thakur blowing the whistle on alleged False Claims Act violations. This resulted in the highest whistleblower payment of 2013 at $48.6 million going to Thakur.

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1 Paul Volcker Chairman of the Economic Recovery Advisory Board The United States Government Government and Regulatory Volcker makes the top spot this year for his eponymous “Volcker Rule,” which was approved to go into effect this year as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. There has been no shortage of discussion around the extent of the impact of the new rule, or whether the rule has been amended one too many times, but there is no denying that it will, in fact, have an impact on the structure and behavior of financial institutions around the world.

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SPECIAL FEATURE

A YEAR IN REVIEW

A Transformative Year In Whistleblowing & Retaliation Written by Steven J. Pearlman Illustration by Steve Tansley 2013 was a transformative year in the whistleblower world, as the stakes rose while two prominent whistleblower laws— Section 806 of the Sarbanes-Oxley Act (SOX) and Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)—took shape. Some of the key whistleblower events that occurred this year include the following: the Securities and Exchange Commission (SEC) issued a bounty exceeding $14,000,000; the Supreme Court heard argument in the first SOX whistleblower case to reach that level; a circuit split deepened regarding the scope of protected activity under SOX, which means that issue, too, could ascend to the Supreme Court; and the Occupational Safety and Health Administration (OSHA) issued awards exceeding $1,000,000 in whistleblower cases. These events are clear and unmistakable signs of things to come for employers in 2014 and beyond. Employees across industries have gained a greater awareness of their rights and potential remedies under myriad whistleblower laws as a result of a variety of factors, such as the SEC’s effective efforts to publicize its whistleblower bounty program and media focus on international whistleblower matters. Employees received further encouragement from a range of judicial and administrative awards, substantial settlements and other relief. And the plaintiffs’ bar, which has grown in sophistication in this space as the stakes have risen, smells blood in the water. DODD-FRANK GAME-CHANGERS A. Whistleblower Retaliation Although the Dodd-Frank whistleblower protection provision is still fairly new, having been enacted in 2010, it took shape in 2013 in the following ways: First, 2013 saw numerous judicial battles over the scope of protected activity under the Dodd-Frank anti-retaliation provision. Multiple district courts ruled that to qualify for protection under that provision, an individual need not report directly to the SEC. However, this year, the first federal circuit court to tackle this issue departed from that approach. Specifically, on July 17, 2013, the Fifth Circuit ruled that an individual must complain to the SEC to be protected under the Dodd-Frank whistleblower retaliation provision. Following that decision, though, another district court reached the contrary conclusion. It is likely that this issue will percolate up to another federal circuit court, with

a potential circuit split looming in 2014. The Supreme Court thus could be called upon to resolve this dispute sometime soon. This debate led to the question of whether a narrow interpretation of the Dodd-Frank anti-retaliation provision is appropriate as a matter of policy. The plaintiffs’ bar maintains that employers have fervently argued that Dodd-Frank, principally through its bounty provision, has the undesirable effect of encouraging employees to bypass internal compliance channels, and a narrow interpretation requiring a report to the SEC will have the effect of heightening the likelihood that employees will not use internal compliance channels. In other words, they submit, the Fifth Circuit’s approach leaves individuals who only report internally without a remedy. Much to the contrary, however, Section 806 of SOX provides the whistleblower who purports to have been retaliated against for reporting a securities violation internally with a robust remedy. Accordingly, one reasonably may conclude that this is not a realistic concern. Second, this year, the Chief of the SEC Office of the Whistleblower made clear that the SEC believes it has the authority to pursue a whistleblower retaliation claim under Dodd-Frank, and that it is apt to do so. To illustrate, in a September 24, 2013 interview with the Wall Street Journal - Risk and Compliance Journal, he said:

We are actively looking for ways to be proactive in pursuing, under appropriate circumstances, a retaliation claim, either as an add-on to an instance where there was substance to the underlying report, but also if we are given evidence that a person reported to us in good faith and it turned out that they were wrong, but they had reason to believe that what they reported to us was true and the company took unfortunate employment action just because they reported to us. Litigating an employment retaliation claim against the SEC is sure to be a unique challenge, the specter of which will catch the attention of employers (as well as both sides of the bar). Third, in 2013, a federal district court erected a high barrier to the extraterritorial application of the anti-retaliation provision. Specifically, on October 21, 2013, the Southern District of New York ruled in Liu v. Siemens A.G. that Dodd-Frank has no extraterritorial application. It added that a complaint regarding a violation of the Foreign Corrupt Practices Act (FCPA) does not amount to protected activity under Section 806 of SOX. These

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rulings are a boon to employers faced with whistleblower complaints by individuals located overseas, many of which often involve allegations of bribery of foreign officials. Lastly, on November 12, 2013, the Northern District of Georgia ruled in Pruett v. BlueLinx Holdings, Inc. that Dodd-Frank whistleblowers are not entitled to a jury trial or punitive damages. This first-impression decision is likely to impact the valuation of Dodd-Frank whistleblower claims. Employers are likely to capitalize on it in the litigation and settlement contexts, as it eliminates the inherent risks attendant to a jury trial. It remains to be seen whether this decision will have the effect of encouraging whistleblowers to pursue their claims before the U.S. Department of Labor (DOL) rather than in federal court. B. Bounties Who can forget the 1980’s catchphrase “where’s the beef”? Many were asking that question when evaluating the DoddFrank bounty program … until September 30, 2013, that is. On that date, the SEC issued a bounty exceeding $14,000,000 to a tipster who provided details that led to a substantial recovery of investments in an enforcement action. Prior to that, the SEC’s awards were fairly modest: in August 2012, an award of approximately $50,000 was issued; and in August and September of 2013, the SEC gave awards in the neighborhood of $125,000. It is plausible this award will engender an influx of tips, as it exposes the enormity of the potentially available whistleblower jackpot. Query whether this will lead to a “lottery” dynamic, and consider how such a dynamic could drain the SEC’s resources and compromise the effectiveness of the bounty program. The expected implications of the September 30, 2013 award are not reflected in the SEC November 15, 2013 Annual Re-

port on the Dodd-Frank Whistleblower Program to Congress (Annual Report). Instead, that report shows an 8% rise in tips originating from all over the globe. Though the Annual Report provides a number of categories into which complaints have fallen, a significant number of the tips are categorized by the SEC as “other,” which makes it difficult to determine their nature. A major concern remains in 2013 and beyond: the bounty program still encourages employees to bypass internal corporate compliance channels. Such circumvention is problematic, as it could cause investigations to become delayed, which could lead to the loss of evidence and the maturity of fraudulent schemes. Though the SEC indicated that it will favorably consider internal reporting when fashioning awards (by statute, the SEC may exercise discretion to give the complainant a cut of 10% to 30% of its recovery), the orders reflecting the awards issued thus far do not indicate whether the recipients reported internally, nor does the Annual Report. Thus, it is a must that employers take concerted steps to heighten the likelihood that employees will report internally. SOX WHISTLEBLOWER LANDSCAPE SOX whistleblower litigation continues to proliferate in the wake of employee-friendly decisions rendered by the Administrative Review Board (ARB) of the DOL under the Obama Administration. The following highlights key events that profoundly impacted the SOX whistleblower landscape. A. OSHA’s Shot Across The Bow Some find it surprising that OSHA investigates claims under and enforces over 20 whistleblower laws, including SOX. In 2013, OSHA sent a loud and clear message that it will vigorously enforce these laws in the face of perceived violations.

A MAJOR CONCERN REMAINS IN 2013 AND BEYOND: THE BOUNTY PROGRAM STILL ENCOURAGES EMPLOYEES TO BYPASS INTERNAL CORPORATE COMPLIANCE CHANNELS. SUCH CIRCUMVENTION IS PROBLEMATIC, AS IT COULD CAUSE INVESTIGATIONS TO BECOME DELAYED, WHICH COULD LEAD TO THE LOSS OF EVIDENCE AND THE MATURITY OF FRAUDULENT SCHEMES.

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IF THE COURT SIDES WITH THE EMPLOYEES’ POSITION, THE EMPLOYEES OF MILLIONS OF PRIVATE COMPANIES THAT ARE CONTRACTORS TO PUBLIC COMPANIES MAY HAVE NEW CAUSES OF ACTION. THIS DECISION RAISES THE QUESTION OF WHETHER THE SUPREME COURT WILL GIVE DEFERENCE TO THE ARB.

