Measuring Program Effectiveness: What Works and What Doesn’t

Urton Anderson – The University of Texas at AustinLarry Parsons - Freescale Semiconductor, Inc.

Ed Petry - Ethical Leadership Group

McCombs School of Business

� Urton Anderson, Ph.D., CCEP

� Chair – Department of Accounting and Clark W. Thompson Professor in Accounting Education, The University of Texas at Austin

Freescale Semiconductor

� Larry Parsons, J.D., CCEP

� Vice President and Chief Ethics and Compliance Officer, Freescale Semiconductor, 2004-Present

� Senior Director, Labor and Employment Law, Motorola, Inc., 1995-2004

� Participating Associate, Labor and Employment Law, Fulbright & Jaworski, LLP, 1992-95

� Associate, Labor and Employment Law, Jones, Day, 1991-92

� Judicial Clerk, Jerre Williams, Circuit Judge, United States Court of Appeals for the Fifth Circuit, 1990-91

Ethical Leadership GroupEthical Leadership Group

� Ed Petry, Ph.D.

� Vice President, Ethical Leadership Group

� Program Director, Conference Board

� Executive Director of ECOA, 1995-2004

� Member, Advisory Panel, US Sentencing Commission, 2001-2003

� Member, Ethics Oversight Committee, US Olympics, 1999-2002

Agenda

� Why conduct assessment

� Conducting the assessment

� Audit as assessment

� Assessment in practice – Freescale’s program

� Issues – what works and what doesn’t

Reasons for conducting assessmentsReasons for conducting assessments

� Improve the program

� Ensure compliance with policies and

law

� Determine and document resource

needs

� Demonstrate progress

� Identify training needs

� Provide feedback

� Set priorities

US Sentencing GuidelinesUS Sentencing Guidelines(5) The organization shall take reasonable steps—(B) to evaluate periodically the effectiveness of the

organization’s compliance and ethics program

(2) (A) The organization’s governing authority shall be knowledgeable about the content and operation of the compliance and ethics program and shall exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.

(B) High-level personnel of the organization shall ensure that the organization has an effective compliance and ethics program, as described in this guideline.

US Sentencing GuidelinesUS Sentencing Guidelines

2. Factors to Consider in Meeting Requirements of

this Guideline.—

(A) In General.—Each of the requirements set forth in this guideline shall be met by an organization; however, in determining what specific actions are necessary to meet those requirements, factors that shall be considered include: (i) applicable industry practice or the standards called for by any applicable governmental regulation; (ii) the size of the organization; and (iii) similar misconduct.

Some assessment techniques used: Some assessment techniques used:

� Employee surveys

� Employee focus groups

� Internal audits

� Third party evaluations

� Third party audits

� Helpline call tracking

When assessing, donWhen assessing, don’’t neglectt neglect……

� Intuition and gut reaction

� “Flavor” of the calls

� Management response to issues raised or audit findings

� Off-hand remarks

� Management willingness to allow the Ethics Office to present at department meetings

� Trends of advice questions and investigation results

Hurdles to getting started Hurdles to getting started

� Lack of time or resources

� Program is too new (“not yet”)

� Program is established, integrated (“no need”)

� Uncertainty about what the standards are (what is

“effective”?)

� Normal silos and turf battles

� Uncertainty about how best to conduct the assessment

� Concern that data would be used adversely in litigation

� Concern about negative results (reflecting on you, others)

� Lack of commitment from the organization to respond to

results

� Skepticism about ability to “measure ethics”

Clearing the hurdlesClearing the hurdles� Make the business case

� Refer to industry best practices (and “common” practice)

� Refer to help in mitigation, charging decisions

� Get support from other ethics officers

� Commit to involve others in the development of the

assessment

� Ensure leadership and management attention in setting

the right tone

� Prioritize assessments and goals (risk assessment first?)

