Certified Compliance Officer - Presentation Slides

Introduction To Compliance
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Introduction To Compliance
The word compliance is derived from the verb 'to comply', which
means, 'to act in accordance with the rules'. In the context of
financial services, it therefore refers to the need for those
organizations that transact regulated activities to abide by the
terms of the Financial Services and Markets Act 2000
(FSMA) and to act in accordance with the rules of the Financial
Services Authority (FSA), the independent supervisory body
established under the FSMA as the sole regulator of the financial
services industry.

The rules cover nearly all sectors within the financial services
industry, including banking, insurance, investment management
and securities, and apply to a vast network of financial
institutions, offering a multitude of financial services and
products, who have to comply with them.
Regulated companies normally have a compliance department,
headed by a Compliance Officer, whose role is to develop policy
and practices that ensure all obligations and regulations are
adhered to, as well as ensuring that no conflicts of interest arise
within the organization. This person is also responsible for
maintaining the company's relationship with the FSA.

Some organizations also have to comply with the rules
of other regulatory bodies. These include bodies that
have had regulatory powers conferred on them by the
FSA, such as the London Stock Exchange, in recognition
of its role as a Recognized Investment Exchange, and
other voluntary associations, for example, the General
Insurance Standards Council, whose members agree to
comply with a self-prescribed code of conduct.

Why Regulate?
The primary reason all industries, from utilities to food and including
financial services, are regulated, is to protect the consumer.
In the financial services industry, regulation aims to address the
potential problem of the knowledge gap between financial experts
who sell products and less informed consumers who buy them. It is
difficult for the average consumer to properly understand the financial
position of those institutions in which they are considering investing,
partly because the market is so complex, and partly because it
requires, time, information, skill and experience to make the best
decisions. Regulation aims to ensure that the advisor helping people
make those decisions is doing so as effectively as possible and in the
best interests of the consumer.

In addition, many financial products are of a long-term nature,
which makes after-sales service an important
consideration. “Conduct of Business” regulation (which covers
the standards that financial advisers must adhere to when
conducting business with their customers), protects customers
by forcing firms to maintain service levels throughout the length
of a contract.
Financial services regulation also seeks to protect the industry
against financial crime, as well as against a systemic failure of the
economy, should one institution fail and cause a contagion
effect, resulting in other failures. This is a concern that is
particularly relevant for banks.

Regulation also works to minimize anti-competitive and
monopolistic behavior, as, without it, the size of some well-
established financial organizations could act as a barrier to
entry for smaller organizations, with larger companies using
economies of scale to stifle competition and restrict choice
for the consumer, leading to high prices.
It should be noted, however, that while regulation is in
place to protect the consumer, firms pass on the costs of
compliance to the consumer in the form of higher prices.

Compliance efforts should support a corporate
culture that promotes prevention, detection, and
resolution of instances of conduct not conforming
with Federal and State Law or ethical and business
practices.
Introduction

This Corporation is committed to promoting strong
business ethics, monitoring compliance with
applicable rules, regulations, and law. Having a
strong compliance program with solid internal
quality control mechanisms assists this Corporation
to maintain its commitment as a firm of integrity
and assists to prevent unethical conduct.

Expectations for Corporate
Compliance
• Continually improving the quality of services and
products provided as well as consistent
environmental structure that encourages
employees to report potential problems
• Having procedures in place for prompt
investigation of areas of concern.

Educational Objectives
of this presentation
• Describe the mission of a Corporate Compliance
Program
• Identify what is the Office of the Inspector
General (OIG) and its focus
• Identify potential areas of vulnerability
• Identify how this Corporation looks to minimize
Corporate Compliance risk

Educational Objectives
of this presentation
• List some of this Corporation’s responsibilities to
its clients
• Identify what the employee should do if they
suspect violation of Federal Law or ethical
business conduct.
• Identify required elements of a compliance
program and its input on personnel.

