Corporate Culture Index Market Overview 2.0
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Transcript of Corporate Culture Index Market Overview 2.0
July 23, 2010
Corporate Culture Index™ Overview
DISCLOSURE: Michael Brozzetti is CEO & President of Boundless LLC, an internal audit and risk advisory firm and is Chairman of the
Business Integrity Alliance™ which is a joint venture between zEthics, Inc. and Boundless LLC. Michael Brozzetti is a Certified Internal
Auditor® in good standing with the Institute of Internal Auditors and certifies his accountability to the principles within the Institute of
Internal Auditor „s Code of Ethics. Michael is a CIA Learning System training partner with the Institute of Internal Auditors, Villanova
University, and the Holmes Corporation. Michael Brozzetti is currently under consideration for the zEthics, Inc. Board of Directors.
Information DemandMarket Stakeholder Groups
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“True” state of the
Company
Company & Internal Audit
Research & Academics
External Audit &
Regulators
Investors & Advisors
Workers & Labor
Consumers & General
Public
Common Stakeholder Challenges
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Level of transparency into Board and Company culture
No practical way to measure the “Soft controls” that shape
cultural norms and risk appetites.
Limited foresight into the cultural risks
that manifest misconduct and fraud.
Disclosure and flow of risk information
Often filtered and/or distorted.
Accountability and culpability
Case law suggests that not
knowing and ignorance is a
defensible claim.
Ethics
Governance
Risk Management
Compliance
Internal Control
Communication & Trust
Corporate Culture Index™
When the “top” and “bottom” are not in sync are the
middle activities and related disclosures really effective?
Technology
Process
People
Corporate Culture Index™ (CCI)Introduction
zEthics.com is a secured 3rd party information service that brings dynamic risk
information into the hands of Companies and market place stakeholders - empowering
them to identify and thoughtfully respond to the people risk and safety on the horizon.
People
Ethics
& Values
Internal & External
Adjudication
Process
Governance, Risk, and
Compliance
Enterprise Risk
Management
Technology
Quality of risk and control information
Enabler of “real-time” communication of risk and control information
Business Integrity Hierarchy ™
The CCI™ brings market level transparency to the layer of business integrity that matters
most – the People.
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Data Structure & Reporting
The Corporate Culture Index™ is yielded from the zEthics.com information service that administers and manages employee surveys and data submission for subscriber reporting.
There are eight (8) key reporting categories rated on a 10-point scale, which cover the following cultural dimensions: Ethics & Governance
Risk Management
Strategic Planning
Management
Communication
Organization
Empowerment
Compliance (Audit & Quality)
1 2 3 4 5 6 7 8 9 10
Poor Excellent
Corporate Culture Index ™ 10-point scale
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Data Structure & Reporting..cont’d
#1 – Questionnaires & Surveys Mirrors the organizational hierarchy at the Company level, Business Unit level, and
Management level within four (4) personnel responsibility levels:
Board Fiduciaries
Officer Fiduciaries
Non-Officer Fiduciaries
Key Functional Management (non-fiduciaries)
#2 - Ethics Action Reporting (“EARs”) Interactive communication for supporting;
Complaint validation and documentation
Case management
Whistleblower protection
#3 - Suggestion Reporting Identify and initiate improvement ideas that drive business returns
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Example CCI™ DashboardBusiness Unit & Executive Survey
BU #3 Executive Survey CEO CFO COO VP HR CIO
Ethics & Governance 8.6 8.2 2.1 1.6 5.8
Risk Management 8.0 7.2 3.1 3.0 5.8Strategic Planning 7.4 7.6 3.6 3.4 5.2Management 7.6 7.8 1.4 1.8 5.4Communication 5.4 6.0 1.1 1.0 4.8Organization 6.2 7.8 1.8 2.0 5.8Empowerment 7.2 7.6 2.5 2.0 5.4Compliance (Audit & Quality) 8.0 4.8 2.3 2.0 6.6
CCI™ Composite Rating 7.3 7.1 2.3 2.1 5.6
Business Unit Survey Business Unit 1 Business Unit 2 Business Unit 3 Business Unit 4 Business Unit 5
Ethics & Governance 4.6 4.7 2.4 5.3 4.3
Risk Management 4.3 4.9 1.0 5.3 3.9
Strategic Planning 3.7 4.0 2.8 5.0 3.9
Management 3.6 4.1 1.3 4.9 3.5
Communication 5.0 5.6 4.3 5.9 5.2
Organization 4.0 4.8 2.5 5.1 4.1
Empowerment 4.5 4.9 2.8 5.6 4.5
Compliance (Audit & Quality) 5.2 5.4 3.8 5.6 5.0
CCI™ Composite Rating 4.4 4.8 2.6 5.3 4.3
This is fictitious data for illustrative purposes only
Drill down and gain dynamic views into the organizational
corporate culture for internal benchmarking
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Example CCI™ DashboardCultural Trend Analysis
Note: Chart is for illustrative purposes only. PY = Prior Year and CY = Current Year trending.
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Example CCI™ DashboardIndustry Analysis
Note: Chart is for illustrative purposes only. Y = Year.
Disclosure PolicyInformation Access by Subscription Type
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Company and
Internal Audit
External Audit
and Regulators
Investors and
Advisors
Workers and
Labor
General
Public
Company
QuestionnaireX X X X X
Company
Survey 8 Dimensions
XCompany voluntary /
subpoenaX X Company voluntary
Executive
Survey 8 Dimensions
XCompany voluntary /
subpoenaX 1 X Company voluntary
Ethics Action
Reports (EAR)X
Company voluntary / subpoena
Company voluntary / subpoena
X Company voluntary
Suggestion
ReportingX Company voluntary Company voluntary X Company voluntary
1 Executive name fields are restricted to the company and internal audit, reporting for this subscriber identifies the
executive in a standard responsibility level; Board Fiduciary, Officer Fiduciary, Non-Officer Fiduciary, or Key Manager.