� React “well” to problems found

� Solicit and provide feedback throughout the process

Steps for effective assessmentsSteps for effective assessmentsDetermine what needs to be measured

Use results from your risk assessments

Examine available tools and data already available to you

Gather objective, measurable findings andsubjective opinions

Interviews; focus groups; surveys; document reviews; direct observation

Make practical, prioritized recommendations

What is What is ““effective? effective? ””Different perspectives:Different perspectives:

� Ethics officer

� Employees

� Senior management

� Board of Directors

� Customers/suppliers

� Shareholders

� US Attorneys

� Federal Sentencing Guidelines

15

Assess the following elementsAssess the following elements

1. Risk assessment (USSG # “8”)

2. Structure and leadership (#2)

3. Communications and training (#1,4)

4. Reporting and response (#5,6,7)

5. Integration into HR practices (#3,6)

6. Monitoring and assessment (#6)

…and culture

Assessments step by step

� Sample objectives for each step

� Sample requirements to assess

What worksWhat works

1. Risk assessment 1. Risk assessment

� ObjectiveDesign and implement the ethics and compliance program so

that it appropriately addresses legal and reputational risks

faced by the company

� Requires� Periodic assessment of legal and reputational risks by

informed personnel

� Remediation plan based on risk assessment

2. Structure and leadership 2. Structure and leadership

� ObjectiveTo ensure that efforts toward achieving the ethics and compliance goal are managed effectively and efficiently throughout the company.

� Requires� Board oversight and engagement

� Senior management and line leadership

� In individual roles and often as a leadership committee

� Designated E&C officer(s) with adequate resources and appropriate reporting relationships

� Resources include time, and appropriate people support

� Business units and corporate

� Coordination of “ethics” issues with “compliance”

� Appropriate documentation

3. Communications and training3. Communications and training

� ObjectiveTo clearly communicate the standards necessary for employees to do their jobs the right way

� Requires� Communications and training based in Company business and

values� Clear, understandable Code of Conduct, Policies and Procedures� Distribution that reaches employees as appropriate� Creative, periodic delivery of E&C messages (articles, posters,

etc.)� Engaging training on issues relevant to employee roles and

responsibilities� All levels, including Board

4. Reporting and response 4. Reporting and response

� ObjectiveProvide multiple, trusted means for employees to ask questions and report concerns of misconduct, and respond appropriately to those questions and reports

� Requires� Ability to contact credible resource anonymously via phone

email/internet

� Managers who understand and perform role as resource

� Ironclad processes for reporting accounting matters and major issues to Board

� Prompt, discreet, professional investigations of allegations

� Use of reports to identify trends, issues, remediation needs

� Mechanism for ensuring relative consistency of discipline (see #5)

5. Integration into HR practices5. Integration into HR practices

� ObjectiveTo continuously align human resources policies and Hr/management practices with ethics and compliance

� Requires� Incorporating ethics/compliance/integrity in the hiring process� Including ethics/compliance/integrity as key components of

the performance appraisal and promotions processes� Asking for knowledge of incidents of wrong doing in the exit

interview process� Disciplining individuals appropriately for conduct inconsistent

with the Code of Conduct

6. Monitoring and assessment6. Monitoring and assessment

� ObjectivesTo effectively audit and monitor for indications of conduct inconsistent with the Company’s standards, and to periodically assess the effectiveness of the Company’s ethics and compliance efforts.

� Requires� Auditing/monitoring in key risk areas� Periodic auditing of compliance program processes� Monitoring affiliates, agents and acquisition candidates for

appropriate behavior � Periodically assessing for program effectiveness

Optional: deep divesOptional: deep dives

� Based on your risk assessment, which of these areas is most important to “test”?

1. Anti-corruption/FCPA

2. Antitrust

3. Privacy

4. Export controls

5. Conflicts of interest

6. Other?

Audit Approach

� Internal Audit

� External Provider

� Peer Evaluation

Internal Audit

2110.A1 – The internal audit activity must evaluate the design, implementation, and effectiveness of the organization’s ethics-related objectives, programs, and activities.

IIA Standards

Auditing Compliance System Effectiveness

Part 1 - The assessment of the entity level controls over the complianceprogram which at a minimum would include evaluating the organization’s process for assessing risk of noncompliance and ethical misconduct and the design and implementation of seven elements of the Guidelines.

Part 2 – Evaluating the effectiveness of controls specifically designed to reduce the risk of noncompliance in the high risk areas identified by the organization’s risk assessment process.

Level of Organizational Control

Example of Entity-level Control Framework

� Objectives:� To establish and promote a culture of integrity, compliance, competence and

accountability; doing the right thing.

� Risks:� Failure to define and articulate management’s expectations, including risk appetite.� Lack of effective “tone at the top” (i.e., walking the talk).� Inability to monitor performance.� Failure to enforce policies and have consistent consequences for lack of compliance.

