ECG Code of Conduct

Presented by: Karen Nelson, Efo Ntchou, Loren Schwappach, Hattie Simmons, and Jamie Ulrich (Project Lead)Colorado Technical University

INTD670-1103A-10

Leadership and Ethical Decision-Making

Group Project

For: Doctor Bryan Forsyth

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Presentation Overview

•Introduction

•General Business Conduct

•Sales and Marketing Practices

•Business Courtesies/Gifts

•Conflicts of Interest

•Relationships with Client, Suppliers, Influential Parties, and Coworkers

•Use of Company, Client, and Supplier Resources

•Insider Trading

•Other Areas of Compliance

•Reporting, Investigating Measures, and Punitive Actions

•Questions and Concluding Remarks

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A Code of Conduct is a set of principles and rules designed to define how employees are expected to behave. These guidelines were established to govern employees in such a way they embody the vision of ECG and represent the organization in such a manner that they exhibit trust, honesty, integrity, and good moral strength when dealing with clients. Although the Code of Conduct dictates the rules of ECG, as well as penalties for violations, it can only encourage ethical behavior not force it.

Employees much show exemplary professionalism in general business transactions. A large part of this professionalism means understanding the difference between right and wrong when dealing with clients. The sales and marketing teams need to be mindful they are disclosing accurate information regarding the products and services offered by ECG. The object of their job is to highlight the value of what ECG has to offer, but embellishing it too far can result in clients and potential clients not completely understanding what they are purchasing.

It can be common practice for gifts to be exchanged all throughout the work environment, which can be an excellent way of maintaining strong professional relationships. This will need to be supervised very carefully so as to be sure no ethical or legal violations occur. Gift giving or receiving along with the types of relationships that have developed should be monitored for potential conflicts of interest which could also have implications of further violations. Insider trading accusations are serious could be a reasonable result of gift giving/receiving, inappropriate relationships, and conflict of interest issues

It is vital to the success of ECG professionally and financially that all business conducted on behalf of the organization be done so in a highly ethical manner. Employees are the backbone of ECG and represent the organization when dealing with clients, suppliers, and business partners. By upholding the principles and rules outlined in the ECG Code of Conduct, they can ensure the success of the organization.

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ECG Code of Business Conduct details the ethical and legal principles that guide ECG and its employees in our work and services. All employees must become familiar with its contents and use it as a guide when they are unsure of what action to take. ECG employees, officers, and directors will conduct themselves in a consistent manner with sound business and ethical practices; appearance of impropriety to ensure and maintain public confidence in ECG; and ECG decision-making is fair, respectful, independent and impartial.

The Ethics Review Committee will be a selected group of executives who have a well-established record of showing high ethical standards and professional moral fortitude. They will work as a group to define the Code of Conduct. The expectation is that each and every employee of ECG will be held accountable in the Code of Conduct in their daily work performance. The guidelines should uphold the high ethical standards that clients will expect from the professionals employed by ECG. In addition to governing the ethical climate of ECG, the guidelines will have very clear and concise penalties outlined for violations of the Code of Conduct. Each employee and future employees will be required to undergo training and sign forms documenting this training on ethics and the Code of Conduct.

ECG was built on values, reputation and integrity. ECG employees are commitment in ensuring that we are inventive, engaging and continually striving for excellence. ECG employees are a valuable resource. Providing an atmosphere of valued employee communication, responsibility and involvement is strategic to ECG success as well as employee personal development and use of individual talents are encouraged.

ECG is committed to support the ambitions and growth of our employees as well as our customers. We are enthusiastic to deliver excellence in everything we do, our work, customer service and financial performance. ECG will be a responsible partner to our customers acting with integrity towards its shareholders, customers, employees, competitors and others who have the potential to be affected by ECG activities. We, as an organization, are driven by our customers and what they expect from ECG.

ECG is held to the highest standards in its operations and acceptance of principles of good corporate governance. There is a marriage of great values with its relationships with its stakeholders and providing timely information on its activities, performance and financial position. Our goal is to continue to deliver our customers with solutions and products they want and need. We will always deal with our customers in a fair and forthcoming manner and maintain the highest integrity in our deliver.

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ECG insists on integrity, honesty and fairness in all aspects of its business. No employee or officer is permitted to engage in any forms or bribes, personal gifts, favors. Payments are not acceptable in accordance with ECG policies and procedures. ECG strives to comply with the highest levels of integrity and accountability throughout the company. All records of transactions will be documented accurately and completed in a timely manner in accordance with ECG accounting principles.