Specifically, on September 30, 2013, OSHA awarded more than $1.9 million to a company’s former CFO based on its finding that the company violated Section 806 of SOX by discharging the CFO in retaliation for his warning the board of directors about financial concerns raised by a proposed merger. OSHA ordered the company to: pay the complainant more than $486,000 in lost wages, bonuses, stock options and severance pay; pay over $1.4 million in compensatory damages for pain and suffering, damage to career and professional reputation, and lost 401(k) employer matches and expenses; post OSHA’s findings in a Form 8-K submission to the SEC; and pay reasonable attorney’s fees. Consider how OSHA’s compensatory damage award nearly dwarfs the lost wages and query whether OSHA is authorized to require a company to include particular items in its SEC filings. Then, on November 13, 2013, in a matter arising under the whistleblower protection provision in a similar whistleblower law, the Surface Transportation Assistance Act, OSHA ordered a company to pay a total of $1,070,123 to four whistleblowers, and to reinstate the whistleblowers. OSHA’s orders are issued before an employer has an opportunity to participate in a full evidentiary hearing and confront its accuser in a meaningful way. Though OSHA determinations technically qualify as “preliminary orders,” their import cannot be discounted, as the DOL regularly makes substantial efforts to enforce them, and they embolden whistleblowers to pursue their claims. In short, it is imperative that employers approach claims before OSHA with a high degree of diligence and caution. B. A Circuit Split Deepened Over The Scope Of Protected Activity The ARB issued a decision back on May 25, 2011, in Sylvester v. Parexel International LLC, expansively interpreting the scope of protected activity under SOX. That decision is at odds with decisions issued by a number of federal circuit courts of appeal. A circuit split has widened in the wake of that decision. Indeed, on March 19, 2013, in Wiest v. Lynch, the Third Circuit Court of Appeals gave Chevron deference to the ARB’s interpretation of “protected activity” under SOX, concluding that a whistleblow-

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er’s complaint need not “definitively and specifically” relate to one of the categories of misconduct set forth in Section 806. That decision is at odds with decisions issued by the First, Fifth, Sixth and Ninth Circuits, and employers are concerned that it may open the floodgates to claims that bear a highly attenuated relationship to the categories of fraud listed in Section 806. Moreover, given this circuit split, it may be just a matter of time before the matter ascends to the Supreme Court. C. A SOX Whistleblower Case Finally Reaches The Supreme Court On November 12, 2013, the Supreme Court heard oral argument in the first whistleblower case to reach this tribunal, Lawson v. FMR LLC. The issue before the Court is whether the whistleblower protection in Section 806 extends to employees of a publicly traded company’s contractors. If the Court sides with the employees’ position, the employees of millions of private companies that are contractors to public companies may have new causes of action. This decision also raises the question of the extent to which the Supreme Court will give deference to the ARB, as it addresses a conflict between a decision from the First Circuit favoring the employer position and a decision from the ARB to the contrary. During oral argument before the Court, several of the Justices questioned the propriety of the application of the statute to small “mom-and-pop”-type private employers, perhaps suggesting the Court disagrees with the expansive approach advocated by the petitioners (employees) and the ARB. Notably, the government conceded during the oral argument that, at a minimum, only employees of contractors engaged in work connected with the public company could bring a claim under Section 806. The petitioners’ counsel, however, refused to agree to a limiting principle. When considering the Court’s approach to retaliation claims, it is worth noting that, on June 24, 2013, the Court issued a highly favorable ruling for employers in a case arising under Title VII of the Civil Rights Act of 1964. Specifically, the Court adopted a “but-for” causation standard for Title VII retaliation claims. The

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Court rejected, by a vote of 5 to 4, a decision of the Fifth Circuit applying a less burdensome standard, i.e., that a plaintiff only need show that retaliation was one “motivating factor,” among others, that resulted in the adverse action. In so ruling, the Court stressed that:

Claims of retaliation are being made with ever-increasing frequency. The number of these claims filed with the Equal Employment Opportunity Commission (EEOC) has nearly doubled in the past 15 years—from just over 16,000 in 1997 to over 31,000 in 2012. … Indeed, the number of retaliation claims filed with the EEOC has now outstripped those for every type of status-based discrimination except race. … In addition, lessening the causation standard could also contribute to the filing of frivolous claims, which would siphon resources from efforts by employer, administrative agencies, and courts to combat workplace harassment. This language reflects the Court’s recognition that retaliation claims are being filed (albeit outside of the whistleblower context) at an exceptional rate, and a strict causation standard serves the necessary purpose of weeding out questionable claims. Although SOX employs a “contributing factor” causation standard that is less demanding than the “but for” standard the Court adopted for the Title VII context, the issue of causation is not presently before the Court. Still, employers can take some degree of comfort in noting that the Court has recently expressed its awareness of the rather extreme use of the retaliation sword.

WHISTLEBLOWER LAWSUITS ARE PROLIFERATING AT AN ALARMING RATE IN COURTS.

Conclusion These events may be the tip of the iceberg, as whistleblower lawsuits are proliferating at an alarming rate in courts around the country and before the DOL. As the rate of whistleblower claims continues to grow, corporations can expect to see a corresponding increase in government and public scrutiny on their compliance functions, as well as their employment practices. This will be exacerbated by significant judgments, settlements and government actions and investigations. In addition, we can expect to see a spike in tips to the SEC over the next year, and a growth in law firms focused on pursuing whistleblower awards, given the recent $14,000,000 bounty. It’s also just a matter of time before we see employment retaliation litigation initiated by the SEC. Thus, it is imperative that companies modernize their compliance programs. “Blocking and tackling” includes such basics as: creating incentives for employees to report internally; implementing whistleblower specific training for employees; and promulgating robust whistleblower protection policies and protocols and develop whistleblower protocols. Employers also need to focus on the tone at the middle, as well as the tone at the top, in developing a culture of compliance. For these steps to be effective, employers should approach matters with the mindset that whistleblowers are potentially valuable assets who can provide unique insight into fraudulent schemes rather than opportunistic and/or disgruntled employees with an axe to grind. This perspective encourages positive treatment of whistleblowers, which minimizes the risk of retaliation claims while garnering information and data that enables companies to ferret out fraud. Employers who use it have seen that it also serves to smoke out frivolous claims.

FACTS & FIGURES The following is a list of the most common whistleblower complaint categories reported to the U.S. Securities and Exchange Commission in 2013 as compared to reports in 2012, according to the Securities and Exchange Commission’s 2013 Annual Report to Congress on the Dodd-Frank Whistleblower Program:

17.2

17.1

16.2

17.2% - Corporate Disclosures and Financials 17.1% - Offering Fraud 16.2% - Manipulation In 2012 the most common complaints were as followed:

18.2

15.5

15.2

EXPERT BIO Steven Pearlman is a partner in Proskauer’s Labor & Employment Law Department and co-head of the firm’s Whistleblowing & Retaliation Group.

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18.2% - Corporate Disclosures and Financials 15.5% - Offering Fraud 15.2% - Manipulation

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J O I N TO DAY C

The Business Ethics Leadership Alliance (â&#x20AC;&#x153;BELAâ&#x20AC;?) is a membership organization of leading companies created to foster the sharing of best practices in governance, risk

CMY

management, compliance and ethics allowing members to leverage the collective experience and expertise of their peers.

For more information visit: Ethisphere.com/BELA To join contact Brette Baecker at Brette.Baecker@Ethisphere.com or 480.397.2656.

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CURRENT MEMBERS ABB Asea Brown Boveri Ltd ACADEMI LLC Adobe Systems Incorporated AECOM Aflac Blue Shield of California BMC Software Brightstar Corp. CACI Chevron Phillips Chemical Company CMS Energy Corporation ConocoPhillips Company

Corporate Research and Investigations LLC Crawford & Company Dow Corning Dun & Bradstreet Eaton Corporation Ecolab, Inc. FleetCor Technologies Operating Company, LLC Forestar Group Inc. General Electric Graybar Holland America Line Inc.

Johnson Controls, Inc. Jones Lang LaSalle Knights of Columbus ManpowerGroup Marriott International Milliken & Company OfficeMax Incorporated Old National Bancorp Oncor Electric Delivery Company Parsons Corporation PepsiCo, Inc. Realogy Corporation

Royal Caribbean Cruises Ltd. Schnitzer Steel Industries, Inc. Starbucks Corporation Symantec Corporation TE Connectivity Teradata Tesoro Companies, Inc. Tote, Inc. WPX Energy, Inc. Arthur J Gallagher Baptist Health South UPS

BENEFITS INCLUDE: C

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• One Delegate Pass to All Ethisphere’s Ethics Summits Globally BELA members receive one complimentary delegate pass to all Ethics Summits (New York, Latin America, Europe and Asia) and receive discounted passes for additional registrants.

• Opportunity to Share Program Highlights in Ethisphere Media BELA members will be given the opportunity to promote their ethics and compliance programs through Ethisphere Magazine, Ethics Summits and other media hosted by Ethisphere.

• Access to Ethisphere’s CLE Webcasts BELA members will receive complimentary access to Ethisphere’s CLE-accredited webcasts approximately 6 per month.

• On-Demand Access to Ethisphere Content Members will also be able to access Ethisphere content on demand throughout the year.

• Attendance at Local BELA Member Roundtables BELA roundtables provide an opportunity for senior executives and legal and governance practitioners to discuss innovative ways to address emerging challenges and compliance and ethics officers to connect and share lessons and best practices in ethics and compliance program development.

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• Discounts to Attend Ethisphere Partner Events BELA members will receive discounts off registration to other GRC conferences and content, including Thomson Reuters GRC events around the U.S.