� Controls:� Well-defined and articulated code of ethics.� Whistleblower and compliance reporting process.� Protocol for policies that establishes employee responsibilities and accountabilities.� High level person assigned responsibility for compliance and ethics

Audit and Monitoring Plan – Part 2 High Risk

Control and Monitoring Activities

TimelinessInternal Audit – level 4

Oversight – level 3

Supervisory– level 2

Execution – level 1

Freescale – Company Overview

� Semiconductor design and manufacturing company established in 1953

� Focused on the networking, automotive, wireless communications, industrial control and consumer electronics markets

� Engaged with 10,000+ customers globally; over 100 of the top electronic manufacturers

� $5.7 billion in revenue in 2007� Headquartered in Austin, Texas� 24,000+ employees in over 30 countries� Separated from Motorola in 2004 (IPO/Spin)� No. 368 on Fortune 500 list in 2006� Leveraged buyout by consortium of private

equity funds completed December 1, 2006� Listing on NYSE ceased on December 1, 2006

Freescale – Ethics Communications Plan

� Planning – Develop communications plan at beginning of year.

� Elements

� Summit (Freescale Employee Intranet Portal) Articles

� Ethics in Action

� Ethics IQ

� Recurring specific subjects (Insider Trading, Confidential Information, Export Compliance)

� CEO Messages

� External Communications

� Town Hall Materials for Management

� Newest Element: Ethics Blog

Freescale Sample – Summit (Intranet) Article

� It’s not easy being green:An emphasis on the environment8 February 2008

� Kermit the Frog says, “It’s not easy being green.” I doubt that the Muppet was talking about the semiconductor industry, but I believe his statement fits. The world grows more conscious about the environmental impact of hazardous materials and energy consumption. Companies are modifying their products, processes and packaging – making their products better for the environment and more attractive to customers.

� Environmental efforts feed our bottom line

� Freescale’s Environmentally Preferred Products (EPP) program spent years implementing low lead (Pb) content chip packages without mercury, cadmium, hexavalent chromium, or two brominated compounds – PBB and PBDE. We also implemented programs with our suppliers to ensure they minimized these hazardous substances.

� The EPP team certifies that each new product and component is free from 39 Freescale banned substance groups. We also certify that our products meet today’s regulatory and customer requirements for hazardous substance content.

Freescale Sample – Ethics in Action

� Freescale's Impeccable Ethics in action:

� Corporate credit cards are only to be used to pay approved company expenses 18 April 2008

� Maintaining our commitment to Freescale’s Impeccable Ethics fundamental requires constant diligence in our daily job responsibilities. Periodically, we publish a summary of a recentmatter handled by Freescale’s Office of Business Conduct and Ethics (OBCE), including the outcome and how the situation should have been handled consistent with our Code of Business Conduct and Ethics (the Code) and commitment to a culture of impeccable ethics.

� Obviously, discussing any issue handled by the OBCE has an educational and awareness benefit that must be balanced against issues of privacy and confidentiality. As such, all identifying information (such as names and places) has been removed from this summary. If you are familiar with the situations described in this article, we ask that you not disclose the names of the individuals involved or any other details.

� Read on for this month's Impeccable Ethics in action article.

Freescale Sample – Test Your Ethics IQ

� Test your ethics IQ:What would you do? 22 February 2008

� We all face ethical choices each day as we carry out our responsibilities for Freescale. Test your ethics IQ by reading the scenarios below and selecting the best course of action. Do your responses support Freescale’s commitment to Impeccable Ethics?

Freescale Sample – Test Your Ethics IQ

Scenario one: � A good friend of yours is employed by a Freescale

customer. He recently sent you an e-mail that his employer received from a Freescale competitor that contained test specifications for a product being developed by the competitor. The test specifications provide some technical information that would be useful to your department’s development of a similar product line for Freescale.

� What should you do with the e-mail?� Thank your friend for the information and send

copies of the e-mail to all of the managers and engineers working on the similar Freescale product line.

� Consult with your manager before distributing the e-mail information.