In order to maintain ECG valuable reputation, compliance with our quality processes is essential. We will all work together to ensure prompt and consistent action against violations of this code. There are some situations that may be difficult to distinguish the difference between right from wrong. It is important that we have an approach to address new questions or problems. All employees will be expected to comply with the established Code of Conduct. Violations will lead to disciplinary actions including dismissal, notwithstanding civil or criminal action that may be taken.

In order to promote the reporting of violations of the Business Code of Conduct, we have incorporated a whistleblower policy in order to enable employees to submit complaints in an anonymous basis without fear of the complaints reported leading backed to the reporter along with no disciplinary action taken against them.

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A code of conduct is a set of rules outlining the expectations of a governing body on a particular group and can be defined as a general guideline for performance that enforces key ethics and severely discourages unethical, immoral, or illegal behavior. ECG employ codes of conduct to ensure members and employees act appropriately in regards to the governing body. A code of conduct will ensure that all the procedures of ECG are carried out properly. At ECG, a code of conduct can be either an introduction to ECG employee handbook or, in some cases, a completely separate document that is reviewed and signed at the time of hiring.

The business of sales and marketing involve the exchange of a good or service for money or other type of payment. When consumers seek information about or purchase an item, they expect the selling party to act with their best interests in mind. Individuals in the sales and marketing industry, according to the Direct Selling Association (DSA), assume responsibilities to their customers due to the personal nature of sales interactions. They have standards of conduct they must promote because society and other organizations expect this, according to the American Marketing Association (AMA). The values expressed in the code of ethics for sales and marketing reflect moral ideals and serves as a guide that is consistent with legal requirements against which sales and marketing professionals can weigh themselves and others.

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The conduct of ECG sales professionals should never purposefully be malicious, deceptive or unlawful. ECG sales person will need to be honest regarding facts about a service or product's price, quality, performance, value and availability. Customers must be given written terms of sales at the time of sale, and the order must be written clearly and legibly.

The values represented in the code of ethics for ECG sales person must include honesty, responsibility, fairness, respect and transparency. ECG sales professional should always be honest about the products and services offered, as well as honor promises and commitments made to customers. They are responsible for meeting the needs of customers, protecting private information and acknowledging obligations to stakeholders. ECG sales professionals should represent the company products and services in a way that is clear, not misleading and free from conflicts of interest. Also they should always understand and treat clients fairly regardless of race, gender, religion and so on. In addition, they should disclose risks regarding products or services and their prices.

When a consumer makes a complaint, ECG sales professionals should investigate the claim. If the complaint is about a sales professional, the company should promptly investigate the claim. ECG Sales professionals should always be up to date on laws that apply to their area of sales and ought to communicate such laws to clients when appropriate. Individuals working in a sales position must always maintain client confidentiality and protect client privacy at all times per the guidelines set forth by the company they represent and the law.

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ECG must commit to customer satisfaction and honor best practices in the marketing environment. All information on privacy policies and the policies on the transfer of personally identifiable information for marketing purposes should be displayed accurately and non-discretely for customer awareness. ECG should also deliver products and services as represented.

ECG employees must clearly, honestly, and accurately represent its products and services to customers and uphold the terms and conditions of services. They should also communicate in respectful and courteous manner with all clients and potential clients. All inquiries and complaints should be handled carefully and in a timely manner. Employees should also be mindful of maintaining appropriate security policies and practices to safeguard client information. It is very important that ECG and all employees follow the spirit and later of the law as well as the Guidelines.

All ads should be clear, honest, and accurate so that the consumer may know the exact nature of what is being presented. Photographs, illustrations, artwork, and the situations they describe should be accurate portrayals and current reproductions of the products, services, or other subjects they represent.

All marketing contacts should disclose the name of the sponsor and each purpose of the contact. No one should make offers or solicitations in the guise of one purpose when the intent is a different purpose regardless of the marketing channel used. No one should mislead a consumer as to who is making any marketing contact or the purpose of such contact. Disparagement of any person or group on grounds addressed by federal or state laws that prohibit discrimination is unacceptable.

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Successful businesses have good, loyal, and trusting relationships with their clients and stakeholders. Ethical behaviors and principles are an integral part of those relationships. The two elements give the relationship a pleasant and productive outcome (Zucker, 2009). In this era’s global market and economy, companies conducting business in international markets have to be especially diligent, observant, and meticulously cognizant of the behaviors and cultures of the companies they do business with. Observing the customs and courtesies is a form of respect and just good business practice. One of those courtesies may involve gifts. Our Code of Conduct will outline specific company policy on giving and receiving gifts from clients and stakeholders. We are governed by strict federal guidelines in this area and compliance is mandatory.