The OIG has expectations for home health and
hospice agencies as well as third party billerr
The OIG has identified the following seven critical
elements of an effective compliance plan:
1 Written policies and procedures
2. Designation of a Corporate
Compliance Officer
3. Ongoing education and training
4. Effective lines of communication

Expectations continued
5. Enforcement of Standards
6. Auditing and Monitoring
7. Investigation and corrective action

• Providing easy to understand explicit guidelines for
Compliance for all employees to follow
• Ensure that employees understand what is expected
of them in the conduct of their job
Identify the mission of Corporate
Compliance?

• Ensure that objective quality standards
are defined for each department.
• Ensure that those quality standards are
measurable and metrics are routinely
deployed

The mission of the Corporate
Compliance department continued
 Ensure employees are using Compliance Standards in
their daily work activity
 Enhance corporate performance in basic business
relationships
 Ensure the business culture at the Corporation supports
ethical, quality oriented and honorable conduct.
 Develop and maintain trust in the healthcare
community of firms using services and products of this
Corporation.

In healthcare, sometimes there
are gray areas that may need to
be discussed
• Provide a process for decision making when the
business standards DO NOT provide a clear answer
to an issue or dilemma.

How will the Corporate Compliance
Mission be accomplished?

• By providing a written Standard of Conduct for
distribution to all employees upon hiring
• By training on Compliance Standards with Policies
and Procedures to employees of the Corporation.

• By providing ease of access to the
Corporate Compliance Officer
• By providing a hotline to report areas of
potential non-compliance

 By monitoring and enforcement
through the Compliance Officer
and Compliance Committee
 By review and update of the
Corporate Compliance Program
annually and as needed
 By participation of all levels of
management in the Compliance
program

Fostering a Culture of
Accountability
• Most organizations are not held back by a lack of creativity,
innovation or a supply of good ideas. What hamstrings most
businesses is the inability to translate all of those great ideas
— into action — and then into positive results. In my view,
this is a classic case of the "Knowing — Doing" gap. Many
businesses know exactly what they need to do to differentiate
their products/services in the marketplace and capture
competitive advantage — yet most businesses struggle
mightily in creating a culture of accountability and disciplined
execution that can translate those strategies and plans into
deliverable results.

• Which means, if your organization can increase its
ability to execute effectively by fostering a strong
culture of accountability — it could have an
incredibly dramatic positive impact on your success!
• That is why for the last five years I have been
relentlessly focused on understanding what it takes
to create a culture of accountability within an
organization. My research and field projects indicate
there are basically nine key steps to effective
execution, but to me four of them stand out as
absolutely critical.

1. Vision + Values + Strategy. Do you have an extremely
clear and exceedingly well-communicated vision for the
future of your company, underpinned by a set of core
values that dictate how your people will behave along
the way — built on the foundation of a core strategy
that spells out the intended outcomes you want to
achieve? This is so fundamental to effective execution
because it is impossible to hold people accountable to
a direction they don't understand or a strategy they are
not committed to.

2. I hate process. I can't stand Excel spreadsheets. It irks me
every time I have to fill out a report or turn in a form. However, I
absolutely know in my heart of hearts that it is impossible to
produce repeatable success - without processes and procedures.
My advice: create processes only around the MOST important
key drivers of your business's success. To me, that means
identifying and deeply understanding the moments of truth for
your business — those handful of critical customer interactions
that must be delivered flawlessly each and every time in order to
create highly engaged, satisfied and loyal customers — and then
creating the necessary processes, procedures and systems to
allow your employees to consistently exceed your customers
expectations on your unique Moments Of Truth.

3. Two of the most essential elements of a culture of
accountability are measurement and transparency. It is one of
my favorite business axioms of all time. People without access to
information do not have to take accountability for their actions.
In order to be able to hold your people fully accountable for
their performance, it is essential that you create a dashboard of
the MOST important numbers and measures that drive your
business's success — and then make sure that everybody in your
company understands those measures and sees them constantly.
Post them on a giant whiteboard in the lunchroom, send out a
daily or weekly e-mail to recap of the numbers, make it the
screensaver on everybody's computer, talk about it in every
single meeting. Here is the truth: what gets measured, tracked,
over-communicated and rewarded/punished for gets done!