Freescale - Internal Program Communications 2008

1Q2008

2Q2008

3Q2008

4Q2008

Jan -- iCAP and Records Management policies and processes, Emails: SLT, employeesFeb 8 – Summit Article – It’s Not Easy Being GreenFeb 22 – Test Your Ethics IQ – Protect Your Ethics IQ

Mar 23 – Freescale Remains Committed to Impeccable Ethics; Summit Feature, Parsons to all employees,

Apr 18 –Misuse of Corporate Credit Cards – Corporate Credit Cards are to be used only for

Company Approved Expenses; Summit Feature, Ethics in Action, all employees: Jun 22 – Protecting Confidential Information, Summit Feature, Test Your Ethics IQ, all employees

Jul 20 – Personal Relationships, Summit Feature, Test Your Ethics IQ, all employees:Sep 21 – They Used Freescale Assets for Personal Benefit – misuse of company assets; Summit Feature, Ethics in Action, all employeesSep 27 – 2007 American Business Ethics Award; Summit Feature; All Employees

Oct. 1 – Summit Feature – Insider Trading Policy ReminderOct 19 – Gifts and Entertainment, Summit Feature, Test Your Ethics IQ, all employeesDec 8 –Guidelines for Holiday Gift Giving and Receiving; Parsons Email to all employees

Freescale – Training Plan

� Planning – Rolling three year plan for training

� Courses (Risk Assessment)

� Audiences

� Timing

� Year to year modification

� Coordination with other functions

� Human Resources – Training function (to mesh with other training initiatives

� Communications

Measurement of training programs

1. Content and objectives

2. Courses and target audiences

3. Total attendance

4. Percentage of target audience who attended

5. Format (e.g., live, computer-based)

6. Names and credentials of trainers

7. Materials provided to attendees

8. Analysis of ETHICSline contact post-training (number and type)

Freescale Ethics and Compliance Training - 2008

Feb – Completion of online Code course by approximately 900 employees previously exempted because of attendance at instructor-led ethics course

Apr - Two courses, FCPA and Antitrust, approximately 1500 employees in each course, Communications, Sales, Strategy, Procurement, Finance

1Q2008

2Q2008

3Q2008

4Q2008

Jun – Two courses, Whistleblowing and Conflicts of Interest, approximately 2000 employees in each course, Executives and Managers

Nov – two courses, Ethical Principles and Practical Ethics, approximately 1000 employees, Managers and Individual Contributors, Malaysia

Oct – E-compliance & Careful Communications, approximately 11,000 employees, Executives, Managers and Individual Contributors

Jan - Completion of iCAP/Records Management online course regarding new policies, 17,000 employees with emailJan - Board of Directors Education Session

May - Board enrolled in online Code course

Freescale: Audit and Legal Committee Charter

� Business Conduct, Ethics and Compliance

� 16. The Committee will review the Company’s business conduct and compliance policies and programs. In connection with such review, the Committee will:� Receive periodic reports from the ethics and compliance officer

regarding ethics and compliance.

� Periodically meet separately with the ethics and compliance officer without other senior management present.

� Obtain reports from management, the Company’s internal audit director and the independent auditor that the Company and its subsidiary/foreign affiliated entities are in conformity with applicable legal requirements and the Company’s Code of Business Conduct.

� Advise the Board with respect to the Company’s policies and procedures regarding compliance with applicable laws and regulations and with the Company’s Code of Business Conduct.

Business Conduct & Ethics Organization

Larry Parsons

Vice President , Business Conduct

and Ethics

Code of Business Conduct and Ethics

Human Resources Compliance Issues

Regulatory Compliance and Governmental Affairs

Compliance Special Projects

InvestigationsEthics and Compliance

Training

• Records Management

• Data Privacy

• Corporate Social Responsibility

• Supplier Certifications

• Code of Business Conduct and Ethics

• ETHICSline

• BCE Committees

• EEO

• Immigration

• OFCCP

• Regulatory Compliance

• Trade Compliance

• Government Relations

• EPP Function

• EHS Audit

• FCC/CE

• Risk Assessment

The Eight Elements of an Effective Ethics and Compliance Program

Management Support

& Resources

Clear Written

Standards & Controls

Effective Training & Communication

Consistent Monitoring, Evaluation & Reporting

Response & ContinuousImprovement

Periodic Risk

AssessmentDue Care in

Delegating Authority

Consistent

Enforcement

• VP, Ethics & Compliance

• Resources

• Freescale Business Conduct & Ethics Leadership Team (“FBCELT”)