American businesses have been plagued with scandal involving bribery, corporate espionage, and theft. The savings and loan crisis sin the 80’s where billions of dollars evaporated because of criminal behavior and the Enron scandal that defrauded billions of dollars from investors are just two examples of unethical behavior on the world stage (Zucker, 2009). Because gift giving and receiving is subject to scrutiny for possible conflict of interest violations, ECG’s Code of Conduct policy will conform to federal, state, and local policy guidelines. 5 USC 7353 establishes guidelines for accepting and receiving gifts. The Title applies to government employees and anyone doing business with government employees. Gift giving and receiving is a sign of good will by the giver and the receiver. It is the giver and the receiver’s intent that is primarily what is often at odds with ethical and moral behaviors.

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Organizations are required by law to establish policies and guidelines on ethical behavior. Verizon’s Code of Conduct on gift giving and receiving provides that the exchange of gifts promote successful relationships in the workplace and good will. The Code also instructs its employees that even the appearance of influence should be considered before accepting or giving gifts. If there is a potential for inquiry, the gift should be reported and recorded on Verizon’s books and records.

Gift giving and receiving outside the workplace is acceptable among family and friends at weddings, birthday parties, showers, etc., as long as there is not a connection that the gift is company related. Even in those circumstances the gifts must not be frequent occurrences. The exchange of gifts with government officials carries special rules and federal guidelines. Employees must also follow the provisions of the Foreign Corrupt Policies Act (Verizon, 2008).

The Foreign Policies and Corrupt Practices Act was enacted in 1997 to make it illegal for business and organizations to use influence to receive goods and services from government officials. Specifically briberies including money or gifts of value offered to government officials or anyone when the employee has knowledge that the gift will be used to further the receipt of goods or services. Since ECG will be doing business in the international markets, our employees must be mindful of all the laws that govern our foreign relationships.

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Giving gifts is an excepted business practice to honor customs and courtesies of the client you are doing business with. Gifts should be of a nominal value and not violate the ethical policies of ECG or federal statutes. There are several details of the law employees need to be aware of before deciding to give a gift to a client or potential client. There are specific laws that regulate gift giving to and by government officials and employees acting on behalf of government officials. As we enter into the global market and compete for government contracts we will need to be careful to ensure all our employees are aware and abide by all governmental regulations.

Generating good will is accepted in small gifts representing our company or the country. Expensive gift-giving and receiving could be viewed and considered a form of bribery, which is strictly prohibited by the Federal Gratuity Statute 18 U.S.C. 201(c). (Campos, 2006). This restriction applies to all employees involved with the company doing business with the federal government. It also applies to previous employees and previous government officials having any association with the government contract.

If there is a link between the gift or gratuity provided and the service received, a violation has occurred. Gifts given or received do not include plaques, food, trophies, greeting cards, or other small gifts of little intrinsic value (between $20 and $50) (Campos, 2006). There are exceptions to the rule: if you have an established relationship with the government official (family or friend), then your gift giving or receiving is subject to less scrutiny. Employees must also be aware that single gifts that fall within the statutory dollar range, still cannot exceed and annual total of $50. Ethical violations are taken seriously by ECG and the federal government. Even the appearance of impropriety and wrongdoing should be avoided. If there is any question of potential violations employees should seek the advice and guidance of the Compliance Officer immediately.

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Conflicts of interests are generally forbidden or a company’s code of conduct for obvious reasons. In a 2004 article, Brian Sears defines conflict of interest as an action or action that keeps employees from making objective decisions about the employee’s performance. Some companies expand their definition and policies to also include the appearance of conflicts of interests (Sears, 2004). Conflicts and the appearance of conflicts of interest have ethical and legal consequence. Some acts or actions do not constitute criminal behavior however company policies and practices may impose some sort of employee censure or restrictions.

Giving and receiving expensive gifts in situations where the employee’s intent is to influence the actions or decisions of client or potential client would be considered a conflict of interest. For example, accepting an expensive watch from a company that is competing for a contract for services with ECG would be a conflict of interest. Other conflicts may not be as obvious so employees must be careful and knowledgeable of all conflict of interest laws and guidelines indicated in the Code of Conduct. The inappropriate use of office entails using one’s office in any way to effect goods or services for gain. Employees are also forbidden to use their position at ECG for gain if the use is in direct conflict with the Code of Conduct. Commercial transactions are those purchased from a person or company in which our employee has an interest, even casual. This conflict of interest is closely related to ethical violations caused by purchasing services and goods from family members.