4. Lastly, as I just stated above, reward success lavishly and deal
decisively with mediocrity. When people do a superior job of
holding themselves accountable and delivering on their promises
it is vital that you give them genuine, honest and sincere praise
and reward them for modeling the appropriate behavior. And by
the way, when I say reward them lavishly I don't mean huge
bonuses or giant cash rewards. I am saying be lavish in your
praise and appreciation and then give them something that is
meaningful to them as an individual. It could be money, it might
be a Starbucks gift card, or a better parking spot, or some flex
time, or a weekend pass to Disney World for their family...
anything that will make that particular employee feel truly
appreciated.

• Conversely, failing to deal directly and quickly with poor
performance and lack of accountability sends the message to
the rest of your organization that you were just kidding about
excellence. It tells everyone else that it's absolutely fine to
shirk your responsibilities, turn things in late, do shoddy work,
miss deadlines... and no one is going to hold you accountable
for it. Once you start tolerating mediocrity your organization
becomes a magnet for mediocrity.
• Although there are many other factors involved in building a
high-accountability culture, I believe that if you focus intently
on these four steps it will greatly improve the level of
accountability, results and success in your business.

The Regulatory Environment and the
Role of Regulators

Ingredients
• Laws
• Regulations
• Implementing agencies (ie Customs, Sanitary
Epidemiologic Service)
• Laboratories
• Salt industry representatives
• Politicians and policy makers

LEGISLATION
Mandates iodization Empowers MOH to set
standards
Defines lines of
authority and
investigative powers
Provides for incentives and
punishment for non-compliance
Defines licensing or
registration requirements
Addresses packaging
and labeling
Corrects
unfavorable tax (ie
for iodate)

REGULATIONS
Define implementation
procedures Define standards
Set iodine levels
Specify storage
requirements
Define packaging and
labeling requirements
Require quality
assurance and
record
keeping
Establish import
clearance
procedures

Customs
?
•Are the procedures for checking iodized
salt at the border clear and realistic?
•What sampling methods are defined?
•How are discrepancies between
certificate of conformity and customs
results to be resolved?
•How are rejected shipments managed?

Wholesale and
retail inspection
?
•Are the procedures for checking iodized
salt at wholesale and retail levels clear
and realistic?
•Are resources sufficient to provide
adequate sampling?
•How are discrepancies between
inspection results and stated iodine
content to be resolved?
•Are there procedures defining how
rejected samples are to be managed?

Laboratory Issues
?
•Do the regulations establish standards
laboratories for salt analysis?
•Are there procedures for using an
external standards lab (for either all
analyses or for confirmation)?
•Are sample handling methods well
defined (ie for use as evidence)?
•Are the lines of authority for managing
lab results clear?

Industry perspective
?
•Are importers aware of, and in agreement
with the existing laws and regulations?
•Have importers had difficulty with either
customs or producers regarding conformity?
•Do industry representatives feel inspection
and enforcement procedures are fair and
effective?
•Is industry concerned about regulatory
provisions regarding incentives or dis-
incentives for salt iodization ?

Standards
Codex standards for food grade salt
Packaging standards
•Size
•Material
•Repackaging
Labeling standards
•Contents
•Producer
•Lot number
•Expiration date
•Government logo
Storage requirements
•Conditions
•FIFO
National standards for iodized salt

Other Issues
• Conformity of laws and regulations for iodized
salt, with other food laws
• Synchronization of iodized salt regulations with
regulations for other fortified products
• Agreement on tax issues for products involving a
public health benefit