• Institutional Subscription to Ethisphere Magazine Ethisphere Magazine features insight from leading compliance/ethics officers, general counsel, CEOs and other senior executives from global corporations.

www.ethisphere.com

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WORLD’S MOST ETHICAL Achieving What’s Possible...56 // Starbucks ...59 // Closing the Skills Gap ...61

ACHIEVING WHAT’S HUMANLY POSSIBLE Recognizing 65 Years of Employee Engagement Written By Jeffrey Joerres

This article contains information regarding the following topics: STRATEGY + LEADERSHIP + RISK MANAGEMENT ManpowerGroup is celebrating a very special milestone this year — our 65th anniversary. Our company was founded with a clear mission: to power the world of work and help the communities in which we live. The world of work has changed dramatically since 1948, but throughout that time our commitment to building talent sustainability for the good of companies, communities, countries and individuals themselves has not wavered. For 65 years, ManpowerGroup has helped people from diverse backgrounds unleash their full potential through meaningful work and achieve what’s humanly possible. All over the world — and ManpowerGroup has approximately 30,000 employees in 80 countries and territories, the largest global 56 Q4 \ 2013 \\ ETHISPHERE

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footprint in our industry — our people have been celebrating our history of connecting millions of people to opportunities and purpose, helping hundreds of thousands of companies achieve their business objectives. Last month, we marked our 65th anniversary in style at our global headquarters in Milwaukee, Wisconsin — the city where the first Manpower office opened all those years ago. Our employees take tremendous pride in the fact that our business changes lives and provides people from all walks of life with sustainable livelihoods. So many, in fact, that we have collected examples of powerful stories from our colleagues, associates, clients and community partners to share how we help them achieve what’s humanly possible as part of our anniversary celebrations.

The ability to do good while we do well is why we have been named as one of the World’s Most Ethical Companies, for three consecutive years, by the Ethisphere Institute. Being the most trusted brand in our industry is not a designation that is easily earned, and it is a massive badge of pride for our employees. An ethical approach to business is not only important to our suppliers, clients and candidates, but also means we can attract and retain the best employees internally. As experts in the world of work, we know how critically important it is to be able to find and keep the best talent. Our annual Talent Shortage Survey finds that employers struggle to find people with the skills they need (35% of organizations globally in 2013), and that such shortages impact WWW.ETHISPHERE.COM

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WORLD’S MOST ETHICAL their ability to serve clients. Similarly, we know that our company contains highly talented people who could choose to work anywhere they want. But they choose to work for ManpowerGroup because they have an emotional connection to the work that we do in an ethical and sustainable way to help clients and individuals alike navigate this continuing global economic environment of certain uncertainty. As talent becomes an increasingly scarce and critical resource, no other company knows how to identify, cultivate and sustain human potential like ManpowerGroup. Without the talent and passion of our people, we know it would not be possible to be successful and to connect people to the honor and dignity of work. That is why we make sure we take time out to thank our colleagues for their hard work and contributions to make us the number one global provider of innovative workforce solutions. In addition to marking our company’s anniversary, we have held several other employee appreciation events that allow our people to mingle with their co-workers in an informal setting and re-energize. Attracting the best talent requires innovation and contemporary workplace strategies. What will help companies power through times of uncertainty will be their ability to be agile and to harness human potential. A company committed to helping job seekers find their ideal employment match, ManpowerGroup knows what makes a great place to work. Workplace flexibility, in combination with other aspects of an effective workplace — such as development opportunities, exposure and experience — can have a powerful impact on employee engagement. Successful workplace effectiveness is about building trusting colleague-to-leader relationships based on performance.

WITHOUT THE TALENT AND PASSION OF OUR PEOPLE, WE KNOW IT WOULD NOT BE POSSIBLE TO BE SUCCESSFUL AND TO CONNECT PEOPLE TO THE HONOR AND DIGNITY OF WORK. THAT IS WHY WE MAKE SURE WE TAKE TIME OUT TO THANK OUR COLLEAGUES FOR THEIR HARD WORK AND CONTRIBUTIONS.

I’m proud to lead an organization that connected 3.4 million people to opportunities last year alone. Our colleagues tell us our workplace is empowering because they find great meaning in the work they do every day, and their satisfaction is boosted through the flexibility, clarity and accountability deeply embedded into our culture.

Expert Biography Jeffrey A. Joerres is Chairman and Chief Executive Officer of ManpowerGroup. Having joined the organization in 1993, Joerres served as Vice President of Marketing and Senior Vice President of European Operations and Global Account Management. In 1999, he was named President and CEO, and in 2001 he was named Chairman of the Board.

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not engaged globally

engaged globally

actively disengaged globally

40 // 60 // 40 PERCENT: AON Hewitt’s 2013 Trends in Global Employee Engagement affirmed that worldwide, 40 percent of employees are still not engaged. While 60% of employees globally are considered engaged, 40% of employees are passive or actively disengaged.

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Control Risks is an independent, global risk consultancy specializing in helping organizations manage political, integrity and security risks in complex and hostile environments. We support clients by providing strategic consultancy, expert analysis and in-depth investigations,handling sensitive political issues and providing practical on-the-ground protection and support. Our unique combination of services, geographical reach and the trust our clients place in us ensure we can help them to effectively solve their problems and realize new opportunities across the world.

www.controlrisks.com

Managing Risk | Maximising Opportunity

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WORLD’S MOST ETHICAL Starbucks’ brand is consistently ranked as one of the most valuable in the world by third party organizations. The company’s iconic logo, based around the Starbucks siren, has gone through several variations prior to today’s version, which was launched in 2011, seen below. The earlier versions of the logo were launched by Starbucks in 2011, 1992, 1987 and 1971. The evolution was subtle, but has increasingly focused on the siren and not on letters (such as the Starbucks name). The current version of the logo was launched as part of the company’s 40th anniversary.

STRONG ETHICS, STRONG BRAND

An Interview with Matthew Swaya of Starbucks Interviewed By Ethisphere This article contains information regarding the following topics: LEADERSHIP Ethisphere sat down with Matthew Swaya to learn more about what the Starbucks brand means and how it maintains an ethical culture. What differentiates your company from the rest of the industry when it comes to ethics and compliance? We all excel in different areas. Throughout our history, Starbucks has embedded acting ethically as a cornerstone to our culture and to how we work every day. Our partners (employees) are passionate about doing business the right way and it shows through the way we treat each other, our customers, business partners and communities. What keeps you motivated? Our partners. They reside at the core of our company and our culture. Providing WWW.ETHISPHERE.COM

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a great work environment supports our partners in upholding the values essential to our company’s success. We also symbolize good in our communities—whether it is through providing a gathering place and refuge or through community service and ethics. How does ethical behavior — both from the company and individual employees — impact the Starbucks brand? Ethical behavior from both the company and our partners has a fundamental impact on our brand. Treating each other with respect and dignity is at the very core of our culture and our mission, shaping the way we are viewed as a brand. It informs how we behave as a company and gives us a sense of responsibility. It also is meaningful to our customers to support a company with such a strong sense of responsibility.

What about your brand do you think encourages people to choose Starbucks over competitors? We recognize that our customers are making a choice when they walk into one of our stores. They tend to be as passionate about our products and our brand as we are. We try to engage our customers and encourage them to share their ideas, giving them a role in shaping Starbucks’ future. Our partners are passionate about their work and they do their best to meet the needs of our customers and give them a sense of community and belonging. Can you ever meet “success” in establishing a brand, or is it an ongoing process? I think you can achieve success in establishing a brand, but continuing or building on that success is an ongoing process. A brand doesn’t live in a vacuum and must be nurtured to maintain any degree of success. We are always striving to be better and to stay relevant.

Expert Biography Matthew Swaya is Senior Vice President, Deputy General Counsel and Chief Ethics and Compliance Officer at Starbucks.

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WORLD’S MOST ETHICAL COMPANIES The demand for skilled technicians in manufacturing will increase, but many jobs could go unfilled because workers lack necessary skills for these positions. The first step in solving this conundrum is to change perceptions of manufacturing for the better. The persistent myth of manufacturing as laborious “dirty work” departs far from today’s reality. Modern production facilities rely on advanced, computer-driven machinery operated by highly skilled technicians. More people —especially high school students, their parents and guidance counselors— need to see the new image of manufacturing to appreciate it as a viable, rewarding path to education and career success. Who better to advocate for and educate on behalf of the manufacturing industry than the very employees engaged in successfully elevating it as a leader of the U.S. economy? Kennametal’s nearly 14,000 employees in 60 countries around the globe have helped us become a worldwide manufacturing leader in tooling solutions, engineered components and advanced materials. We work hard to attract, engage, develop, and retain the best people and provide a great place to work that is inclusive and provides opportunities for continuous learning. That is a primary reason why the Ethisphere Institute has named Kennametal as one of the World’s Most Ethical Companies two years in a row, a recognition in which Kennametal takes great pride.