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Another area of conflict is unauthorized outside employment. Employees are allowed to have outside employment if approved by the company and it does not violate any federal rules. Organizations in today’s society routinely contract goods and services from several different resources in order to minimize cost and maximize efficiency (supply chain management). The connection between these companies may be limited but even a minor connection between an ECG employee and a company they have outside employment with could constitute grounds for an inquiry due to potential of conflict of interest.

Conflicts of interests or potential conflicts should be reported immediately. A Conflict of Interest Form has been developed and is posted on the company website. Reports can also be anonymous through the ECG feedback line. ECG has a responsibility to shareholders, customers, and other stakeholders to act in a professional manner at all times. That responsibility extends to ECG employees. If there are instances or circumstances where there is a conflict with an ECG policy or the vision of integrity our company stands for, it is incumbent upon all to bring it to the attention of responsible personnel immediately. Conflicts of interests can destroy a company’s reputation as well as the ability to earn the loyalty and trust of clients. Documented violations will be handled in accordance with ECG Code of Conduct policies.

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At ECG, employees need to feel that they are being treated fairly and with respect. Avoiding conflicts is imperative to meeting that goal. Personal conflicts of interests as well as business and professional conflicts violations may put our company integrity at risk. Personal conflicts of interests are harder to control, but fairly easy to recognize. Workers form relationships on the job that may extend to their lives outside of ECG. It is those relationships that are the most troublesome; especially, if they are superior/subordinate relationships on the job.

Leadership must discourage familiarity between supervisors and subordinates outside of the work environment. That is not to say that supervisors and subordinates cannot socialize with each other away from the job. Subordinates should not be encouraged to call their supervisors by their first names in any setting. It would be too easy and comfortable to use that familiarity in the workplace and that would be a conflict of interest which could cause tension and negative feelings in the workplace. Other workers supervised by the same employee would quickly develop animosity or feelings that the friendship was used to show favoritism. The supervisor would lose the trust and loyalty of the employee and the workplace would become strained.

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Clients are the most essential asset to ECG success. Without clients, there can be no business. ECG has a deep respect for the client base and strives for a continuous good working relationship. The foundation of a good client relationship is the existence, promotion and practice of a sound client relations policy. This policy is a formal promise to our clients representing our commitment to their satisfaction. We are committed to ensuring that all our employees fully understand and our client relations policy and protocols and implement all requirements are followed. Company philosophy of ECG is to exceed expectations of our clients every time perform a job for them.

Long term relationships based on proven performance and mutual trust. ECG values our clients and we value clients who share our concept of relationship. Our goal is to provide our clients with a superior level of service, and to do with the utmost regardless for the quality of services. ECG views every client relationships as a partnership, and we understand that our success can only come as a result of the success of our clients. We believe in providing a real service to the client, and are considered a trusted advisor to obtain insight that only comes from forming a close valued relationship with our clients.

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Clients continually take inventory of their relationship with us. They review how our employees interact with theirs as a way to determine how much trust and faith they should put in the advice given by our organization. One of the key elements in maintaining a successful business relationship with them is to listen to their input.

ECG is a separate organization that is being retained by our clients for specific needs they have, but we don’t have intricate knowledge of what their plans are or how the rest of their organization works. Each client is different and as such will have unique business ‘personalities’. Each client should be treated according to who they are individually. By listening to each client and gaining an understanding of who they are, we enable them to feel as though they are special. As the relationship grows, ECG employees will be able to anticipate client needs which leads to being able to provide faster services.

ECG maintains a high standard of honesty and integrity in all of our business relationships. Our organizations business purpose is to provide our clients with a total package. Our clients may not be right all the time, but they always come first in our considerations. ECG policy is to provide exceptional service that is responsive to the needs of each client and ensures long lasting relationships with them.

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ECG is committed to make every effort to meet or exceed our client’s expectation with quality service and attention to detail that exceeds professional standards. Due to the nature of our business relationships, ECG employees will gain insight into how each client organization works. This affords them the ability to anticipate certain needs before they come to pass. Although this can be very beneficial, it is important to remain impartial to business deals that don’t specifically involve ECG. This would be a point when the lines of the business relationship can get crossed and possibly leaving the clients feeling violated. ECG should remain focused on the business at hand and leave the rest for the client to deal with.

There is also the potential for employees of ECG and employees of our clients to develop relationships that extend beyond the work environment. These relationships are discouraged but are not illegal so they must be monitored carefully for conflict of interest issues. Each ECG employee is responsible for maintaining high moral and ethical standards even when they are not at work. This is especially true in the cases involving these types of relationships. In the event of ethical violations stemming from them, they will be subject to applicable penalties as outline by the ECG Code of Conduct as well as any laws that may have been violated.