Legal Obligations And Due
Diligence
The law of obligations is one branch of private law under the civil
law legal system. It is the body of rules that organizes and regulates
the rights and duties arising between individuals. The specific rights
and duties are referred to as obligations, and this area of law deals
with their creation, effects, and extinction. An obligation is a legal
bond (vinculum iuris) by which one or more parties (obligates) are
bound to act or refrain from acting. An obligation thus imposes on
the obligor a duty to perform, and simultaneously creates a
corresponding right to demand performance by the oblige to whom
performance is to be tendered. Obligations may be civil, which are
enforceable by action in a court of law, or natural, which imply moral
duties but are unenforceable unless the obligor consents

Definition
• Justinian first defines an obligation (obligatio) in his Institutions,
Book 3, section 13 as "a legal bond, with which we are bound by
necessity of performing some act according to the laws of our
State." He further separates the law of obligations
into contracts, delicts,quasi-contracts, and quasi-delicts.
• Nowadays, obligation, as applied under civilian law, means a legal
tie (vinculum iuris) by which one or more parties (obligants) are
bound to perform or refrain from performing specified conduct
(prestation). Thus an obligation encompasses both sides of the
equation, both the obligor's duty to render prestation and the
obligee's right to receive prestation. It differs from the common-law
concept of obligation which only encompasses the duty aspect.

• Every obligation has four essential requisites otherwise known
as the elements of obligation. They are:
• the obligor: obligant duty-bound to fulfill the obligation; he
who has a duty.
• the obligee: obligant entitled to demand the fulfillment of the
obligation; he who has a right.
• the subject matter, the prestation: the performance to be
tendered.
• a legal bond, the vinculum juris: the cause that binds or
connects the obligants to the prestation.

Classification
• Source
• Obligations arising out of the will of the parties are called voluntary,
and those imposed by operation of law are called involuntary.
Sometimes these are called conventional and obediential. The events
giving rise to obligations may be further distinguished into specified
categories.
• voluntary:
– unilateral promise (pollicitatio) - undertaking by promisor only to
perform, not requiring the agreement of the beneficiary
– contract
– quasi-contract
• negotiorum gestio - duty to repay someone (gestor) who has
managed the affairs or property of another who was unable
• solution indebiti - undue payment or delivery of a thing to
another, who is then obligated to return the thing

• involuntary:
– delicts and quasi-delicts (equivalent to the common-law tort).
– unjust enrichment (condictio indebiti)
• Contracts
• A contract can be broadly defined as an agreement that is
enforceable at law. Gaius classified contracts into four categories
which are: consensual contracts, verbal contracts, contracts re,
contracts litteris. But this classification cannot cover all the
contracts, such as pacts and innominate contracts.
• Quasi-contracts
• Quasi-contract is one of the four categories of obligation in
Justinian's classification. The main cases are negotiorum gestio
(conducting of another person's affairs without their
authorisation), condictio indebiti (unjust enrichment) and common
ownership.

Financial Crimes
Financial crimes are crimes against property, involving the
unlawful conversion of the ownership of property
(belonging to one person) to one's own personal use and
benefit. Financial crimes may involve fraud (cheque fraud,
credit card fraud, mortgage fraud, medical fraud, corporate
fraud, securities fraud (including insider trading), bank
fraud, payment (point of sale) fraud, health care fraud);
theft; scams or confidence tricks; tax evasion; bribery;
embezzlement; identity theft; money laundering; and
forgery and counterfeiting, including the production of
Counterfeit money and consumer goods.

Financial crimes may involve additional criminal
acts, such as computer crime, elder abuse, burglary,
armed robbery, and even violent crime such as
robbery or murder. Financial crimes may be carried
out by individuals, corporations, or by organized
crime groups. Victims may include individuals,
corporations, governments, and entire economies.

Money Laundering
For most countries, money laundering and terrorist
financing raise significant issues with regard to prevention,
detection and prosecution. Sophisticated techniques used to
launder money and finance terrorism add to the complexity of
these issues. Such sophisticated techniques may involve different
types of financial institutions; multiple financial transactions; the
use of intermediaries, such as financial advisers, accountants,
shell corporations and other service providers; transfers to,
through, and from different countries; and the use of different
financial instruments and other kinds of value-storing assets.
Money laundering is, however, a fundamentally simple concept.
It is the process by which proceeds from a criminal activity are
disguised to conceal their true origin.

