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JOURNEY TO ETHICS EXCELLENCE CLAIRE LEWIS HEAD, COMPLIANCE COORDINATION & CORPORATE COMPLIANCE OFFICER SNC-LAVALIN GROUP INC. December 2014.

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Presentation on theme: "JOURNEY TO ETHICS EXCELLENCE CLAIRE LEWIS HEAD, COMPLIANCE COORDINATION & CORPORATE COMPLIANCE OFFICER SNC-LAVALIN GROUP INC. December 2014."— Presentation transcript:

1 JOURNEY TO ETHICS EXCELLENCE CLAIRE LEWIS HEAD, COMPLIANCE COORDINATION & CORPORATE COMPLIANCE OFFICER SNC-LAVALIN GROUP INC. December 2014

2 AGENDA Reputational Restoration………………………………………………………… Our Commitment to Ethics Excellence…………………………………………. Delivering on Our Commitment: Progress To Date…………………………… Our Ethics & Compliance Program and its 4 Building Blocks……………….. Prevention: Tone from the Top / Policies / Training / Due Diligence………... Detection: Compliance Control Framework / Hotline / Investigation...……… Respond and Improve……………………………………………………………. The Independent Compliance Monitor…………………………………………

3 A KEY OBJECTIVE: Restoring Reputation and Trust with All Stakeholders 3

4 OUR COMMITMENT TO ETHICS EXCELLENCE Our ambition is to become the global benchmark against which other companies measure themselves. We strive to set a higher standard for: (1)How ethics is woven into the fabric of the way we do business, and (2)Transparency in the way we report to our stakeholders. 4 SNC-Lavalin is committed to doing business with highest integrity

5 DELIVERING ON OUR COMMITMENT (1) Early Steps  Key leadership and structural changes  Updated Code of Ethics and Business Conduct  EthicsPoint Hotline  Ethics and Compliance Committee  Agent Review Committee  Initial Revision of Corporate Policies including: Commercial Agents and Representatives Policy (#1151) Management Override Policy (#1001) Levels of Authority Policy (#1009) Political Contributions Policy (#1010) Employee Expense Account Policy (#1453)  Third party screening of new hires and appointments to the Management Committee and the Office of the President 5

6  New Chief Compliance Officer function established on March 1, 2013  Ethics and Compliance Awareness Session at April 2013 Management Committee  Global Compliance Organization fully ramped up since June 2013  Compliance Consultation Centre established  Compliance intranet-website established  90 days Amnesty Program from June until August, 2013  1 st Compliance Officer Meeting in July 2013  Anti-Corruption Manual issued with guidance information on relevant Compliance topics  New Policy on Business Partner Compliance Due Diligence effective August 1st, 2013  Compliance Investigations integrated in Ethics & Compliance function in September DELIVERING ON OUR COMMITMENT (2) Establishment of Compliance Organization

7 DELIVERING ON OUR COMMITMENT (3) Implementation of Compliance Processes  External validation / monitoring of compliance program implementation by WBG independent compliance monitor started August 2013  Global Compliance in-person training program started in September 2013  Initial report by independent compliance monitor submitted to the World Bank on December 13, 2013  Business Partner Compliance Due Diligence workflow supporting IT-Tool established in December 2013  2 nd Update of the Code of Ethics and Business Conduct effective January 2014  New Policy on Gifts and Hospitality issued in January 2014  Specific key-user training on Compliance Due Diligence process and Gifts and Hospitality Policy started  New Policy on Prohibition of Facilitation Payments issued in February

8 DELIVERING ON OUR COMMITMENT (4) Continuous Improvement  2 nd Update of the Code of Ethics and Business Conduct effective January 2014  SNC-Lavalin gets AMF approval to bid on Quebec public contracts in February 2014  Employee certification on the updated Code of Ethics and Business Conduct performed during Q (99.99% certification)  Launch of New Governance Framework: “House of Policies”  2 nd Compliance Officer Meeting in April 2014  First Semi-Annual Report issued by the independent compliance monitor to the World Bank in May 2014  Announcement to acquire Kentz Corporation Limited, a leading Oil & Gas services company with 14,500 employees operating in 36 countries on June 23, 2014 following extensive Ethics & Compliance due diligence  Comprehensive Ethics & Compliance Risk Assessment, July-August