All ECG employees are to display the attributes of integrity, service before self, and excellence while performing duties on and off duty. To ensure that fair, honest, and accurate practices are incorporated into the atmosphere at ECG employees are expected to follow the following rules of conduct. To ensure the best standards are upheld at ECG the information utilized in the following slides was developed and modeled after the code of conduct utilized for over 10 years at Verizon (Verizon, 2010).

To begin, leadership, management, and other employees of ECG must always safeguard intangible and tangible property. This includes protecting property of ECG business providers, customers, or co-workers. ECG, business provider, customer, and co-worker property may not be given away, loaned, sold, taken, or otherwise disposed of, regardless of value or condition, without specific authorization and approval. The definition of property includes but is not restricted to, all communications, data, and tangible property.

Company property and funds consist of anything that represents or has financial value and must be handled responsibly, honestly, and in accordance with corporate policies. Unauthorized or personal use of corporate funds is strictly prohibited. Company credit cards may not be used for personal gain and must be used solely for official, authorized business purposes.

ECG employee benefits plans and company programs are given as compensation and therefore must be used honestly and responsibly. All ECG employees may not misrepresent their beneficiaries, covered members, health status, or any other facts, to include reasons for absence, in order to gain benefits which they or others are not entitled to.

ECG employees must document and maintain honest and accurate records regarding their work time, communications and activities. Leadership, management, and other employees may not instruct any other employee to fail to report or mislead work times, communications and/or activities. When submitting work time, communications and activities ECG employees are representing their factual and accurate performance metrics. Employees may report any questions about time, communication, and activity reporting, or any concerns about wage accuracy, claims for unaccounted work time, or improper/erroneous wage errors to ECG’s Human Resources department, the ECG Payroll department or to ECG Ethics and Compliance department.

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The information and communication systems, including mobile devices and company computers are given to employees to accomplish ECG business and are important assets that must be safeguarded by all employees. Employees must protect company data and information from accidental destruction, improper alteration, misuse, or unauthorized disclosure. Limited personal use of communications equipment is permissible so long as it is authorized in the department, by upper management, does not interfere with work responsibilities or ECG operations, incur inappropriate costs, violate the law, this Code of Conduct or other ECG policies.

Employees must safeguard and protect the security of any user ID, password, social security number, identification access number, or any other information that is used for any network application, computer or communication device. Only authorized, properly licensed and approved software is authorized for use on any ECG communication and/or information systems and its use is subject to applicable software owner’s license agreements. ECG employees must comply with all applicable policies to include this Code of Conduct when altering, using, accessing, acquiring, destroying or disposing, or communicating on data over a public network.

ECG employees may never use corporate systems to employ in unlawful activities, or activities that violate ECG policies, this Code of Conduct or that result in ECG’s embarrassment or liability.

Some examples of inappropriate use of ECG systems include: obscene, offensive, pornographic, harassing or discriminatory content, malicious software or instructions for compromising the company’s security, violation of others’ intellectual property rights, large personal files containing graphic or audio material, games, auction-related materials, or gambling, communications primarily directed to a group of employees inside the company on behalf of an outside organization, communications on behalf of commercial ventures, and unauthorized mass distributions, chain Letters, pyramid Schemes.

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ECG operations and divisions must be appropriately secured to protect ECG employees and customers. This includes and is not limited business plans and strategies, product/service development plans, marketing and technical research data, corporate facilities and locations, security procedures and protocols, passwords, computer and information systems, network facilities and operations, and employee and customer personal information.

ECG employees must take all precautions necessary to safeguard ECG’s premises and systems. Employees may not leave sensitive areas unlocked or unattended or visitors unescorted. Employees must request identification from unrecognized employees and wear proper, authorized identification badges while on ECG property. All suspicious activity or activity in violation to ECG policy or this code of conduct must be reported promptly to ECG security and the ECG Compliance Office.

Intellectual property includes but is not limited to information protected by ECG trademarks or copyrights, financial information, business practices, protected information, and information provide from consulting services rendered to clients by ECG employees. All intellectual property created from services rendered to and for ECG must ensure it is identified by or affixed with ECG’s trademark, service mark or copy right symbols. If employees are not sure of what protection is appropriate or necessary, or if employees believe disclosure or use by a third party is improper he/she/they must contact the ECG legal department and inform the ECG Compliance Office.

ECG employees must consider and protect the proprietary rights of others by complying with all agreements and applicable laws that protect the intellectual property rights of others, including all ECG business providers, customers, or competitors. Employees may not modify, perform, distribute, or copy third-party copyrighted materials or conduct file sharing of copyrighted materials.