• Basically, money laundering involves the proceeds of
criminally derived property rather than the property itself.
Money laundering can be defined in a number of ways, most
countries subscribe to the definition adopted by the United
Nations Convention Against Illicit Traffic in Narcotic Drugs and
Psychotropic Substances (1988) (Vienna Convention) and the
United Nations Convention Against Transnational Organized
Crime (2000) (Palermo Convention):
• i. The conversion or transfer of property, knowing that such
property is derived from any (drug trafficking) offense or
offenses or from an act of participation in such offense or
offenses, for the purpose of concealing or disguising the illicit
origin of the property or of assisting any person who is
involved in the commission of such an offense or offenses to
evade the legal consequences of his actions;

ii. The concealment or disguise of the true nature, source,
location, disposition, movement, rights with respect to, or
ownership of property, knowing that such property is derived
from an offense or offenses or from an act of participation in
such an offense or offenses, and;
• iii. The acquisition, possession or use of property, knowing at
the time of receipt that such property was derived from an
offense or offenses or from an act of Participation in such
offense or offenses.

The Financial Action Task Force on Money
Laundering (FATF), which is recognized as the
international standard setter for Anti-money
Laundering (AML) efforts, defines the term
“money laundering” briefly as “the processing of
criminal proceeds to disguise their illegal origin”
in order to “legitimize” the ill-gotten gains of
crime.

What is Corporate Governance?

Corporate Governance
• Contemporary corporate governance started in 1992
with the Cadbury report in the UK
• Cadbury was the result of several high profile
company collapses
• is concerned primarily with protecting weak and
widely dispersed shareholders against self-interested
Directors and managers

Corporate Governance Parties
• Shareholders – those that own the company
• Directors – Guardians of the Company’s assets for
the Shareholders
• Managers who use the Company’s assets

• Primarily concerned with public listed companies i.e.
those listed on a Stock Exchange
• Focused on preventing corporate collapses such as
Enron, Polly Peck and the Maxwell companies

• What relevance does it have to Africa where there
are few public listed companies
• Most companies are non-listed, private family owned
businesses where the shareholders and the
managers are often the same people

Four Pillars
of Corporate Governance
• Accountability
• Fairness
• Transparency
• Independence

Accountability
• Ensure that management is accountable to the
Board
• Ensure that the Board is accountable to
shareholders

Fairness
• Protect Shareholders rights
• Treat all shareholders including minorities, equitably
• Provide effective redress for violations

Transparency
Ensure timely, accurate disclosure on all
material matters, including the financial
situation, performance, ownership and
corporate governance

Independence
• Procedures and structures are in place so as to
minimize, or avoid completely conflicts of interest
• Independent Directors and Advisers i.e. free from the
influence of others

Corporate Governance in Africa
• In 1994, The King Report in South Africa also
included within its Code of Corporate Governance
requirements on sustainability and ethical standards
• This was due to the context of a developing country
and business ethics in Africa

Sustainability
• No generally accepted definition
• Most commonly used is from the Brundtland Report
for the World Commission on Environment and
Development 1987 which defines it as:

Sustainability
‘development that meets the needs
of the present without compromising
the ability of future generations
to meet their own needs’

Stakeholders
• Sustainability recognizes stakeholder rights i.e. the
rights of interested parties e.g. employees, the
community, suppliers, customers etc.
• Encourage co-operation between the company and
its stakeholders in creating wealth, jobs and
economic stability

Business Ethics
• Established values and principles a company uses to
inform and conduct its activities
• Should permeate a company’s culture and drive its
strategy, business goals, policies and activities
• Usually found in a code of ethics

Elements of Corporate Governance
• Good Board practices
• Control Environment
• Transparent disclosure
• Well-defined shareholder rights
• Board commitment