CLOSING THE SKILLS GAP

Engaged Employees Can Tell Success Stories Written By Paul J. Ward This article contains information regarding the following topics: LEADERSHIP

Since January 2010, the manufacturing industry has added almost 600,000 well-paying, highly skilled manufacturing jobs to the economy. In fact, if the U.S. manufacturing sector were its own country, it would rank as the 10th-largest world economy, according to the Manufacturing Institute, an industry organization dedicated to improving and expanding manufacturing in the United States. But despite this growth and prosperity, a national poll commissioned by Kennametal in 2011 revealed that just 9 percent of WWW.ETHISPHERE.COM

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Although we don’t manufacture end consumer products, we do make products and provide services that enable the production of virtually all types of goods. Our products and innovative custom and standard wearresistant solutions help increase our customers’ productivity across a wide range of market segments. Our ability to manufacture such sophisticated products on a global scale is largely attributable to our culture of engaged employees. Building on our company’s culture of engagement, we value every employee and the perspectives each brings. The more diverse we are in our thinking, the more capable and creative we are to think differently about our customers’ needs, to innovate and advance our industry.

Americans see manufacturing as a bright spot in the economy. In addition, only 11 percent believe manufacturing is growing; just 17 percent think manufacturing has a positive outlook in the future; and 68 percent feel the perceived lack of manufacturing jobs is more significant than the lack of training required to fill those jobs.

Kennametal employees not only care about our customers, but they also care about our company’s and the industry’s future. Nothing better illustrates that point than the astonishing 91 percent participation rate we achieved in this year’s Voice of the Employee survey, our annual employee engagement survey.

Two-thirds of manufacturers report a shortage of available, qualified workers. Even more concerning is the fact that 2.7 million manufacturing workers will be retiring in the next 10 years.

Our consistent record participation by Kennametal employees ranks us among the best of all companies that measure engagement. We conduct these surveys because employees comprise Kennametal’s ETHISPHERE \\ 2013 \ Q4 61

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WORLD’S MOST ETHICAL COMPANIES

THROUGH PARTNERSHIPS WITH COMMUNITY COLLEGES AND TECHNICAL SCHOOLS, SCHOLARSHIP AND TUITION ASSISTANCE PROGRAMS, A VETERANS HIRING INITIATIVE AND THE KENNAMETAL KNOWLEDGE CENTER, WE ARE WORKING HARD TO CLOSE THE MANUFACTURING SKILLS GAP AND KEEP OUR CURRENT EMPLOYEES HIGHLY ENGAGED.

In 2011, Kennametal commissioned a poll on consumer perceptions of the manufacturing industry. The following are some of the poll’s findings:

9 percent of Americans see manufacturing as a bright spot in the economy.

11 percent of respondents believe manufacturing is growing.

greatest competitive advantage. Their insights drive our ability to attract, develop, recognize and retain the best people, so we can grow stronger. At Kennametal, our employees are helping us do several things to address the skills gap in manufacturing, thereby strengthening the industry. In 2011, the Kennametal Foundation, which provides grants for educational opportunities, volunteerism and community related issues to qualified organizations around the world in or near communities in which Kennametal facilities are located, established The Young Engineers Program to help attract high school students to engineering and manufacturing careers. Selected students participate in a 15week curriculum that includes a combination of classroom discussions, hands-on projects and mentoring led by Kennametal’s world-class research, development and engineering team. Members of a select group of nearly 30 talented Kennametal employees, identified as Innovators, provide program input and teach classes in their areas of expertise.

17 percent of respondents believe that manufacturing has a positive outlook in the future.

65 percent believe manufacturing jobs are desirable.

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Kennametal’s internship, co-operative and apprenticeship programs serve as year-round recruiting tools to identify and develop potential talent. Kennametal strives to enhance relationships with target university partners to identify the most sought-after student talent. These pipeline programs are not only a great way to accurately assess candidates for potential positions, but also provide students valuable workplace experience and a chance to develop their abilities.

In 2012, 87 students participated in the internship program, 17 of which we hired fulltime, meaning 20 percent of interns were offered and accepted fulltime positions. We also recruited 127 apprentices globally, 90 of which we hired fulltime. Additionally, through partnerships with community colleges and technical schools, scholarship and tuition assistance programs, a veterans hiring initiative and the Kennametal Knowledge Center, which provides expert instruction to professionals in metalcutting operations, we are working hard to close the manufacturing skills gap and keep our current employees highly engaged. In 2012, Kennametal took a first, big step in a focused, long-term effort to “deliver the promise of manufacturing” by increasing awareness of the possibilities and opportunities in the industry. But we cannot tell this story by ourselves. Our fellow manufacturers must join us in delivering the promise of manufacturing by sharing their success stories and innovative solutions for building the manufacturing workforce of tomorrow. Together, we have the power to drive solutions, dispel misperceptions about manufacturing and rebuild confidence in the industry.

Expert Biography Paul J. Ward is Director, Global Ethics and Compliance, for Kennametal Inc.

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BRIBERY & ANTI-CORRUPTION The Tools of the Trade...64 // Risk Containment ...69

THE NEW TOOLS OF THE TRADE

Leveraging The Audit Tool In Your Anti-Corruption Compliance Toolkit Written By Erin R. Schrantz, Partner, Jenner & Block LLP This article contains information regarding the following topics: STRATEGY + LEADERSHIP + RISK MANAGEMENT At ethics and compliance conferences, compliance professionals often debate techniques to answer one fundamental and persistent compliance question: How do I know my compliance program is doing what it’s supposed to do? The discussion often circles around triedand-tested strategies that compliance professionals have employed over the years with varying degrees of success: • Peer review: Have a compliance professional in your industry review your company’s compliance program to identify areas of improvement. • Benchmarking: Review what your competitors are doing with their compliance programs and assess how 64 Q4 \ 2013 \\ ETHISPHERE

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your program measures up. • Employee feedback: Whether accomplished through surveys or focus groups, solicit feedback from employees on their views of the efficacy of the company’s compliance program. Each of those tools play an important part in measuring, testing and improving an organization’s compliance program. Yet, in the anti-corruption arena, these tools may not go far enough to detect high-risk conduct before it balloons into criminal exposure under the Foreign Corrupt Practices Act, the UK Bribery Act, and the myriad of local anti-corruption laws that multinational corporations must contend

with every day. They may also fall short in testing whether the company has bred and nurtured a culture of compliance. Peer reviews and benchmarking focus on the compliance infrastructure. They look at whether an organization has the requisite components of an effective compliance framework, such as appropriate policies and procedures, a robust training program and a mechanism to monitor compliance. Yet, neither peer review nor benchmarking is very effective at detecting whether specific conduct is afoot that may put a company at risk of violating anti-corruption laws. Focus groups and employee surveys can be targeted to identify specific instances of non-compliance, but they suffer from WWW.ETHISPHERE.COM

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BRIBERY & ANTI-CORRUPTION a different weakness. By design, these tools elicit self-selected information – employees will only share with you what they choose to share with you. Not surprisingly, wrongdoers rarely confess their wrongdoing in a survey response. And employees who suspect others of wrongdoing often do not voice their concerns—or, they voice them too late. Perhaps the most effective tool to probe the efficacy of a company’s anti-corruption compliance measures is a risk-based audit. Think of a preemptive, small-scale review targeted to uncover high-risk behavior before an issue surfaces on the company’s hotline, or worse, becomes the subject of a whistleblower complaint. Many organizations use their internal audit function to monitor compliance with company policies and procedures, but internal audit teams are often trained to spot financial control weaknesses, not corruption risk. Or, the internal auditors simply lack the resources to attack the corruption risk areas in a systematic and regular fashion. A properly designed anti-corruption compliance audit can be a very effective tool to measure a company’s culture of compliance and help ferret out specific risky behavior before a company trips over anti-corruption laws. Carrying out periodic anti-corruption audits can be expensive. Yet, the benefits of a strong, well-tested compliance program make the investment worthwhile by minimizing the risk of costly fines, penalties and reputational damage. Periodic anti-corruption audits can also help companies make continuous improvements to their compliance programs – an important compliance “hallmark” that the Department of Justice and the Securities and Exchange Commission called out in their November 2012 FCPA Guidance. Designing The Anti-Corruption Compliance Audit Compliance professionals can follow some straightforward steps to carry out an effective anti-corruption audit. A careful risk assessment – described in Step One below – should inform the degree to which a company implements the subsequent audit steps. As your corruption risk level increases, the harder your audit should push on the potential soft spots. Step One: Identify corruption high-risk areas within the organization. Know which aspects of the company’s business pose the greatest corruption risk. Consider these questions: • Does the company have operations in countries with low corruption perception index scores from Transparency International? • What are the company’s touch points with government organizations in those WWW.ETHISPHERE.COM

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IN AN ERA OF INCREASING FCPA AND ANTI-CORRUPTION ENFORCEMENT ACTIVITY, EVERY COMPLIANCE EFFORT COUNTS. TONE AT THE TOP, STRONG POLICIES AND PROCEDURES, AND EXCELLENT TRAINING ARE THE BEDROCKS OF ANY EFFECTIVE COMPLIANCE PROGRAM.

countries? For example, government relations, customs and tax departments typically have routine interaction with government officials, or use brokers and consultants who interact with officials on the company’s behalf. Any company department that has regular business pending before government agencies, or interacts frequently with government officials, may pose an enhanced corruption risk. Based on the answers to these questions, develop a list of the company’s business units that pose the highest corruption risk. Perhaps start with the customs group in Brazil, the government relations office in Beijing or the logistics department in Uzbekistan. The particular business unit to be audited first is not critical. The point is that the audit team has developed a riskbased list of business units to test as part of a periodic, anti-corruption audit schedule. Step Two: Identify employees in high-risk areas who may be in harm’s way. Identify the specific employees in highrisk business units who have the most face time with government officials. To put it simply, they are the most likely in harm’s way when it comes to corruption

risk. The type of interaction may vary from business unit to business unit. In the government relations unit, for example, the most senior director may have the most direct interaction with officials. In the tax department, the lower-level tax employee who manages the tax consultant relationship may be most exposed to risk. Here are some steps to find the right people to include in the audit: • Review the org charts and job descriptions for employees in all business units. • Consult with local management and local legal and compliance leads as needed to help identify the right people. • Pick the top one or two employees from the high-risk business unit that have the most direct, substantial interaction with government officials, either directly or through their work with third parties. Step Three: Solicit documents and information from high-risk employees. Identifying the right kinds of documents and asking employees for them is a basic audit tool and can be used effectively ETHISPHERE \\ 2013 \ Q4 65

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BRIBERY & ANTI-CORRUPTION key data. Do not forget to include local variations on corruption terms in your searches.