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When it comes to trading in the stock market, one party is not supposed to have an unfair advantage over another. Insider trading is a scenario in which someone who has private information from a company makes a transaction in the stock market to benefit from this information. This is an illegal move, and it can result in stiff penalties for any offenders.

Insider trading is a process that involves information not widely available to the public. Insider trading occurs when someone makes an investment decision based on information that is not available to the general public. In some cases, the information allows them to profit, in others, avoid a loss.

When an individual obtains such information and uses it to his advantage to profit in the stock market, this is considered unfair. The person or entity that completed a transaction with the person with inside information was at a disadvantage. This other trader did not have access to the same information, and it may have cost him a great deal of money.

Depending upon the severity of the case, insider trading penalties generally consist of a monetary penalty and jail time. In recent years, the Securities and Exchange Commission (SEC) has moved to ban insider trading violators from serving as an executive at any publicly traded company.

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ECG Compliance Officer will be responsible for setting forth Policies and Procedures and monitoring adherence to the rules for the preservation of "Price Sensitive Information", pre-clearing of all designated employees and their dependents trades (directly or through respective department heads), monitoring of trades and the implementation of the Code of Conduct under the overall supervision of the Directors. They will also assist all the employees and Directors in addressing any Clarifications regarding SEBI (Prohibition of Insider Trading) Regulations, 1992.

Protection of Price Sensitive Information:

1. ECG’s employees and Directors shall maintain the confidentiality of all Price Sensitive Information. They must not pass on such information directly or indirectly by way of making a recommendation for the purchase or sale of securities.

2. Price Sensitive Information is to be handled on a "Need to Know" basis. Price Sensitive Information should be disclosed only to those within ECG, who need the Information to discharge their Duty and whose Possession of such Information will not give rise to a conflict of interest or appearance of misuse of the information.

3. ECG must limited access to confidential information.

4. The company files containing confidential information shall be kept secure. Computer files must have adequate security measure implemented.

5. The employees in the inside area should not communicate any Price Sensitive Information to anyone in Public Area

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This anti-fraud rule does not apply only to ECG insiders, employees, or executives. The prohibition also applies ECG associates, family members, and friends or anyone who possesses material non-public information at the time of the trade or tip. When irregular trading activity is detected in a company's stock, the stock exchanges and the SEC scrutinize all transactions made during the suspicious period under review. Once the government's radar is on, it will try to investigate and match securities transactions back to ECG personnel to discover any insider trading.

Any Director, officer, designated employee who trades in securities or communicates any information for trading in securities, in contravention of the code of conduct may be penalized and appropriate action may be taken by the company. Director, officer, designated employees of the company who violate this code of conduct will also be subject to disciplinary action by the company, which may include wage, salary freeze, suspension, withholding of promotions, etc.

According to the law, anyone found liable in a civil case for trading on inside information may need to pay the government an amount equal to any profit made or any loss avoided and may also face a penalty of up to three times this amount. Persons found liable for tipping inside information, even if they did not trade themselves, may face a penalty of up to three times the amount of any profit gained or any loss avoided by everyone in the chain of tepees. Individuals can be barred from serving again as an executive or a director of a public company and can also face private lawsuits.

Individuals who are convicted of insider trading face prison terms (the Sarbanes-Oxley Act increased the maximum length of sentences) and additional fines. In addition, violators are usually charged with mail and wire fraud and possibly with tax evasion and obstruction of justice. Corporations face additional penalties for failure to set up compliance programs and make reasonable efforts to prevent violations under the theory of "controlling person" liability. These penalties are not the only consequence of an insider trading violation and investigation. Publicity and embarrassment also surround the investigation, even if it does not result in any formal charges, damage can be done to an organizations reputation.

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Maintaining, preparing, and disclosing accurate records is paramount for ECG to maintain the high standards of honest, excellence, and performance that clients have come to rely upon. Therefore the following standards and practices are required for all ECG employees and representatives. Version has developed an incredibly long and though list of guidelines (Verizon, 2010) for its’ employees. The following additional areas of ECG’s Code of Conduct are modeled after theVerizon guidelines.

ECG is devoted to providing and maintaining truthful information that completely satisfies all applicable legal requirements to include the Sarbanes-Oxley Act of 2002, this act (Sarbanes-Oxley Act, 2003) is mandatory to all organizations large and small. The act protects whistle blowers, requires disclosure of balance sheets, and requires accurate record keeping.

Employees must develop accurate records that capture the truthful nature of the activities and transactions that they record. Employees must resolve discrepancies in any records and make/take appropriate actions to ensure their correction. Any employee that learns or suspects a record contains errors or is misleading must promptly inform his/her supervisor and the ECG Compliance Office, and the business providers or customers if applicable.

