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Risk Awareness: The Need for Transparency in Operations Tom McNamara Senior Vice President, Global Sales EthicsPoint.

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Presentation on theme: "Risk Awareness: The Need for Transparency in Operations Tom McNamara Senior Vice President, Global Sales EthicsPoint."— Presentation transcript:

1 Risk Awareness: The Need for Transparency in Operations Tom McNamara Senior Vice President, Global Sales EthicsPoint

2 Risk is…  Real & reputational  Compliance-based Regulatory Contractual Socially responsible  Manageable Reputation-based fraud is 5 to 7 times more impactful to share value than financial fraud. FEI Professional Development Session

3 Risk Mitigation: The Process  Understand your risks  Evaluate Probability Impact Velocity  Mitigate Communication and training Plan contingencies  Monitor Compliance obligations Risk events Stakeholder feedback  Respond and learn Risk Event Probability ImpactMitigation Contingency Monitor FEI Professional Development Session

4 Operational Feedback and Reporting Risk Awareness Knowledge Risk High Low 0%100% © EthicsPoint, Inc All Rights Reserved Open Door Policy Hotline/Helpline Policy & Procedures Compliance Training Disparate Data Silos Survey Feedback Transparency FEI Professional Development Session

5 Disparate Data “Organizations often support between five and eight different database technologies, and 50 different sources of data from the operational side.” - Gartner Research Vice President and Research Director Kevin Strange FEI Professional Development Session

6 Problem: Lack of Transparency  Only 3% of misconduct reports come through the hotline -- ERC 2009 National Business Ethics Survey  Compliance and ethics receives only 6% of available employee information about top risks -- Compliance and Ethics Leadership Council research 50% of observed business misconduct is never reported 60% of information reported to managers by employees is “siloed” 21% of reported information relevant risk is shared with legal or others, but is not available to compliance  Issue is getting worse with three distinct generations in the workforce FEI Professional Development Session

7 Information Gathering Knowledge |Transparency Risk High Low 0%100% Open Door Policy Hotline/Helpline Survey Feedback Systems and Technology Process Policy & Procedures Compliance Training Data Integration Voluntary Buffer Culture Analysis Organizational Complexity Vertical Complexity Number of geographies served Number of organizational entities Employee Headcount Union/Non-Union Weak Culture/Strong Culture Historical Significance Regulatory Requirements Industry Dynamics Common Risk Components Risk Appetite Social Responsibility Understanding Risk FEI Professional Development Session

8 8 What should you be capturing?  Industry-based operational risk Fraud Harassment Issue or event  Security control breaches  Internal audits  Regulatory and contractual compliance issues  Hotline (web and telephony)  Open door policy (internal reports)  Exit interviews Gain transparency into siloed activities and disparate data sources. FEI Professional Development Session

9 Do you promote awareness?  Employee awareness  Vendor and representative awareness  Repeated communication events  Feedback to reporters  Sanitized reports and newsletters FEI Professional Development Session

10 Questions? FEI Professional Development Session Tom McNamara Senior Vice President, Global Sales EthicsPoint © EthicsPoint, Inc All Rights Reserved


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