Good Board Practices
• Clearly defined roles and authorities
• Duties and responsibilities of Directors understood
• Board is well structured
• Appropriate composition and mix of skills

Good Board procedures
• Appropriate Board procedures
• Director Remuneration in line with best practice
• Board self-evaluation and training conducted

Control Environment
• Internal control procedures
• Risk management framework present
• Disaster recovery systems in place
• Media management techniques in use

Control Environment
• Business continuity procedures in place
• Independent external auditor conducts audits
• Independent audit committee established

Control Environment
• Internal Audit Function
• Management Information systems established
• Compliance Function established

Transparent Disclosure
• Financial Information disclosed
• Non-Financial Information disclosed
• Financials prepared according to International
Financial Reporting Standards (IFRS)

Transparent Disclosure
• Companies Registry filings up to date
• High-Quality annual report published
• Web-based disclosure

Well-Defined Shareholder Rights
• Minority shareholder rights formalised
• Well-organised shareholder meetings conducted
• Policy on related party transactions

Well-Defined Shareholder Rights
• Policy on extraordinary transactions
• Clearly defined and explicit dividend policy

Board Commitment
• The Board discusses corporate governance issues
and has created a corporate governance committee
• The company has a corporate governance champion
• A corporate governance improvement plan has been
created
• Appropriate resources are committed to corporate
governance initiatives

Board Commitment
• Policies and procedures have been formalized and
distributed to relevant staff
• A corporate governance code has been developed
• A code of ethics has been developed
• The company is recognized as a corporate
governance leader

Other Entities
• Corporate Governance applies to all types of
organisations not just companies in the private
sector but also in the not for profit and public sectors
• Examples are NGOs, schools, hospitals, pension
funds, state-owned enterprises

Country Perspective
• Corporate Governance is by way of legislation or best
practice Code
• US adopted legislation in 2002 - Sarbanes Oxley Act
• Most other developed and emerging market
countries have adopted best practice Codes e.g.
Combined Code in the UK, Cromme Code in Germany
and the King II Code in South Africa

Country perspective - Codes
• These Codes are voluntary and are enforced by
shareholders
• Most of them operate on a ‘comply or explain’
approach
• The Media also play a part in highlighting good or
bad practices

Country Perspective
• Countries in Africa have tended to adopt a hybrid
approach whereby they have followed the ‘comply
and explain’ approach but have enshrined some of
the principles in law to assist in enforceability
• The reason is the weakness of the shareholder base
and of the media

Why Corporate Governance?
• Better access to external finance
• Lower costs of capital – interest rates on loans
• Improved company performance – sustainability
• Higher firm valuation and share performance
• Reduced risk of corporate crisis and scandals

Why Corporate Governance?
In 2002, L Klapper and I Love from the World Bank found
evidence that improving a company’s corporate governance
has proportionately greater impact in countries with weak
legal environments.
They have suggested that companies can partially
compensate for ineffective laws and enforcement by
establishing good corporate governance at the company level
and providing credible investor protection

Overview, Guidelines for
Compliance Programs

WHY HAVE A COMPLIANCE PROGRAM?
• Risk Minimization
• Financial Risks & Operational Risks
• Health & Safety Risks
• Reputational Risks
• Better Image, Improved Relationships, Greater Trust
• Community
• Sponsors and Regulators
• External Pressures
• Post-Enron Corporate Accountability Expectations
• Sarbanes – Oxley
• Interested Board Members
• Governmental Expectations (e.g. DHHS OIG)
• (Possibly) Reduced Fines and Penalties
• Greater Efficiency and Improved Outcomes
• Better trained workforce, better morale
• Elimination of uncertainty and confusion about roles and responsibilities
• Better quality research, operations
• Identifying and addressing problems early
• Reducing likelihood of government audits & investigations