THERE IS NO ONE-SIZEFITS-ALL ANSWER TO THE QUESTION OF WHO SHOULD WIELD THIS ANTI-CORRUPTION AUDIT TOOL.

• Work closely with the company’s in-house IT team or an outside IT consultant. Emails can be pulled discreetly if they are stored on a central server. • Do not forget local data privacy laws! In some jurisdictions, local laws restrict the ability to collect and review employee emails absent documented suspicion of wrongdoing. • Keep search syntax fluid. Revisit and revise search terms and date ranges as the audit team learns new information from the email review. Step Five: Identify and analyze relevant accounting data.

in a corruption audit. Here’s one way to approach it: • Pick discrete categories of documents that are most relevant to the audit. For example, if a high-risk business unit had a major transaction pending approval before the Ministry of Finance in 2012, consider requesting all communications with Ministry of Finance officials for that year.

• Consider setting up an electronic mailbox to which the high-risk employees can submit the requested documents and information. Step Four: Pull emails from the high-risk employees.

• Develop a short list of questions to elicit the names of third parties whom interface with government officials on behalf of the business unit. For example, ask for a list of all customs clearing agents the business unit has used for the past two years.

Emails are enormously useful in a corruption audit, both in showing that employees are adhering to the rules or, regrettably, that there is a need for improvement. The scope of email review when testing compliance systems can be far more targeted than when there is full-fledged litigation or an investigation, the contexts in which most litigators are familiar with document review. Consider these strategies to keep the email collection focused:

• Send an email to the high-risk employees: (i) letting them know the compliance department is conducting a routine audit; and (ii) asking them to provide the relevant information and documents by a specific date.

• Leverage the information learned from the documents and data collected in Step Three. Use that information to craft narrow search terms and date ranges around particular transactions, government officials’ names or other

Like a financial audit, accounting records may be critical to an anti-corruption audit. Bribes and improper payments can sit on a company’s books in the guise of “consulting fees,” “miscellaneous expenses” or other vaguely described and ill-supported expenses. Based on the information learned in Steps Three and Four, determine which accounting records will aid the audit process. For example, your audit team may want to peek at the following kinds of records: • Expense reports for high-risk employees who interface with government officials; • Invoices and contracts for third-party vendors who interact with officials on behalf of the audited business unit; • Accounts payable entries for identified high-risk vendors. Importantly, be careful not to “silo” the accounting review and email review. The output from the audit will only be as good as the information sharing that occurs during the audit. As the audit team learns information from the emails – such as the name of a suspicious vendor – the information must migrate to the individuals reviewing the accounting records. This two-way street of information ensures the whole audit team has the benefit of each team member’s knowledge in real time. Step Six: Consider witness interviews.

68% of CIOs feel that their backup and recovery tools will become less effective as the amount of data and servers in their organization grows, according to the Virtualization Data Protection Report 2013.

If the audit surfaces concerning behavior that poses a risk of violating anti-corruption laws, consider interviewing the relevant employees and personnel. At this stage of the audit, you will want to assess whether such interviews should be handled by the audit team, compliance staff, in-house counsel or outside counsel. Step Seven: Analyze and document the audit findings.

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NEITHER PEER REVIEW NOR BENCHMARKING IS VERY EFFECTIVE AT DETECTING WHETHER SPECIFIC CONDUCT IS AFOOT THAT MAY PUT A COMPANY AT RISK OF VIOLATING ANTICORRUPTION LAWS.

Like a financial audit, document the findings of the anti-corruption audit, specify next steps and remedial measures and hold the business unit to them. The audit report may describe: • Instances of non-compliance with company policies or procedures; • The necessity for a full-blown internal investigation; • The necessity of improved training for particular employees or business units; • Recommended changes to company policies or procedures; • Recommended remedial measures with respect to particular employees or thirdparty vendors. Internal audit teams are well trained to make sure specific financial improvements and controls get implemented. Leverage that expertise to ensure that the specific anti-corruption remedial measures are implemented per the audit findings. Who Should Conduct the Audit? There is no one-size-fits-all answer to the question of who should wield this anticorruption audit tool. One option is to train a handful of internal auditors on corruption risk and leverage them as an internal resource. If the company lacks the internal resources for that approach, consider using outside counsel in tandem with the company’s internal accounting staff. Outside counsel may be more expensive, but the cost of a preemptive anticorruption audit may save the company a much heftier price tag down the road. WWW.ETHISPHERE.COM

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Outside counsel may also bring the benefit of experience performing similar audits for other companies, and with that experience, an independent assessment of how the company’s compliance program compares to others. Another important consideration is the attorney-client privilege: Using outside counsel to perform the audit may bring with it the protections of the attorney-client privilege, depending on the jurisdiction. In an era of increasing FCPA and anticorruption enforcement activity, every compliance effort counts. Tone at the top, strong policies and procedures, and excellent training are the bedrocks of any effective compliance program. Yet, a focused and risk-based audit protocol emerges as a critical tool to test the waters, as it can assess whether your employees are following the rules or engaging in risky behavior that may subject the company to exposure down the road.

Expert Biography Ms. Schrantz is a member of the Jenner & Block’s Complex Commercial Litigation Practice and participates in the White Collar Defense and Investigations Practice. She has published and lectured on a variety of topics, including attorneyclient privilege issues, internal investigation strategies, compliance audit techniques, and the Illinois rules of evidence.

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Global Investigations Beyond the Database

Kreller Due Diligence

As global enforcements on corruption intensify, a company’s transparency in all business transactions is essential—now more than ever. Neglecting thorough due diligence is not an option when your company’s reputation and stock value is at stake. Aggravated by the global economic crisis, desperate people will cut ethics for an extra dollar, and if associated, your company’s future is at risk. So, dig deep. Do more than check. Investigate » info.kreller.com/due-diligence-report for a free sample report

www.kreller.com | 1.800.444.6361 SINCE 1988 ETHI_Q4_2012_G&B.indd 1

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BRIBERY & ANTI-CORRUPTION

THE NEED FOR RISK CONTAINMENT

Integrating Appropriate Anti-Corruption Provisions in Third-Party Contracts Written By John P. Cunningham This article contains information regarding the following topics: STRATEGY + LEADERSHIP + RISK MANAGEMENT

In response to the U.S. government’s heightened enforcement of the Foreign Corrupt Practices Act (“FCPA”) in recent years, companies are increasingly under pressure to manage the actions of their third-party business partners. Today’s robust enforcement climate requires corporations subject to FCPA jurisdiction to enhance efforts to ensure that these partners comply with applicable law and make ethical decisions during the course of a business engagement. These efforts should be informed primarily by guidance from the Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”), through which U.S. authorities articulate expectations around the thirdparty contracting process. 70 Q4 \ 2013 \\ ETHISPHERE

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Defining Third Parties According to a recent global fraud survey, approximately 90 percent of reported FCPA cases involve third parties acting for or on behalf of a company, including (typically) business development agents, consultants, distributors, advisors, sales affiliates, and other intermediaries. FCPA enforcement actions brought by DOJ and SEC demonstrate that third parties are frequently used to facilitate or conceal the payment of bribes to foreign government officials in all types of international business transactions. Understandably, however, companies may be confused when attempting to decipher

precisely what qualifies as a “third party” under the FCPA and similar anti-corruption laws – and, likewise, how to gauge the type of risk such business partners can create. When it comes to this threshold risk question, it can be particularly helpful to examine the relevant language of the statutory source. The FCPA, in its anti-bribery section, describes third-party intermediaries as individuals or entities “acting on behalf of” a company that is subject to FCPA jurisdiction. By comparison, and similarly, the U.K. Bribery Act explains third parties (or “associated persons”) as individuals or entities performing services “for or on behalf of” a company that falls within the ambit WWW.ETHISPHERE.COM

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THE U.S. GOVERNMENT CLEARLY EXPECTS COMPANIES TO PERFORM DUE DILIGENCE ON THIRD PARTIES ACTING ON THEIR BEHALF.

