Lecutres on Ethics: Herb

Is there a difference between ethics and compliance?

• Compliance built off ethics rules and following the rules 

• Ethics about values doing the right thing integrity driven by the culture you are in  

Give me some examples about compliance and ethics herb used

• Police officer a great example of compliance 

• Speed limit ethics like people should do the right thing  

• Both a little of compliance and ethics 

What are the halmarks of an effective compliance program?

• Commitment from sr mgmt 

• Co culture of ethics and compliance 

• Code conduct policy and procedure 

• Risk assessment  

• Oversight auto and resources 

• Incentives and disciplinary measures 

• Third party due diligence and payments 

• Confidential reporting and internal investigation  

• Continuous improvements from lessons learned  

What is the hallmark of an effective compliance program that Herb pointed out the most?

Co culture of ethics and compliance 

What are some code of conduct examples or rather nonexamples herb mentioned?

• GM: 

  • Faulty ignition switch car would move when parked = crim class 

  • Team of lawyers that are on liability  

  • Compliance on figuring out what's wrong and engineering trying to fix it  

  • But GM just was prioritizing litigation and secrecy over fixing the prob 

• Wells Fargo: 

  • Great code of conduct as well  

  • Found hard metric to meet to open up accounts to 8  

  • Senate hearing w/Wells 

    • If compliance officer and CEO is testifying in front of Congress = bad job  

  • Early warning signal was ethics hotline the employs were reporting and then retaliating against them  

  • But it's also about the tone at the top  

  • Wells didn't learn from this they have had more programs for this  

  • Person who came up w/cross selling crim prosecuted  

  • Not a lot of accountability for CEOs in the enforcement landscape it comes from the fin mkts = performance like Boeing  

What are organizational stressors

• Bad Econ 

• Scorecards 

• Incentive comp 

• Timing = rhythm of biz —Q4 is a big deal = profit and loss statement of the yr  

• Billable hrs 

• Speed  

• Team dynamics  

• Communication  

• Tented projects: Highly secreted projects = virtual and physical  

• Do as I say not as I do  

Why did herb think people do what they do

conformity

Tell me about the asch experiment

• Everyone in room in experiment except this guy they are going to show info that is wrong and pretend that it's not wrong and will see his reaction  

• Actors told to match the wrong line and volunteer will see if gives the right answer  

• We will begin to conform to the group we don't want to be seen as rocking the boat  

• Leave a job if conformity that is not fitting with good ethics  

Tell me about a microsoft example that shows conformity versus integrity

employ mnging vendor at microsoft they became friends warning bell in his head about the vendor's request and microsoft called SEC, SEC had already had a wire = listening device on the guy  

What were reactions to the Brian Jorgenson vid at microsoft

• Thanks for vid didn't know this was against the law  

• He is bum he is manipulative doing this to get sentencing credit  

• Don't feel sorry for him feel sorry for fam that are the real victims  

• Compliance is being manipulative of this person  

what are the three things the new ceo came up with to help leaders

• Create clarity  

• Deliver energy 

• Success  

How do they do the new three things at microsoft?

• Pause  

• Think  

• Ask  

What is a personal story that herb shared about exercising ethics?

• Make the code of conduct training an event  

• Purchasing author $250K herb had at the time course cost $500k  

  • The person in charge is like yo everything is here $500K needed approval from herbs boss  

  • Herb is like we got to shut it down before we have to pay  

  • Employ was like just split it into two days but at microsoft this is a prob 

    • Herb stopped paused and thought  

    • Got permission from bosses boss  

 

What are some takeaways from herb?

can make a biz case for compliance. compliance combos a whole bunch of things.