The truth about “Tone from the Top” презентация

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Are your executives telling the truth when they say “ethics matter”?

Слайд 1The truth about “Tone from the Top”


Слайд 2Are your executives telling the truth when they say “ethics matter”?


Слайд 3FIFA protects the integrity of football and is fighting corruption in

football.
-FIFA Football Governance “The guardians of the game” 20 November 2014

Слайд 4We stand for respectable, honest actions in everyday business that are

in accordance with rules...
- The Volkswagen Group Code of Conduct
Source: http://www.volkswagenag.com/content/vwcorp/content/en/the_group/compliance.html

Слайд 5The “Tone from the Top” at FIFA and Volkswagen share a

common element
What is it?

Слайд 6They are lying.


Слайд 7They are not alone.


Слайд 8Management or the CEO is involved in 53% of bribery cases;

Senior executives know about 86% of corporate fraud cases

Слайд 9If you wanted to design an incubator for generating misconduct, it

would look a lot like the C-Suite

Слайд 10What makes the C-Suite so susceptible to corruption?


Слайд 11Management readily sees cause and effect between bribery and sales


Слайд 12Companies that bribe have greater sales growth compared to control firms

for 3 years before and 3 years after winning a major contract through bribery

Слайд 14But there are negative side effects of corruption


Слайд 15Companies that bribe have poorer net profit margin (net income divided

by sales revenue) for the same 6 year period

Слайд 16Companies that bribe have poorer cumulative abnormal returns (difference between the

sum of the monthly returns for bribing firms versus control firms) for the same 6 year period

Слайд 17Companies that bribe perform poorer on nearly every corporate metric used

to measure success

Слайд 18If you endorse corruption to achieve a goal, you endorse corruption

(full stop)

Слайд 19If you lie, your employees will lie


Слайд 20If you cheat, your employees will cheat


Слайд 21If you give bribes, your employees will take bribes


Слайд 22Tone from the top is not what you say, it’s what

you do

Слайд 2381% of all frauds are perpetrated by at least one insider


Слайд 245% of all revenues are lost due to occupational frauds


Слайд 25Companies are more often victims of corruption than beneficiaries


Слайд 26How can you change a culture of corruption?


Слайд 27Start changing traditional ethics training


Слайд 28When the big people get in trouble, the little people get

ethics training.

Слайд 29Target the “big people” about how corruption causes internal fraud


Слайд 30CEOs are prone to viewing the company’s success as indistinguishable from

their own.

Слайд 31When bribery hurts shareholder value it hurts the CEO


Слайд 32Use targeted motivators in your ethics training


Слайд 33Motivation: Shareholder Value & Exec. Mgmt; Career Opportunity & Middle Mgmt;

Job Security & General Employee Base



Слайд 34How do whistleblowers help?


Слайд 35Whistleblowers are effective at discovering external fraud, and even more effective

at discovering internal fraud

Слайд 36Discovering Internal Frauds


Слайд 37Median Losses After Discovery


Слайд 38Reduction in Median Losses with Effective Internal Controls


Слайд 39Whistleblowers are one of many internal controls that support an ethical

culture that reduces internal corruption

Слайд 40An ethical culture that reduces internal corruption sustains a profitable culture


Слайд 41Sustained profits make your CEO a superhero


Слайд 42So your executives can tell the truth when they say “ethics

matter”

Слайд 43Please like & share


Слайд 44About the Author

Background
Eric Pesik is currently the Associate General Counsel and

Compliance Officer for Seagate Singapore International Headquarters Pte Ltd.
He also serves as an Adjunct Assistant Professor with the University at Buffalo, State University of New York, in the School of Management.
He has been a lawyer since 1997 and is a member of the State Bar of California, USA. He is also admitted to the US Court of International Trade in New York and the US Supreme Court in Washington, DC.
Many of Mr. Pesik’s presentations are available on SlideShare at: http://www.slideshare.net/ericpesik

Disclaimer
This work represents the opinions of the author alone, and is not the opinion his employer.

Creative Commons Attribution License
You are free to share, copy, distribute, and transmit this work; to remix or adapt this work; and to make commercial use of this work, under the condition that you must attribute this work to Eric Pesik (but not in any way that suggests that I endorse you or your use of this work). Each slide contains source attributions and URL; before reusing, you must obtain the original images from the original sources, and you must comply with any applicable license restrictions imposed by the original source. http://creativecommons.org/licenses/by/3.0/

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