9 9 ETHICS & COMPLIANCE PROGRAM: 4 BUILDING BLOCKS

10 PROGRAM IMPLEMENTATION AND VALIDATION 10 P REVENT Tone from the Top Policies and Procedures Compliance Risk Management Training & Communication Support and Advice Business Partner Due Diligence M&A Due Diligence Personnel Processes Collective Action D ETECT Effective Controls Resources & Skills for Global Investigations Regular E&C Audits Compliance Reviews R ESPOND Disciplinary Sanctions Unbiased Consequences Remediation of Systematic Deficiencies Prevention of Recurrence M ANAGEMENT R ESPONSIBILITY C OMPLIANCE O RGANIZATION I NDEPENDENT C OMPLIANCE M ONITOR / E XTERNAL V ALIDATION

11 PREVENTION  Tone from the Top  Policies and procedures  Education and training tailored to compliance risks  Clear communications  Compliance organization as trusted advisors  Business Partner due diligence  Integration in personnel processes  Collective action against corruption 11 General focus on prevention of wrongdoing through:

12 TONE FROM THE TOP  Clear and consistent messages from top leadership team  Engage middle management in compliance communication  Include compliance messages in regular management meetings and events  Management leads by word and deed  Encourage open communications  Reiterate that everyone is responsible for ethics and compliance  Recognize exemplary ethics and compliance behavior  Integrate ethics-and-compliance-related performance criteria into compensation system 12 All managers have to deliver the Tone from the Top:

13 POLICIES AND PROCEDURES  Business Partners  Gift & Hospitality  Facilitation Payments  Political Contributions  Sponsorships & Donations  Reporting of Misconduct  Investigation Protocol  House of Policies 13 Maintain a Framework of Good Governance

14 EDUCATION AND TRAINING 14 Create appropriate awareness with staff at all levels TARGET#STATUS TRAININGTARGET GROUP As of July 15, 2014 In-Person Training Anti-Corruption Business Partner Overview General Management Procurement, Business Development, Project Management, Government Relations 3156 employees globally 2628/3156 trained 180 sessions to date 83 various office & project sites ExCom / OpCom Board of Directors 18 11April 14/2014 Code of Ethics Certification All staff / consultants by March 31 st, % Certified Tone at the top

15 Angola Cameroon Equatorial Guinea Sweden Germany Poland Romania COMPLIANCE IN-PERSON TRAINING 15 In person Anti-Corruption and Business Partner Policy Training to be provided to approximately 3156 employees in ‘sensitive roles’ 8 U.S. cities / 29 Canadian locations / 46 international locations / approximately 200 training sessions / 4 languages 2628 employees in ‘sensitive roles’ have received training to date As at July 15, 2014 Venezuela Colombia Panama Peru Chile Brazil New Caledonia Australia Indonesia South Korea Malaysia India Russia South Africa Algeria Morocco Tunisia Belgium France U.K. Egypt Jordan Saudi Arabia U.A.E. China Thailand Canada United States

16 16 COMPLIANCE COMMUNICATION  Internal Communication Frequent and consistent placement of compliance messages Use of all possible communication channels  External Stakeholder Management Clients Business partners and suppliers Governmental agencies Industry associations Media Clear and Consistent Messages to All Stakeholders:

17 17 NEW ETHICS & COMPLIANCE INTRANET PAGE  Useful information on compliance  Frequently asked questions  Compliance process descriptions  Contact information for compliance  Available in French and English  Frequently updated

18 ANTI-CORRUPTION MANUAL A new resource intended to complement the Code of Ethics, setting out mandatory principles in seven (7) key corruption risk areas: 1.Gifts and Hospitality 2.Prohibition of Facilitation Payments 3.Corporate Charitable Donations 4.Sponsorships 5.Business Partners 6.Recordkeeping 7.Mergers and Acquisitions, Joint Ventures, and Minority Stakes The Manual provides information on consultation and approval protocols for a range of common business activities: Compliance Officers are prominently featured as a key point of contact. 18