of the Act’s jurisdiction. Importantly, by incorporating the term “agent” in this context, these statutes make it abundantly clear that they are not referring solely to a company’s officers, directors, and employees in underscoring this type of liability. Both definitions include thirdparty intermediaries such as sales affiliates and distributors. Considering Government Expectations The U.S. government clearly expects companies to perform due diligence on third parties acting on their behalf, and then exercise reasonable oversight of these relationships. The DOJ and the SEC have stated this repeatedly in FCPA enforcement agreements and in the joint Resource Guide to the FCPA (“FCPA Resource Guide”). Inherent in this “oversight” component is the expectation that, in contracts with third parties, companies will include “compliance provisions” that are “reasonably calculated” to prevent violations of the FCPA. Accordingly, a key to effective management of third-party engagements is the integration of customized ethics and compliance clauses in written agreements. Meeting the expectations of U.S. enforcement agencies in this area, however, represents a significant challenge to companies with global operations, many of which rely heavily on third-party intermediaries to represent their interests before or with foreign (i.e., non-U.S.) government and stateWWW.ETHISPHERE.COM

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owned or -operated clients. These companies may have hundreds or thousands of third-party relationships around the world. Following the direction of DOJ and SEC, however, these companies are now compelled to expend considerable resources to integrate ethics and compliance provisions into contracts with third parties and allay the risk highlighted in FCPA actions involving liability created by intermediaries. Starting with Core Guidelines There is no uniform set of “best practice” anti-corruption compliance provisions for third-party engagements. The clauses should be risk-based and require third-party partners to make ethical business decisions and otherwise comply with relevant laws and regulations -- with a particular focus on the FCPA, the U.K. Bribery Act, and other global anti-corruption laws. In recent settlement papers, the DOJ has stated that the incorporation of anti-corruption provisions should generally include anti-corruption representations and warranties, audit rights, and contract termination language. DOJ has likewise indicated that, when such clauses are omitted or hastily drafted, a company exposes itself to third parties acting improperly, unethically, or illegally on behalf of the company in a manner that increases the company’s vulnerability to reputational damage, government investigations, and criminal charges. On the other hand, ethics and compliance provisions that are inconsistent with applicable laws and regulations – perhaps because they are overly broad or unnecessarily demanding -- can expose a third-party partner to onerous contract terms that may be too costly to comply with, or disproportionate to what is required by applicable law. This type of unrefined third-party anti-corruption contracting approach can be bad for business, generating tension in negotiations with key business partners and/or making it difficult to secure the third-party assistance necessary for the company to thrive in a global marketplace. Common to all companies with successful third-party compliance policies, therefore, is the informed crafting and negotiation of proportionate and enforceable anti-corruption clauses and covenants. Tailoring for Risk and Proportionality Thankfully, there is some flexibility inherent in the guidance from U.S. authorities with respect to the contracting process for third-party business partners. The DOJ and SEC have emphasized, for example, that anti-corruption provisions should be integrated into agreements “where appropriate” and that the provisions “may, depending upon the circumstances” include anti-corruption covenants, audit rights, and contract termination language. In practical terms, this means that companies should generally seek some protective language in third-party agreements, focusing on the inclusion, where “appropriate,” of

the “big three” standard provisions -- anticorruption covenants, audit rights, and termination rights. But companies should not adopt a “one size fits all” strategy. Considerable thought should be given to differentiating among third-party business partners based on risk, and then customizing contract provisions according to this risk. One method, effectively implemented by many companies, is to divide third parties into high, medium, and low risk categories and create template clauses for each risk category – and then begin the contract negotiation process with the appropriate template. Companies should also be prepared to concede that, with some third-party business partners, it may not be appropriate or feasible to insist on certain terms (such as audit rights). In some cases, companies may, for example, meet resistance from third parties that feel they are being bullied into providing information that they deem confidential. Indeed, in certain circumstances, the absence of audit rights in agreements with major multinational companies may not come as a surprise to U.S. authorities, which is why the government writes some flexibility into its guidance for covenants. Ultimately, the key is to leverage ethics and compliance clauses and certifications to mitigate liability risks. To this end, third-party agreement provisions can and should differ depending on the nature and location of the goods or services under contemplation. A contract to engage a multinational conglomerate with a known anti-corruption program and a designated compliance department (with a Chief Compliance Officer) for services to be provided in Canada can reasonably vary from a written agreement with an individual business development agent engaged in a country with a known reputation for corruption.

Expert Biography Mr. Cunningham concentrates his practice at Baker & McKenzie LLP on internal investigations, anti-corruption compliance, and white collar criminal defense. He has experience in a broad range of compliance and dispute resolution matters, including corporate and regulatory investigations, FCPA and global anti-corruption compliance, compliance program development, anti-corruption due diligence, money laundering, fraud, asset forfeiture, and related civil litigation.

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SPECIAL FEATURE

A RECURRING QUARTERLY SECTION FROM ETHISPHERE LL

A •C

RNEY • CA

OUR A TT LL Y O

• C A L L YO UR TO UR

AT T O R N

IT’S ALSO GREAT MATERIAL IF YOU WANT TO SOUND INTELLIGENT TO YOUR BOSS AT A COCKTAIL PARTY.

TO HELP YOU WADE THROUGH, WE’VE NARROWED IT DOWN TO THE MUST KNOWS FOR THE BUSY PERSON RESPONSIBLE FOR THE ETHICAL LEADERSHIP, COMPLIANCE AND CORPORATE SOCIAL RESPONSIBILITY.

THE FOLLOWING SUMMARIES OF VERY IMPORTANT CASES, REGULATIONS AND ENFORCEMENTS CAN BE EXTREMELY BORING.

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ANTITRUST & BUSINESS PRACTICES American and US Airways Announce Antitrust Settlement with DOJ American Airlines and US Airways announced that they have reached an antitrust settlement with the Department of Justice, and hope to complete their proposed merger this month. Pending the approval of a federal judge, the combined airlines will be the world’s largest carrier. According to NBC News, the government filed the antitrust suit in August on behalf of Arizona, Florida, Michigan, Tennessee, Texas, Pennsylvania, Virginia and Washington, D.C., due to concerns that the proposed merger would restrict competition and significantly inflate airline prices across the country. As part of the settlement, the airlines have agreed to give up a total of 104 landing and takeoff slots at Reagan National and 34 slots at LaGuardia, two of the country’s busiest airports. The airlines will also lose gates at those two locations, in addition to gates in Boston, Chicago, Dallas, Los Angeles and Miami.

CORPORATE CITIZENSHIP & ETHICS Coca-Cola Donates $2.5M in Typhoon Relief In the wake of Typhoon Haiyan, The Coca-Cola Company announced this quarter that it will donate more than $2.5 million to aid disaster relief and recovery support in the Philippines. Immediately following the storm, Coca-Cola Philippines and its bottling partner, Coca-Cola FEMSA Philippines, donated water for relief efforts and to recovery personnel, in addition to a $1 million donation to support community rehabilitation and to assist independent customers with reconstruction efforts. “We would like to express our deepest sympathies to those affected by this tragic disaster in the Philippines,” said Muhtar Kent, Chairman and CEO, The Coca-Cola Company, in a press release. “Our dedicated associates are on the ground offering assistance, and we are committed to helping the communities rebuild.”

INSIDER TRADING SAC Reaches $1.8B Insider Trading Settlement SAC Capital has agreed to a $1.8 billion settlement to resolve insider trading charges brought against the firm. The amount, announced early this quarter, is the largest fine settlement for insider trading in U.S. history. SAC Chairman and Chief Executive Officer, Steven Cohen, will be personally responsible for the $900 million forfeiture and the $900 million fine. According to Bloomberg Businessweek, the Securities and Exchange Commission seek to ban Cohen from the securities industry indefinitely. However, should the SEC successfully bar Cohen from the industry, it will not prevent him from trading with his own money.

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FINANCE & FRAUD Former NAPFA Board Chairman Convicted of $50M Fraud Mark F. Spangler, former Board of Directors Chairman of the National Association of Personal Financial Advisors, was convicted of defrauding clients of the firm out of nearly $50 million. Spangler was also convicted on counts of wire fraud, money laundering and investment advisor fraud, according to Financial Advisor magazine. Spangler secured client funds by promising to make conservative investments, but instead invested their money into two separate, high-risk start-up companies in which he had a personal financial stake. Spangler took these actions without advising or securing the consent of his clients. JPMorgan Reaches $13B DOJ Settlement In the largest settlement ever reached between a corporation and the federal government, JPMorgan Chase & Co has agreed to a $13 billion settlement in connection with the 2007 sale of mortgage-backed securities, which resulted in billions of dollars of losses. According to CBS News, JPMorgan will pay roughly $6 billion in compensation to investors, $4 billion to aid homeowners and an additional $6 billion in fines. CBS News also revealed that the company reported net 2012 income of $21.3 billion, making it among the most profitable domestic banks. Tiger Asia to Pay $5.8M over Insider Trading A recent court ruling ordered U.S.-based hedge fund Tiger Asia Management LLC and two of its senior employees to pay a total of $5.8 million to roughly 1,800 investors who were affected by their insider trading scheme. Tiger Asia founder Bill Hwang came forward admitting he had used insider trading information on several trades in December of 2008 and manipulating share prices in 2009. “Tiger Asia and Mr. Hwang are pleased that this matter is finally moving toward being concluded in Hong Kong,” Thomas Valen, Tiger Asia’s lawyer in the U.S. said in a statement. “We have been looking forward to putting this matter behind us everywhere,” Mr. Valen added. Clinic Owner Sentenced to 15 Years in Prison for Role in Medicare Fraud The owner of a Brooklyn-based medical clinic, Irina Shelikhova, was sentenced to 15 years in prison this quarter for her part in a $77 million Medicare fraud scheme. Shelikhova was also sentenced to three years supervised release, in addition to the forfeiture of more than $36 million and a restitution amount of more than $50 million. According to a DOJ statement, “Shelikhova used fake doctors and forged documents to defraud Medicare out of millions of dollars of very real money. As the owner and operator of three medical clinics, Shelikhova engaged in a brazen scheme of fraudulent billing and kickbacks,” including paying elderly patients in exchange for Medicare numbers and silence.” “She relied upon her web of payoffs, kickbacks and Russian propaganda to support her criminal scheme, but the truth caught up with her and justice has now been served,” Loretta Lynch, U.S. Attorney for the Eastern District, said.