• FSL Code of Business Conduct & Ethics

• Ethics & Compliance policies

• Initial & Ongoing

• All Employee Training

• Senior Leadership

• Board

• FSL ETHICSline

• FBCELT

• Audit & Legal Committee

•SOX Disclosure Committee

• FSL Fundamental –Impeccable Ethics

• Performance Mgt. & incentives aligned

• Disciplinary Actions

• Track record of integrity prior to delegation

• Screening of new hires

• Business Integrity Questionnaires

• ERM Process

• Review & amend program after problems occur

• Senior Leader Meetings

Consistent Enforcement and Alignment of Incentives

� Impeccable Ethics

> Follows the Freescale code of conduct

> Acts with integrity> Communicates openly and

honestly> Treats everyone with respect

and fairness

Creates an environment where employees want to do the right thing

Manager specific Maintain our commitment to being the most ethical company in the business

Freescale

Innovation

Speed

CustomerFocus

FundamentalsImpeccable

Ethics

Ownership

ETHICSline Contacts

OBCE Contact Statistics 2006 2007 2008

�Total Contacts Received by the OBCE

*** *** ***

Anonymous Contacts 17 35 36

Unsubstantiated Allegations 18 14 23

Anonymous with

Unsubstantiated Allegations5 11 8

Contacts Immediately

Reported to the

Audit/Legal Committee

4 0 2

Contacts Leading to Employee

Termination7 7 6

Total Employee Terminations 9 10 6

ETHICSline Contacts

US

Unknown

LatAm/Can

EM EA

AsiaPac

2005 2006 2007

N/ A

P ol i cy

Gui dance

Issue

Repor ted

A ppr oval

per P ol i cy

2005 2006 2007

Securit y

Misc & Other

Human

Resources

Finance

EHS

Code of

Conduct2005 2006 2007

Contacts by Region

Contacts by Category Contact Type

ETHICSline Contacts

United States

LatAm/Can

EM EA

AsiaPac

Referred Out

OBCE

Investigation

Immediate

Response

2005 2006 20072005 2006 2007

31+ Days

15-30 Days

3-14 Days

0-2 Days

Employee Terminations Contact Cycle Time Handling and Response

2005 2006 2007

Standards, Monitoring and Reporting

� Freescale Code of Business Conduct and Ethics� Audit and Legal Committee Meeting� Quarterly Meetings:

Freescale Business Conduct and Ethics Leadership Team

Regional Business Conduct and Ethics CommitteesCountry Manager MeetingsDisclosure Committee

� Reports:

Monthly Contacts Report

Audit Committee ReportsYear End Metrics

� Regular Communications on Program

Ethics in Action

Test Your Ethics IQSummit Articles

Why Do an Ethical Climate Survey

� What is it? � a measure of employee perceptions of the practices

and behaviors that get rewarded and supported with regard to ethics in the workplace

� Why do it?� Useful for assessing the current state of your

organization’s ethical climate� Signals to employees and other stakeholders that their

opinions are valued, and that the organization is committed to acting with integrity

� But, done poorly, with no visible actions after the survey, and it will be viewed as management “papering the file

� Credit Where Credit is Due � For portions of this section of my presentation, I relied heavily on the following

article: Tiffany McDowell, PhD and Jose Tabuena, JD, CFE, CHC, Measuring Your Organization’s Climate for Ethics: The Survey Approach, Society of Corporate Compliance and Ethics, August 2007

Freescale’s Employee Survey – “FreeSpeak”

Background:� Freescale partnered with Corporate Leadership Council Solutions to create

and implement FreeSpeak, our employee engagement survey� The survey leverages the question bank of CLC solutions to permit

comparisons of employee engagement levels with other companies� Freescale first conducted the survey in April 2005, one year after we

launched as an independent company, and within six months of separating from Motorola

� We conducted two surveys a year in 2005, 2006 and 2007. Going forward, plan is to conduct the survey on an annual basis.

Objectives:� The employee engagement survey is a key element in Freescale’s cultural

transformation. � Survey results serve as the key measure of our progress in realizing the

desired Freescale culture� Provide employees a forum for their feedback on the Freescale work

environment� Identify areas for improvement at team, organization, division and corporate

levels – (Ex: Customer Loyalty – Key focus area in 2009)� Provide feedback directly to managers

What is Measured?