19 19 COMPLIANCE ORGANIZATION Board of Directors President and Chief Executive Officer Chief Compliance Officer Project Office Compliance Investigations Environment & Water Compliance Compliance Training and Consultation Latin America Compliance Mining & Metallurgy Compliance General Construction compliance Transportation Construction Compliance Compliance Coordination Europe Compliance Oil & Gas Compliance Operations & Maintenance Compliance Infrastructure Engineering Compliance Compliance Program, Monitoring & Reporting Infrastructure Group Compliance Infrastructure Concessions & Investments Compliance Power Compliance Ress., Env. & Water Group Compliance Africa, Asia & Middle-East Compliance Corporate Functions Compliance

20 COMPLIANCE SNC-LAVALIN 20 1.Promote an ethics-based culture in day to day business 2.Support tone from the top within BU/regions 3.Encourage reporting of compliance violations and concerns 4.Develop and implement training and awareness initiatives 5.Provide compliance advice and support to employees 6.Develop and execute compliance operating plans within BU/regions 7.Conduct compliance monitoring, oversight and reporting 8.Coordinate compliance input for acquisitions, joint ventures, and related transactions Mandate and Responsibilities

21 21  Full transparency and accountability for third party risk  Risk level of the proposed relationship between SNCL and the Business Partner will determine the depth of necessary Compliance Due Diligence (CDD) and the required level of authority for management approval  Responsibility for CDD rests with the Business Unit that wants to engage the Business Partner  Overall process is supported by a user-friendly IT-solutionIT-solution BUSINESS PARTNER DUE DILIGENCE Basic Red Flag Evaluation Integrity Check Lower Risk Medium Risk Higher Risk Risk AssessmentDue Diligence Higher Risk Medium Risk Lower Risk Approval BU LoA BU EVP BU CO Chief CO BU EVP BU CO © SNC-Lavalin

22 M&A COMPLIANCE DUE DILIGENCE Thoroughly analyzing the target company’s Ethics & Compliance standards in a dedicated Ethics & Compliance Due Diligence work stream Measuring the target company’s Ethics & Compliance status-quo against the reference framework of the 11 Integrity Compliance Guidelines of the World Bank Group Reviewing all Ethics & Compliance relevant documents and information made available in the data room Performing integrity checks on the target company’s senior management and ownership structure Conducting in-depth personal interviews with the target company’s senior management, including the CEO, CFO, Compliance Officer and other key functions Developing a detailed integration plan along the identified gaps between SNC-Lavalin’s and the target company’s Ethics & Compliance program 22

23 GOAL STRUCTURE Financial Objectives (Overall Weight: 2/3) Non-Financial Objectives (Overall Weight: 1/3) Objective 1 Ethics and Compliance (25%) 15% - Company Program Implementation: continue to implement an effective and sustainable ethics and compliance program 10% - Program execution: effectively execute and operationalize the Ethics and Compliance Program within area of responsibility HSSE (10%) Goal 1 Goal 2 … Objective 2 Strategy, Organization and People (65%) Goal 1 Goal 2 …

24 COLLECTIVE ACTION AGAINST CORRUPTION  Partnering Against Corruption Initiative (PACI)  United Nations Global Compact  Transparency International  International Anti-Corruption Academy (IACA)  Construction Sector Transparency Initiative (CoST)  Ordre des Ingénieurs du Québec  Endow Faculty Chair on Global Business Ethics at Canadian University  Harvard Business School Case Study 24 Several initiatives being explored to promote fair and equal market conditions:

25 DETECT AND MONITOR  Effective controls  Resources / skills for global deployment of compliance investigations  Regular Ethics & Compliance audits  Regular compliance reviews  Periodic and “spot” risk assessments  External review and assessment of program 25 Identify misconduct and compliance gaps through:

26 COMPLIANCE CONTROL FRAMEWORK 26 “Tone from the Top” Compliance Organization Case Monitoring Effectiveness Tracking Training & Program Communications 4 Implementation of Policies and Procedures 3 rd parties / Business Partners Tender & Contracts Gifts & Hospitality Finance & Accounting Integration with Personnel Processes Independent and continuous testing of the effectiveness of all modules of the SNC-Lavalin Compliance Program