ECG will not tolerate the inappropriate alteration or falsification of records. It is improper to intentionally take any action that leads to the creation of misleading or false records, to include activities such as providing incompleteinformation to, or withholding information from someone preparing a record. It is never acceptable to direct another employee to approve or prepare a misleading or false record. Any employee asked to perform such an activity must immediately inform the requester and contact the ECG Compliance Office.

ECG is committed to facilitating educated investor decisions and to transparency in financial reporting to enhance investors’ knowledge of the company’s business and activities. All disclosures made in public documents and financial reports must be complete, honest, accurate and understandable.

ECG employees should be particularly careful about disclosing such information when making proposals or presentations to business providers, customers, or other third parties. Employees must not selectively disclose any materialregarding ECG, plans, developments, results, financial condition, business operations or securities. Employees must provide full cooperation to internal and outside auditors. Falsifying, misleading, or failing to cooperate with auditors and investigators will result in disciplinary action up to and including termination from ECG.

Company records must be maintained according to ECG’s Records Management Policy, the Code of Conduct, all other ECG policies, and all applicable laws. If a disparity exists between any of the above the disparity must be reported to ECG’s Compliance Office and the employee’s supervisor.

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Safeguarding of company information is as critical at ECG as it is at any other large corporate business. Therefore the following rules must be practiced and enforced.

Employees must protect publicly available information in which ECG or others have intellectual property rights, non-public information entrusted to ECG, and non-public information that includes insider information.

Employees must protect non-public corporate information by following company procedures and policies as well as contractual agreements for protecting, retaining, using, identifying, and disclosing of information.

Employees are not authorized to release non-public corporate financial data to third parties or the public unless specifically authorized by the ECG information controller.

Employees are not allowed to release non-public information to the internet, third parties, or the public unless they are specifically authorized to do so by a vice president or above level supervisor, public affairs, and the ECG Policy and Communications Department.

ECG employees may only disclose non-public corporate information to other ECG employees with a business related, legitimate requirement for the said information.

Any ECG employee to receive a subpoena or court order requiring the disclosure of non-public information must coordinate their response with ECG’s Legal Department and Security and inform ECG’s Compliance Office.

The obligation to protect ECG’s non-public information and intellectual property rights continues even after the employee leaves ECG.

Employees cannot accept non-public information belonging to third parties unless the disclosing part is authorized to do so, and ECG has the owner’s written permission according to an agreement approved under ECG’s Legal Department.

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As the leader for providing top quality, expert consulting services around the nation ECG consultants may find themselves working and interacting with the Government and the Department of Defense. In order to provide the best practices possible ECG employees must follow the following rules of conduct.

Employees should consult the Legal Department to identify additional procedures, regulations, and laws that must be followed when dealing with government agencies as customers. There are specific procedures, regulations and laws related to contacts with government officials during active government procurements, limitations on contacts, accuracy in billing, entertainment, and gifts that must be followed. ECG employees must consult the Legal Department to ensure proper compliance and report any perceived or actual violations to the ECG Compliance Office.

ECG may receive court orders seeking information about employee communications or about ECG customers. Employees may neither deny nor confirm to any unauthorized person any information concerning or the existence of a court order, warrant, or subpoena. ECG employees should immediately contact the ECG Legal Department, Security, and the Compliance Office when these types of inquires or requests are made.

Any employee that receives any legal documents to include subpoenas, warrants, summons, court orders, attorney, government, or law enforcement correspondence must forward to and inform the Legal Department of the documents.

ECG employees must take all required steps needed to ensure the protection of national security and classified information and must coordinate all activities related to this kind of information with Legal and Security Department personnel with appropriate clearances.

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The Code of Conduct developed by the Ethics Review Committee of ECG is designed for the safety and protection of the organization as well as all employees. Violations should have appropriate consequences equal to the severity of the crime. The best method for catching these violations will be through effective reporting methods. It is the responsibility of the knowledgeable executives of the Ethics Review Committee to pull from the collective past experiences to determine the safest and most reliable reporting methods.

The ECG Code of Conduct should address the various methods available for employees to report potential violations. An ethics violation reporting hotline, website, or ample anonymous drop boxes throughout the various office spaces would be highly recommended. This allows reporting to be a free action any employee can utilize.

Reporting methods should be safe in order to allow employees to not fear harm or reprisal when performing such actions. Certain violations will be considered minor in nature and do not require personnel to have their employment terminated. This means the reporting employee will have to continue working with these individuals. This will lead to potential tense or hostile work environments. In order to best prevent this, ECG has incorporate a “whistle blower” policy. ECG will continue to establish reporting sources for anonymity as well as an open door policy with HR.