WHY HAVE A COMPLIANCE PROGRAM?
• From Steve Jung, Stanford’s Director of Internal Audit and Institutional
Compliance (as reported in IIGR guide, referenced below)
Consequences of Noncompliance
• Fines, penalties, and legal fees
• Media coverage and blemished reputation
• Imposed compliance “settlements”
• More regulatory and audit agency scrutiny
• Management time and effort required to perform damage control
• Management turnover
• Lower faculty and staff morale
• Increased bureaucracy and lower efficiency
• Lingering effects ……….
• Guilt by association: when one of us is tarred, we all wear the feathers

Example: COMPLIANCE AT HARVARD
• De-centralized Organizational Structure
• Central Structure
• Harvard Corporation / Overseers
• President, Provost
• VP and General Counsel (OGC)
• VP for Finance (Controller, OSP, RMAS)
• VP for Administration (EH &S Facilities)
• Ombuds Office
• Schools/ Tubs (HMS, FAS, HSPH, etc)
• HMS
• SPA (Pre-award), ORSP ( IRB, IACUC), IBC/COMS, FOA
• Office of Research Compliance (ORC)
• HMS RCO Reports to
• Dean of HMS through Dean for Faculty and Research
Integrity
• HU AVP for Research Administration

Example: COMPLIANCE AT HARVARD
• HMS RCO works closely with
• OSP/SPA Directors/Staff
• RMAS & HU Senior Compliance Officer
• Numerous Departments & Offices including ORSP,
IBC,FOA, Academic Departments, BSAG, FIG
• HMS Compliance Committees
• Research Compliance Advisory Committee (Senior
HU/HMS Leaders, AVP’s, Associate Deans)
• Research Compliance Leadership Group (HMS
Directors – Research Administrative, Finance, and
Research Safety and Ethics)

A WORD ABOUT “COMPETING
ORGANIZATIONAL MODELS” FOR UNIVERSITY
COMPLIANCE PROGRAMS
• CENTRALIZED CORDINATION/ DISTRIBUTED EXECUTION MODEL (e.g. U. Minn.)
• Single University-Wide Compliance Officer
• Partner with leaders and Compliance/Administrative Personnel in units
and Colleges
• HYBRID/DECENTRALIZED MODEL (e.g. Harvard)
• Compliance Officers at School Level (Research)
• HU-Wide Senior Compliance Officer in RMAS
• Horizontal Relationship of School RCO’s with Central Audit/Compliance
Personnel
• Compliance Functions/Roles Sometimes Filled by Administrators w/ other
duties and w/out “Compliance” in their titles
• “Stealth” Model (e.g. Baylor)
• Decentralized, without designated COs
• Compliance Responsibilities assigned to various Deans, Directors , etc.
• Stronger oversight role in OGC, Audit, etc.

Overview Issue: WHERE SHOULD THE “COMPLIANCE
FUNCTION” BE LOCATED?
• VP for Audit and Compliance?
– How are the roles different ?
• General Counsel?
– If not, what is the role of counsel?
• Risk Management?
– Isn’t this more than insurance and
traditional risk management?
• Stand Alone?
– How does this function interact with
above offices?

Overview: WHAT ARE THE PURPOSES OF A
COMPREHENSIVE UNIVERSITY COMPLIANCE
PROGRAM?
Example: UMN/OIC’s Mission Statement:
To serve, safeguard, and promote ethical practices at the
University of Minnesota by:
• Identifying compliance risks and effective methods to mitigate those
risks;
• Improving delivery of compliance resources;
• Educating and promoting awareness of ethical and legal standards of
conduct through effective programs; and
• Partnering with responsible University representatives to monitor
compliance and to ensure that appropriate and effective corrective
actions are taken where non-compliance is detected

WHAT ARE THE PURPOSES OF A MEDICAL
SCHOOL RESEARCH COMPLIANCE PROGRAM?
Example: HMS/ORC’s Mission Statement:
To contribute to the advancement of research excellence at HMS by
undertaking activities aimed at:
• Ensuring full compliance with all applicable governmental and
institutional requirements, and the implementation of appropriate
best practices, related to the conduct, administration, and reporting
of research; and
• Fostering a culture of responsibility and stewardship that assures
the proper use of sponsors’ grant funds; and
• Protecting the institution, its faculty, staff, and students, as well as
our research partners and collaborators, the human and animal
subjects of our research, and the members of our local and global
communities who benefit from and are affected by our research
activities.