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CALL YOUR ATTORNEY WHISTLEBLOWERS

INTERNATIONAL/FCPA

SEC Releases Annual Report of the Whistleblower Office

Weatherford to Pay $253M over FCPA Charges

This quarter, the Securities & Exchange Commission released its third Annual Report of the Whistleblower Office. The report revealed that of the $439 million in funding that is available for whistleblowers, more than $14 million was paid out as a result of whistleblower tips. Forbes reported that a total of 3,238 formal tips were received, the most common category being “Corporate Disclosures and Financials”.

After years of investigations, Weatherford International Ltd. will pay $253 million for foreign bribery and trade-sanction violations.

In an interview with Forbes, Jordan Thomas, Chair of the Whistleblower Representation Practice and a Labaton Sucharow partner, said, “These results tell me that after its third year that the whistleblower program is hitting its stride. There is more awareness of the program and we believe it is much more effective, which is consistent with what we found in our own survey. In summary, the report indicates that the whistleblower program is working well, word is getting out about it and more people are going to be speaking up.” Whistleblower Behind $320M Mortgage Fraud Settlement After seven years, Home America Mortgage and its parent company Taylor, Bean and Whitaker agreed to a $320 million settlement over alleged mortgage fraud accusations. According to a whistleblower and former employee, Comfort Friddle, Home America “knowingly engaged in a pattern of fraudulent activity and business practices, including falsifying and manufacturing loan documents, disregarding HUD regulations, and ignoring the absence of necessary documentation to obtain financing for FHA-insured loans.” Friddle also alleged that the company allowed for its own employees to create false documentation in order to obtain loans for personal use, including bank tellers. According to Friddle, bank employees could push any loan through, even if it required creating new documents or backdating current documents. Friddle called the culture of the company a “teenagery-kinda-party atmosphere,” according to a report on the suit by the Al Jazeera News Agency.

GOVERNANCE, BOARDS & CEOS Former CEO Sentenced to 8 Years in Prison over Corruption Charges Former D.A.S. Construction CEO Steven Pumper was sentenced this quarter to 8 years in federal prison, and ordered to pay $2 million in restitution, over a slew of corruption and bribery crimes related to the Cuyahoga County corruption case. Pumper paid more than $2 million in bribes to government officials, in addition to improper payments to executives at Philips Medical Systems (now Philips Health Care). Pumper also bribed school board officials and building inspectors. Pumper’s cooperation and assistance with the investigation has led to the conviction of more than 60 government officials, public employees and contractors.

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The Wall Street Journal reported that Weatherford and its subsidiaries authorized bribes and paid travel and entertainment expenses for foreign officials in countries including Angola, Algeria and the Congo, in order to maintain and promote its business. The settlement also covers alleged violations committed in Cuba, Iran, Syria and Sudan from 2002-2007, when it was illegal for U.S. companies to do business in those nations. According to the Wall Street Journal, Weatherford Chief Executive Bernard Duroc-Danner said that the violations are a direct result of the company’s accelerated growth. “This matter is now behind us,” Mr. Duroc-Danner said in a statement. “We move forward fully committed to a sustainable culture of compliance.” Yara Fined $48M over Bribery Scheme Yara International, a Norwegian fertilizer firm, has been fined $48.5 million after a cross-border bribery investigation revealed Yara agreed to $12 million in bribes between 2004 and 2009. According to the country’s economic crime unit, bribes were paid to senior government officials in India, Libya and Russia, including a former Libyan oil minister. The company has admitted guilt and even initiated the investigation back in 2011 after suspicious payments had been made in Libya and India by a subsidiary. “There is no doubt that we have zero tolerance for corruption, that is why we alerted police,” said Yara chief executive Joergen Ole Haslestad. Alcoa Agrees to $384 Million Settlement for Bribing Foreign Officials This quarter, Alcoa agreed to pay $384 million to settle federal charges that the company used a third party to bribe a member of Bahrain’s royal family and other Bahraini officials, in addition to the nation’s government-run aluminum plant. The Securities and Exchange Commission said that it discovered the payments and alleged the company was attempting to secure contract negotiations with the aluminum plant, according to an article on the settlement by CNN. The bribes were allegedly paid through a London-based consultant, according to CNN, who had a connection to the Bahrain royal family. The agreement is the fourth-largest foreign bribery settlement announced by the Justice Department and SEC. According to the Washington Post, U.S. government authorities have negotiated record-high deals to settle foreign bribery cases. French oil company Total agreed to a $398 million settlement and the Swiss-based Weatherford agreed to $253 million.

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CALL YOUR ATTORNEY EMPLOYMENT LAW & DISCRIMINATION

ENVIRONMENTAL

Mountaire Farms Settles $48K Retaliation Lawsuit

Coca-Cola to Prevent 5.25M Metric Tons of C02

Mountaire Farms, a Delaware-based poultry processing company, has agreed to settle a retaliation lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC), for the sum of $48,000. According to National Law Review, the suit alleges that Mountaire employee Frantz Morette was fired after repeatedly voicing his concerns regarding poor working conditions for a group of Haitian employees. Morette alleged that Haitian workers were not allowed to take bathroom breaks and were not provided the training necessary for a promotion.

The Coca-Cola Company recently announced that it has installed a total of 1 million hydrofluorocarbon (HFC)-free coolers, which will use natural refrigerant and reduce emissions by 5.25 million metric tons of C02 over 10 years.

“It is of great concern to the EEOC when an employer fires an employee simply because he complained about unlawful conduct,” said Lynette A. Barnes, regional attorney for the EEOC’s Charlotte District Office. “The anti-retaliation provisions of Title VII are essential to the attainment of a workplace free of discrimination.” As required by the settlement agreement, Mountaire Farms will revise its current anti-discrimination policy to include proper procedures for reporting discrimination, provide confidentiality assurances, prohibit anti-retaliation and will implement formal procedures for investigating internal complaints.

The installation of the new refrigerant system marks a huge milestone for the company’s efforts to entirely phase out the old type of machines, which has become well associated with climate change and pollution. According to a statement, the company says that by 2015 all of its equipment will be HFC-free. “Over the past decade we have invested more than $100 million to make our coolers better for the environment,” said Jeff Seabright, Vice President, Environment & Water, The Coca-Cola Company, in a statement. “We have significantly reduced our overall carbon footprint. Through investment in research, development and commercialization efforts we’ve advanced the use of more energy-efficient, HFC-free cooling technologies and energy management systems. We’ve made sustainable refrigeration the cornerstone of our climate protection and energy management efforts.”

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SOMEWHERE ELSE YOU HAVE TO BE? Ethisphere Event

JANUARY 2014 JANUARY 7TH

Ethisphere and Baker & McKenzie Risk Containment: Tailoring Contract Provisions with Third Party Contractors Online

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OCTOBER 15TH – 16TH Ethisphere and Practical Law 2014 European Ethics Summit Brussels, Belgium

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Ethisphere, Guard Life Insurance Company and Nelson Mullins Riley & Scarborough LLP Information Lifecycle Governance – Minimize Risks & Improvement Online

MARCH 20TH – 21ST

Ethisphere Lessons from World’s Most Ethical Companies Live Webcast

MAY 2014 MAY 5TH

Ethisphere and Convercent San Francisco Compliance Roundtable San Francisco, CA

2014 Global Ethics Summit On March 20-21, 2014, The Ethisphere Institute and Thomson Reuters will team up to host the 6th annual Global Ethics Summit. Attended by CEOs, Board Chairs, GRC leaders, and government and regulatory officials, the event offers critical and timely insight into the challenges compliance and ethics professionals face while navigating an increasingly complex and daunting global legal landscape.

The agenda for the 2014 event, along with information on speakers and sponsorship information can be found by going to the event’s website at: www.globalethicssummit2014.com

A dramatist is one who believes that the pure event, an action involving human beings, is more arresting than any comment that can be made upon it.