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ECG should have a policy to investigate any reports of misconduct with a non-biased approach.

There should be a separate entity for investigative procedures. Such a group should involve the compliance officer, legal office representative, security personnel, human resources, public affairs, and possibly the law enforcement agency responsible for the type of accusation.

Investigations should be able to handle investigations with discretion and thoroughness to ensure the accusations are true. While all investigations should be handled seriously, it is important to ensure the reports are legitimate prior to causing damage to a person’s career. If a subordinate is angry with their manager they could play ‘whistle blower’ stating they have overheard conversations indicating a potential insider trading violation, this would be considered a very serious offense dictating (according to policy) the employee immediately place on temporary leave without pay pending the outcome of the investigation. Well now that person is out of a pay check for a while and their reputation is tarnished.

Accusations can be investigated carefully without personnel becoming aware of it initially. These are the first steps that should be conducted. In the event of there actually was insider trading going on, it would be best to catch the perpetrator with their ‘hand in the cookie jar’ and the saying goes. This also solidifies the case against them.

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The Ethics Review Committee is responsible for defining the Code of Conduct and ensuring its thoroughness. They should be highly trustworthy professionals capable of determining appropriate punishments for the crime. Legal, human resources, management, and United States law should be taken into account when deciding upon a course of action for ECG Code of Conduct violations. There should also be statements in our Code of Conduct addressing how enforcement will occur.

Punitive actions should be determined bases on the type of violations that have been reported and confirmed. A person who is lazy in their job should not necessarily lose their job if it was a onetime incident that didn't cause damage. A person who has been proven guilty of insider trading should face the full extent of the law.

One of the most common ethical violations that happen in the work environment is theft. Often time’s people don’t realize something as simple as using a staple for stapling non-work related documents together would be considered stealing. The staples were paid for with company funds and for the purpose of completing company related tasks. Petty thefts that didn’t cause harm or damage to the organization, should have minor implications such as being written up. Due to the detriment of losing lots of employees quickly over accusations, certain violations that have major impacts on the organization should have the most severe corporate punishment of instant termination and security escort off the premises.

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Questions & Concluding Remarks

Today We Covered ECG’s new Code of Conduct Including:

General Business Conduct

Sales and Marketing Practices

Business Courtesies/Gifts

Conflicts of Interest

Relationships with Client, Suppliers, Influential Parties, and Coworkers

Use of Company, Client, and Supplier Resources

Insider Trading

Other Areas of Compliance

Reporting, Investigating Measures, and Punitive Actions

Does Anyone Have Any Questions?

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References

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Campos, L.M., Gallatin, J.P. (2009). Hold On A Minute: Gift Giving to Government Officials. Retrieved from http://www.acquisitioninstitute.com/uploads/GIFT_GIVING.pdf

Code of Conduct. (n.d.). Morality Within the Context of Code of Conduct and Ethics. Retrieved from http://www.conductcode.com/Code-of-Conduct-and-Ethics.html

J.P. Morgan Chase & Co. (2011). Service One 2 One – Providing Outstanding Client Service. Retrieved from https://www.chase.com/online/commercial-bank/about-serviceone2one.htm

KRBL Limited. (n.d.). Code of Conduct for Prevention of Insider Trading in Securities of the Company. Retrieved from http://krblrice.com/code-of-conduct-insider-trading.html

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MacDonald, C. (2008). Creating a Code of Ethics for Your Organization. Retrieved from http://www.ethicsweb.ca/codes/

Mobile Marketing Association. (2008). MMA Mobile Marketing Association: Global Code of Conduct. Retrieved from http://www.mmaglobal.com/codeofconduct.pdf

Nold, A.G. (2011). Tips for Great Client Relationships. Retrieved from http://www.thinkvitamin.com/business/tips-for-great-client-relationships/

Pitt, H.L. (2004). Instilling a Corporate Culture of Integrity, Ethics and Compliance –Setting the Tone at the Top. Retrieved 23 July from http://www.kaloramapartners.com/ArticlePF.aspx?Id=16

Power, R. (2011). United States Military Code of Conduct: Military Rules for Prisoners of War. Retrieved from http://usmilitary.about.com/od/justicelawlegislation/a/codeofconduct1.htm

Sears, B. (2004). Conflicts of Interest. Retrieved from http://www.ethics.org/resource/conflicts-interest

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Verizon. (2010). Code of Conduct. Retrieved from https://www22.verizon.com/about/careers/pdfs/CodeOfConduct.pdf

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