Implementing Ethics in the
Workplace

The Seven Sentencing Guidelines
1. Having Standards
2. Assigned Responsibility - Adequate Resources
3. Due diligence in Hiring
4. Communications and Training
5. Monitoring, Auditing, Reporting
6. Promotion and Enforcement of Ethical Conduct
7. Reasonable Steps to Prevent Misconduct

The Challenge is Doing More with Less
1. Have a Plan - preferably a long range plan
2. Have support at the Top and an “Ethics Team”
3. Get an Ethics/Compliance Committee Chartered
4. Put in place a “Code of Conduct”
5. Get a Helpline Set Up
6. Communicate to Managers/Employees
7. Do Some Training - E-Mail,Web,Video,
8. Attend Other Meetings or Training Sessions
9. Give Leaders Ethics Messages to Send Out
10. Use the Company Website Extensively
11. Follow in the Wake of Critical Events
12. Regularly Report on Numbers, Issues to Mgt.

Every Company is Unique
Leadership
History
Culture
Policies
Practices
People
Regulatory Environment

Gallup Organization Findings
Tone at the Top
VALUES
One of the
Seven Demands of Leadership

Gallup Research Based Findings
During nearly forty years of research and tens of
thousands of interviews, Gallup has determined
the
Seven Demands of Leadership.
These are behaviors of individuals who are
perceived as leaders within their
organizations, communities and nations.

WHAT GREAT LEADERS DO MOST
- the most commonly expressed demands
VISIONING
MENTORING
CHALLENGING EXPERIENCES
KNOWING SELF
MAKING SENSE OF EXPERIENCES
STABILIZING VALUES
BUILD A CONSTITUENCY
7
D
E
M
A
N
D
S

Allocation of Time
For Creating Alignment
Typical
Drafting & Redrafting
Statements
Identifying
Core Values
Creating
Alignment
Desired
Identifying
Core Values
Creating
Alignment
Drafting &
Redrafting
Statements
0-5% 90-100% 0-5%
0-5%10-20% 80-90%

Organization and Personnel

How to Manage
Organizational Ethics?
1. Create a formal program w/resources
2. Put someone in charge of it
• General Counsel
• HR director
• Internal auditor

Report to…
• CEO
• Board of Directors
• Committee of the Board of Directors
• Senior Executive

Support for Managing
Organizational Ethics Programs

Compliance and Ethics Program
Compliance
with Laws
Ethical
Behavior
SWEET
SPOT

BCBSNE Compliance Organization
Board of Directors
Audit & Compliance Committee
Corporate Compliance Officer (VP Level)
Compliance Department (with dedicated Staff)
Compliance Cross Functional Team Members

Responsibilities
1. Provide Guidance and Answer Questions
 Create and Assist in Creating Policy & Procedure
 Develop and Deliver Training
 Foster Awareness & Encourage Ethical Behaviors
2. Respond to Auditors and Regulators
3. Respond to Complaints (Receive/Investigate/Document/Resolve)
4. Liaison with the Board of Directors
 Listen
 Report
5. Keep Current on and Facilitate Compliance with Laws and Regulations

Communication & Training
Getting the right message out

What is communicated?
Ethics Materials: Mission
Values
Code of conduct/ethics
Policies
Decision methods
Your culture
Ethics program: Who is the Ethics Officer? How to
make contact?
Senior Management
Commitment to Ethics:
Why organizational ethics matters?

Methods of Communication
Evaluate current ethics communication lines
– Formal and informal
– downward, upward, and two way
Clear, consistent, credible messages across
communication lines

The End

Certified Compliance Officer - Presentation Slides

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