JULY 2014 JULY 15TH - 18TH

Event Partner

OCTOBER 2014

JANUARY 17TH

MARCH 2014

Keystone Partner

- Thornton Wilder

Ethisphere 2014 Latin America Ethics Summit Sao Paulo, Brazil

Latin America, Europe and Asia Ethics Summits In 2014, Ethisphere will once again host Ethics Summits in Latin America and Asia, and will be hosting the first annual Europe Ethics Summit. The Latin American Event will take place in Sao Paulo, Brazil (July), the Asian event will take place in Singapore (December), and the European event will take place in Brussels, Belgium (October). Stay tuned at Ethisphere.com for more information and updates on these and other global events.

All Ethisphere events are free to Ethisphere Council members. Non-members may register for a Symposium, Conference or eRoundtable at www.ethisphere.com/events or by email aubrie.artiano@ethisphere.com or call 480-397-2655.

Unless otherwise noted, roundtables and online symposiums are archived for review by council members. However, certain eRoundtables are closed to the media and not recorded due to sensitive disclosures. 78 Q4 \ 2013 \\ ETHISPHERE

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UPCOMING: THE WORLD’S MOST ETHICAL COMPANIES Compliance has become an increasingly complex challenge, as the sheer volume of laws, rules and regulations proliferate across governing agencies and jurisdictions. Establishing an ethical culture that facilitates compliance, from effective inter-company communication to employees embracing personal responsibility, is a highly challenging and often elusive objective. It is for this reason the Ethisphere Institute and Thomson Reuters are proud to host the 6th Annual Global Ethics Summit at the Crown Plaza Times Square in New York City, March 20-21, 2014. The theme of this year’s summit is “Leadership Strategies: Driving Governance and Performance.” This premiere ethics and compliance Summit brings together the industry’s thought leaders and most experienced practitioners to define and share best practices, and provide critical insight into the foremost compliance risks and challenges. Speakers will also address global compliance and ethics trends and expectations, current anti-corruption efforts, pertinent technology and data, and the broader issues of ethics, reputation and brand. The event will offer exceptional networking opportunities and will foster the valuable exchange of relevant experience and information among all attendees.

Speakers at the 2014 Global Ethics Summit include: • Larry D. Thompson, Executive Vice President, Government Affairs, General Counsel and Corporate Secretary, PepsiCo • Hon. Jed S. Rakoff, United States District Judge, United States District Court, Southern District of New York • Dennis Muilenburg, Vice Chairman, Chief Operating Officer, The Boeing Company • Kenneth Resnick, Vice President and General Counsel, GE Oil & Gas • William H. Efron, Northeast Region Director, Federal Trade Commission On the first night of the conference, Ethisphere will recognize the 2014 World’s Most Ethical Companies. In its eighth year, the coveted World’s Most Ethical (WME) Company designation recognizes those organizations that have ostensibly gone well beyond professing ethical behavior by successfully employing effective, sustained ethical leadership and practices within their respective industries. The dinner will allow for exceptional networking opportunities, include a prominent keynote speaker and complimentary company photographs. The official World’s Most Ethical Companies announcement will be made the morning of March 21 at the Global Ethics Summit. To learn more about the Global Ethics Summit, including how to register, please visit www.globalethicssummit2014.com. To learn more about the World’s Most Ethical Company designation, please visit www.ethisphere.com/worlds-most-ethical.

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Companies in this issue are indexed to the first page of the article in which each is mentioned.

Abbott Laboraties // 14 Acumen // 30 Adam Kronk // 30 Adriana Machado // 30 Alain Dussault // 30 Alcoa // 74 AllenCo Energy // 74 American Airlines // 74 Anna Hazare // 30 Apple // 30 Autodesk // 30 Baker & McKenzie // 70 BCE/Bell Canada // 30 Ben Bernanke // 30 Benjamin M. Lawsky // 30 Benjamin Zachary Bronfman // 30 Bilfinger // 10 Brad Smith // 30 Buick // 10 Calvert Investments // 30 Campbell Soup Company // 30 Career Education Company // 14 Charles Elson // 30 Chelsea Clinton // 30 Chevenee Reavis // 30 Chicago Tribune // 30 Clayton Christensen // 30 Coca-Cola Foundation // 30 Compliance Week // 30 Conrad N. Hilton Foundation // 30 Cory Heyman // 30 CREATe.org // 30 Cure Violence // 30 D.A.S. Construction // 74 Dave Gilboa // 30 Dave Stangis // 30 David Meister // 30 Deloitte Center for Ethical Leadership // 30 Dinesh Thakur // 30 Donald Gale // 30 Dow Jones // 30 Dr. Hau L. Lee // 30 Dr. Sima Samar // 30 Drago Kos // 30 Edmund J. Cain // 30 Elon Musk // 30 Eric H. Holder, Jr. // 30 Eric Schmidt // 30 Facebook // 30 Faruque Ahmed // 30 Fethullah Gülen // 30 Ford Motor Company // 30 Francisco Cigarroa // 30 Gary Slutkin // 30 Gary White // 30 General Electric // 30 Georg Kell // 30 Glenn Greenwald // 30 Global Thermostat // 30 Good Business International // 30 Hannah Jones // 30 Harvard Business School // 30 Harvard’s Kennedy School of Government // 20 Home America Mortgage // 74 Huguette Labelle // 30 INSEAD // 30 Institute of Business Ethics // 30 International Council of Toy Industries // 20

JPMorgan Chase & Co. // 74 Jack Palmer // 30 Jackie Lynn Coleman // 30 Jamie Howland // 30 Joaquim Barbosa // 30 Joaquín Almunia // 30 Jochen Zeitz // 30 Joe Goodwill // 30 Joe Murphy // 30 John Mackey // 30 John O’Hara // 30 John Terzaken // 30 Johnson & Johnson // 09 Jones Lang LaSalle // 18 Karen Becker // 30 Ken Daly // 30 Kennametal // 61 Kenneth Macharia // 30 Kering // 30 Kruger Products // 30 LaSalle Investment Management // 18 Laysha Ward // 30 Lee Augsburger // 30 Lemminkainen // 09 Lisa M. Borders // 30 Liz Maw // 30 Lynelle Cameron // 30 Manpower // 56 Marcela Lopez-Macedonio // 30 Marjorie Doyle // 30 Marc DeCourcey // 30 Mark Pieth // 30 Mark Steward // 30 Mark Z. Jacobson // 30 Marty Mulloy // 30 Mary Jo White // 30 Matt Kelly // 30 Matthew W. Patsky // 30 MGM Resorts // 10 Michael DiBella // 30 Michael Hawthorne // 30 Michael Stevens // 30 Michael Woodford // 30 Microsoft // 30 Monika Mitchell // 30 Monique Villa // 30 Morgan Stanley // 09 Mountaire Farms // 74 National Association of Personal Financial Advisors // 74 Neil Blumenthal // 30 Net Impact // 30 Novartis // 10 Noynoy Aquino // 30 OECD Anti-Bribery Working Group // 30 Olympus // 30 Omnicare Pharmacy // 30 Pamela Passman // 30 Parexel International // 48 Patricia Callahan // 30 Patrick Li // 30 Paul Farmer // 30 Paul Volcker // 30 Philippe Le Houérou // 30 Philippa Foster Back // 30 Pope Francis // 30 Procter & Gamble // 14 R. Edward Freeman // 30

Raj Sisodia // 30 Ram Roe // 30 Ranbaxy // 30 Renee Mauborgne // 30 Richard Branson // 30 Richard Kyle // 30 Ronald Berenbeim // 30 Room to Read // 30 Ross McLean // 30 Roy Snell // 30 Royal Bank of Scotland // 09 SAC Capital // 09, 74 Scott Davis // 30 Scott W. Friestad // 30 Sean McKessy // 30 SEC Office of the Whistleblower // 48 Securities and Exchange Commission // 30 Sheryl Sandberg // 30 Society of Corporate Compliance & Ethics // 30 Stanford // 30 Stanley Electric // 10 Starbucks // 59 Steve Holmes // 30 Swiss Weatherford // 74 Target // 30 Taylor, Bean and Whitaker // 74 Tesla Motors // 30 The Coca-Cola Company // 74 The Conference Board // 30 The Guardian // 30 The Nature Conservancy // 30 The Resource Foundation // 30 The Sherwin-Williams Company // 14 The University of Texas System // 30 Thomson Reuters // 30 Tiger Asia Management LLC // 74 Tim Cook // 30 Timothy Smith // 30 Total // 74 Toyo Tire & Rubber // 09 Transparency International // 30 Travis Tygart // 30 Trillium Asset Management // 30 U.S. Anti-Doping Agency // 30 United Nations Global Compact // 30 United States Federal Reserve // 30 University of Delware // 30 UPS // 30 UPS Foundation // 10 US Airways // 74 Vinicius Marques de Carvalho // 30 Virgin America // 30 W. Chan Kim // 30 Warby Parker // 30 Water for People // 30 Water.org // 30 Weatherford International // 74 Whole Foods // 30 William Crane // 30 World Bank Group // 30 Wrigley Jr. Company // 14 Wyndham Worldwide // 30 Yara International // 74

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