X = Information Access
Generalized
Information
Specific
Information
Information flow that supports market stakeholder groups
Company Benefits
Quickly identify high risk areas of the business, including non-compliance,
weaknesses, mismanagement, fraud, and corruption
Quantify how company goals, strategies, and objectives affect management
philosophy and operating style
Plan for and manage the risks associated with organizational change events
Support strategic decisions that affect organizational changes and
restructuring of authority and responsibility
Transparency, accountability, and integrity that support the risk oversight duties of care, loyalty, and prudence
Demonstrate risk oversight and responsible corporate citizenship by disclosing risk information and cultural trends in the proxy.
Ensure that D&O liability coverage exclusions are not invoked (i.e. for fraud, negligence, non-compliance, etc.)
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Internal Audit Benefits
Empower Internal Audit with a source of risk intelligence that;
Support dynamic audit planning
Utilize resources more effectively
Reduce audit cycle times; and
Improves governance, internal control, and risk management
Test, measure, and monitor the effectiveness of the Tone at the Top
and the corporate culture on a relative scale
Become a catalyst for corporate culture excellence by fostering
honesty, loyalty, mutual trust and respect
Support Internal Audit opinions and compliance with Institute of
Internal Auditors (IIA) Standards
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External Auditors
& Regulator Benefits
Fast-track valid whistleblower complaints Timely access to original, independently derived information
Improve transparency into the corporation to aid in audit planning, investigations, etc. Support dynamic audit planning
Utilize resources more effectively
Reduce audit cycle times
Effectively audit governance, internal control, & risk management
Readily identify aggressive corporate cultures that discount risk
Readily determine where delusion ends and dishonesty begins
Early warning of fraud and misconduct at corporations
Check & balance against disclosures in public filings
Assist SEC with building the Investor Protection Fund
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Investor & Advisor Benefits
Proxy access – board evaluation, selection, nomination and risk disclosures
Say on pay – leverage to reign in excessive compensation
Address shortcoming in the marketplace for due diligence
Credit ratings are unreliable and impossible to measure
The external audit report identifies limitations in finding fraud
Stock analysts are not independent – often unreliable and biased
Access to timely, reliable and comprehensive information about fraud and
high risks
Early warning of potential problems
Check & balance against public disclosures
Collaborate with other investors to actively engage companies within
investment portfolios
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Worker & Labor Benefits
Gain confidence that the peoples voice “will be heard” by participating
in periodic company and executive surveys.
Gain confidence knowing a 3rd party reviews and validates complaints
while protecting workers anonymity.
Qualified “whistleblowers” share in rewards and bounty programs.
Gain confidence that competent Certified Internal Auditors® will help
you understand how to complete and validate complaints.
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General Public Benefit
Know the unbiased truth about corporations
Easy access to reliable information for due-diligence
Readily identify aggressive corporate cultures that discount risk
Safeguard investments and retirement savings
Make better buying and investing decisions
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Business Integrity Alliance Founders
Michael Brozzetti, CIA®, CISA®, and CGEIT®
President of Boundless LLC
Internal audit Quality, Training, Education and Support
Ethics, Governance, ERM speaker and workshop leader
Qualified IIA Instructor
Chairman of Business Integrity Alliance™
Chairman of the Chief Audit Executive Roundtable
Adjunct Instructor with Villanova University
Mark Rome
Founder of zEthics, Inc
Co-Founder of Business Integrity Alliance™
Member NACD, IIA and IMA
Media and Publications Rome, Mark (2010), How CFO's can evolve the Corporate Culture to drive Business Returns, CFO.com
Rome, Mark (2010), Using Analytics to Restore Public Trust, Taylor & Francis
Brozzetti, Michael (2009). A New Era for Internal Auditors. IIA Insight.
Brozzetti, Michael (2010). Internal Auditing and Fraud Interview (2010). Comcast MoneyMattersTV
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Strategic PartnershipsCase Study Highlights
Villanova University
Instrumental to the 2008 inception of the IIA/Villanova CIA Learning System university partnership program.
Supported marketing and growth of the program increasing registration by over 150% from its inception.
Over 85% of students rated instructor overall performance as exceptionally good during 2010 program.
Holmes Corporation
Successful collaboration and delivery of corporate on-site CIA training programs
Over 100 course seats served
IIA Philadelphia Chapter
Founder and Chairman of the 2010 CAE Roundtable that attracted over 50 participants in 2 sessions
100% of CAE participants rated Chairman performance as exceptionally good (35%) or above average (65%)
95% of CAE participants rated overall value of roundtable as exceptionally good (15%) or above average (80%)
Business Integrity Alliance™ Joint Venture Co-Founder and Chairman of the Business Integrity Alliance™ a joint venture with zEthics, Inc. committed to
advocating corporate governance excellence and supporting corporate governance market initiatives
Awarded as one of only 11 consulting firms to participate in the California Public Employee Retirement System (CalPERS) Corporate Governance Research Spring-Fed pool over the next 3-5 years to support market place.
Aline
Collaborative partnership to support the application of governance, risk, and performance methods to improve organizational accountability, transparency, and integrity.
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Contact Information
Contact Information
Michael Brozzetti
CEO, Boundless
3513 Bowman Street
Philadelphia, PA 19129
(215) 687-7376
Contact Information
Mark Rome
CEO, zEthics, Inc.
980 9th St., 16 Floor
Sacramento, CA 95814
(602) 358-9586
http://www.zethics.com
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