27 CHANNELS FOR WHISTLEBLOWING AND CONSULTATION 27 TELL USASK US Compliance Consultation Centre (CCC) Requesting advice and support on compliance in business activities By Channel Purpose How to contact ? ? ! ! Duty to Report Ethics and Compliance Hotline (EthicsPoint) Amnesty Program* Reporting of Allegations and Complaints Reporting of own involvement in wrong doing Any Channel By Phone + Online Any Channel * Amnesty Program period from June 3 to August 30, 2013

28 RESPOND  Swift and fair disciplinary sanctions  Unbiased consequences regardless of position / performance in the organization  Remediation of systematic deficiencies and harm to immediately stem any further consequences  Prevention of recurrence  No Retaliation 28 Measures to respond to improper conduct

29 COMPLIANCE INVESTIGATION  “Duty-to-report” and EthicsPoint hotline are important enablers in order to enforce compliant behavior and to sanction misconduct  Highly experienced investigation team consisting of 15 investigators with professional investigation background was set up to investigate compliance violations, separate from internal audit function  Clear mandate for compliance investigations  Investigation reports are issued to Ethics & Compliance Committee, who will approve disciplinary sanctions and further preventive measures 29 Expeditious investigation of potential misconduct:

30 CONTINUOUSLY IMPROVE  Encourage open discussion and feedback  Debrief on all incidents  Also identify “near misses”  Tracking of remediation activities  Continuously look for improvement opportunities  Re-align policies and processes  Communicate lessons learned  Walk the talk and recognize role model behavior 30

31 INDEPENDENT COMPLIANCE MONITOR  Engaged by SNC-Lavalin in accordance with a Negotiated Resolution Agreement, the Monitor reports to the World Bank  Reviews the implementation and effectiveness of the SNC- Lavalin Ethics & Compliance Program, measuring against the Integrity Compliance Guidelines of the WBG  Provides recommendations for further improvements of the Ethics & Compliance Program 31 Providing External Validation of Compliance Program

32 32 1. Prevent 3. Respond2. Detect Instruments to identify misconduct and compliance gaps Preventative systems and controls to avoid compliance violations Measures to discipline and remedy improper conduct and prevent its recurrence INDEPENDENT COMPLIANCE MONITOR The Monitor notes that, while challenges remain, “…SNC-Lavalin has continued to demonstrate deep commitment to its Compliance ‘journey’ and to continue to make steady, strong, and visible progress down that path”. *  Extract from the Monitor’s First Semi-Annual Report, May 2014 “…the Compliance Group’s strong leadership in not only cementing the measures already put in place since 2012 but by continuing to evolve the program” *  Extract from the Monitor’s second Semi-Annual Report, November 2014

33 INDIVIDUAL RESPONSIBILITY IS KEY! 33 Questions to guide you towards compliant and responsible behavior Is it the right thing for SNC- Lavalin? Is it consistent with my core values and SNC-Lavalin’s? Is it legal? Is it ethical? Is it something I am willing to be held accountable for? If the answer to those questions is “Yes”, Don’t worry, be confident!

34 SNC-Lavalin strives to keep its global community informed of its progress towards achieving the best ethics, compliance, governance, quality, sustainability and health & safety standards in everything that it does. 34 For more information on how SNC-Lavalin is delivering on its commitment to ethics excellence, Follow Us online:

35 WE CARE embodies SNC-Lavalin’s key corporate values and beliefs. It is the cornerstone of everything we do as a company. Ethics, health and safety, employees, the environment, communities and quality: these values all influence the decisions we make every day. And importantly, they guide us in how we serve our clients and therefore affect how we are perceived by our external partners. WE CARE is integral to the way we perform on a daily basis. It is both a responsibility and a source of satisfaction and pride by providing such important standards to all we do. WE CARE about the health and safety of our employees, of those who work under our care, and of the people our projects serve. WE CARE about our employees, their personal growth, career development and general well- being. WE CARE about the communities where we live and work and their sustainable development, and we commit to fulfilling our responsibilities as a global citizen. WE CARE about the environment and about conducting our business in an environmentally responsible manner. WE CARE about the quality of our work. WE CARE about being world-class in matters of governance and ethics for our shareholders, clients and employees.


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