1. Beyond Compliance
Enrique Aznar

2. DOING
THE RIGHT THING

3. I believe that …
The purpose of a company is to fill a gap, to satisfy the needs of Society
There is strong interdependence between business and Society
Businesses are a powerful tool for economic development
Responsibility towards people and the planet is central and vital to a company’s success
There is a direct and indirect relationship between social responsibility and financial performance 7

4. The challenges Map of freedom © Freedom House, 2009
Corruption perception
index © TI, 2013

5. Business Ethics & Integrity: the key questions10
We are concerned for future generations. Our children and grandchildren will appreciate our decisions to help others 9
We purposely seek both social and financial return on corporate investment 8
We seek social return on corporate investment as a desired by-product of financial investment 7
We actively avoid causing harm to others (i.e. our investment decisions include environmental and social impact assessment and response) 6
We comply with both the letter and spirit of applicable laws and company policy (i.e. we proactively evaluate and manage risks, including legal and reputational risks) 5
We comply with the letter of the law and company policy (i.e. strict compliance with local rules even if these are inferior to international standards) 4
We are concerned that reputation may be harmed by some of our actions and we react to risk 3
Minimum legal compliance 2
Avoid being caught with "dirty hands" 1
Avoid jail
Self-preservation – How do I cover up?

6. return as a desired by-product of our financial investment 201x
201z
201y
We seek social
return as a desired by-product of our financial investment
201x
Beyond Compliance:
We strive to minimize the social and environmental impact of our activities
We comply with applicable laws and company policy 8

7. Integrity drives business performance30
There is a correlation between health of corporate culture and total shareholder return 20 10
10-Year TSR (Percentage)
(10)
(20)
(30)
(40) 2 4 6 8 6. 2
Overall Integrity Index Score
Correlation (r) = 0.58 Significance Level of Correlation: P-value < 0.01 Summary: Positive relationship; statistical significance
n = 34.
© 2010 The Corporate Executive Board Company. All Rights Reserved.

8. Build a strong ethical culture
“A strong ethical culture directly supports a strong compliance program.
By adhering to ethical standards, senior managers will inspire middle managers to reinforce those standards.
Compliant middle managers, in turn, will encourage employees to strive to attain those standards throughout the organizational structure.”
In short, compliance with the FCPA and ethical rules must start at the top.
DOJ and SEC thus evaluate whether senior management has clearly articulated company standards, communicated them in unambiguous terms, adhered to them scrupulously, and disseminated them throughout the organization.”
SEC/DOJ resource guide to FCPA

9. A proposed framework (UNGC)
Human
Rights
Labor standards
Environment (Health & Safety)
Anti-Corruption
(Business practices)
United Nations Global Compact Principles
Businesses should support and respect the protection of internationally proclaimed human rights; and
• make sure that they are not complicit in human rights abuses.
Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
• the elimination of all forms of forced and compulsory labor;
• the effective abolition of child labor; and
• the elimination of all forms of discrimination in employment and occupation.
Businesses should support a precautionary approach to environmental challenges;
•undertake initiatives to promote greater environmental responsibility; and
• encourage the development and diffusion of environmentally friendly technologies.
Businesses should work against corruption in all its forms.
Integrity Focus Areas
Privacy
Child labor
HSE Management System
Bribery:
Gifts & Entertainment
Third parties and M&A
Consultancy activities (lobbyists)
Donations & Sponsorships
Freedom of Expression
Energy Efficiency & CO2 emissions
Fair competition
Employee representation
Supply chain management
Responsible Gambling
E-waste
Conflicts of Interests
Measuring
Reporting
Multi-Stakeholder Engagement

10. Stakeholder grid / Impact Assessment
ECONOMIC
SOCIAL
PLANET
Share Value
Financial results
Business Conduct
Reputation
Health & Safety
Human Rights
Labor standards
Community engagement
Environmental protection
Biz Strat
Business Strategy
Governments & Regulators
Regulators
Governments
Municipalities
Customer and their communities
Customers
Communities
NGOs
Media
Suppliers
Sales dealers and distributors
Our People
Employees
"Shareholders"
Investors
Local shareholders
Banks
Insurers
Ranking: Not relevant >>> Completely relevant

11. The evolution of a Compliance program: from Defensive Compliance to Strategic Ethical Leadership
Responsible behavior
Share value
Impact on operations
Impact on brand value
201x
201z
2020
Defensive
Compliance
Managerial
Strategic
Code of Conduct
Tone at the Top
Compliance organization
Policies & procedures
Training
Goal

12. Proposed gradual evolutionTO
Compliance as a competitive advantage
Ethical behavior
Compliance programs as business processes
Compliance team as tool provider and business enabler
FROM
Compliance as a duty and obligation
Code of Conduct certification
Compliance programs to “check the box”
Compliance team as communicator and brand-manager
MIA-AAA

13. Managerial Compliance
Focus on
Governance
Policies
Controls
Rules
Org-charts
Goals & Objectives
Culture
Values
Principles
Habits
Mindsets
Leadership
Connect & Collaborate
Compliance as a Management Tool
Compliance owned by first line of defense
Identification of KPIs/KBIs (Key Behavioral Indicators)
Progress to be reported at Operational Review Boards
Impact on Performance Evaluation

14. Strategic Compliance
Compliance or “Business Ethics” as a strategic tool to
Make and measure the Company’s contribution to Society and the communities we are in
Focus on positive impact
Behave ethically and responsibly
Avoid non-compliance related costs
Enhance reputation and brand value
Increase share value
Fulfill stakeholders’ expectations
Attract and retain talent

15. Develop your strategy Gain competitive advantage Reduce cost and risk
Develop legitimacy and reputational capital
Value creation

16. Reduce cost and risk Risk Management Reductions of fines and sanctions
Prevention
Drafting and dissemination of policies and procedures
Code of Ethics, Anti-Bribery Policy, Gifts & Entertainment, Third Party Due diligence
Adequate training and education
Detection
Adequate means to detect wrongdoing
Whistleblower channels
Internal Audit and investigations
Correction
Ensure adequate disciplinary and remedial action
Energy saving and other environmentally sound practices
Community relations management

17. Gain competitive advantage
Setting the company from its competitors
CSR activities as part of the broader business strategy
Fair employment practices and socially responsible brand to recruit and retain talent
Corporate philanthropy initiatives aligned with the company’s core competencies (strategic philanthropy)

18. Develop legitimacy and reputational capital
The activities of the company fit the cultures where it operates
Community relations and relevant Stakeholder Engagement to understand expectations
Disclosure and transparency reporting
Global Reporting Initiative
United Nations Global Compact
Others
Internal and external communication

19. Value creation Reconcile stakeholder demands
Turn social problems (e.g. lack of adequate financial services in communities that do not have it) into an economic opportunity and economic benefit
Mobile financial services
Mobile Health
Mobile Power
Social Entrepreneurship initiatives
Innovation
Focus charitable activities to bring both social and financial return on investment
Seek to positively affect the industry in partnership with suppliers and peers