�Results measure four aspects of

cultural change:� Alignment to the Freescale

Fundamentals

� Employee opinions on how effective managers are in leading a high-performance culture

� Employee engagement levels, a measurement proven to have strong correlation to company performance

� Retention index, which is reflective of employees’ overall intent to stay

Freescale

Fundamentals

Manager

Effectiveness

Employee

Engagement

Retention Index

Freescale Overall Results

Cultural Dashboard

0.4

1

0.4

1 0.5

7

0.3

80.4

8

0.5 0.5

9

0.4

3

0.4

9

0.5

1

0.6

0

0.4

40.5

0.5

1 0.6

0.4

5

0.4

9

0.5

2 0.6

0.4

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

Fundamentals Manager

Effectiveness

Engagement Retention Index

Strongly Agree

Disagree

Agree

StronglyDisagree

Fundamentals

0.5

0

0.5

2

0.4

5

0.3

6

0.3

2

0.3

3

0.5

8

0.5

8

0.4

8

0.4

2

0.4

4

0.4

20.5

9

0.6

0

0.5

0

0.4

5

0.4

5

0.4

4

0.6

0.6

0.5

0.4

8

0.4

7

0.4

5

0.4

60.6

0.5

6

0.5

1

0. 4

6

0.4

9

0.4

4

0.4

7

-1.00

-0.80

-0.60

-0.40

-0.20

0.00

0.20

0.40

0.60

0.80

1.00

Ethic

s

Cust

omer

Focu

s

Owner

ship

Innov

atio

n

Speed

Gre

at T

alen

t

Colla

borat

ion

GoalGoal

Key Findings

Strengths & Most Improved:– Engagement continues to be the strongest of the four dashboard indicators

– Ethics and Customer Focus continue to be the strongest Fundamentals

– Speed showed the most improvement, increasing by +.02

Areas for Continued Improvement – Retention Index (Intent to Stay)

– Customer Focus

2Q05 4Q05 2Q06 4Q06 2Q07

Law Department Results

Cultural Dashboard

0.6

2

0.6

6

0.6

8

0.6

0

0.6

9

0.7

4

0.7

5

0.6

9

0.6

6

0.6

8

0.7

3

0.6

5

0.6

2

0.6

2

0.7

1

0.6

0.6

1

0.6

7

0.6

9

0.40.4

9

0.5

2 0.6

0.4

-1.00

-0.80

-0.60

-0.40

-0.20

0.00

0.20

0.40

0.60

0.80

1.00

Fundamentals Manager

Effectiveness

Engagement Retention Index

Strongly Agree

Disagree

Agree

StronglyDisagree

Fundamentals

0.7

6

0.6

4

0.6

4

0.5

3

0.5

8

0.5

5

0.8

3

0.7

2

0.6

9

0.6

4

0.6

0

0.6

20.7

9

0.7

3

0.6

8

0.6

0.5

9

0.5

0.7

7

0.6

9

0.6

3

0.6

1

0.5

4

0.5

7

0.5

8

0.8

1

0.6

2

0.6

1

0.6

1

0.5

5

0.5

8

0.5

7

0.6

0.5

6

0.5

1

0.4

9

0.4

7

0.4

6

0.4

4

-1.00

-0.80

-0.60

-0.40

-0.20

0.00

0.20

0.40

0.60

0.80

1.00

Ethic

s

Cust

omer

Focu

s

Owner

ship

Speed

Colla

boratio

n

Innova

tion

Gre

at T

alen

t

GoalGoal

Key Findings

Strengths & Most Improved:– Engagement and Manager Effectiveness scores are the strongest indicators

– Ahead of the rest of Freescale on all Fundamentals

Areas for Continued Improvement – Retention Index dropped dramatically, by .2

– While still ahead of Freescale overall, most areas continue to decline

2Q05 4Q05 2Q06 4Q06 2Q07 FSL

Sample - Calendar & Expectations

� 22 January Manager Reporting Tool available: www.clcmetrics.com/ManagerTool

� 15 February Share results with your manager and direct reports

� 28 February Work with manager and team to formulate your action plan

� 15 March All M1 & above managers must document action plans within the Talent Pipeline Management (TPM) tool:

https://summit.freescale.net/irj/portal

All supervisors must document action plans within the Performance

Management (PM) System: https://summit.freescale.net/irj/portal

� Ongoing Schedule regular follow up dialogues with your employeesand manager to highlight progress and solicit support neededduring the year.

Update your progress to action plan via TPM - M1 & above managers and via Performance Management tool - Supervisors

Ethical Climate Survey on a Budget

� Recognize that not everyone will have budget approved for a third party survey

� Doing it yourself

� There is no single right approach to measuring a climate for ethicsStep 1: Determine your survey objectives

� Why conduct a survey� What will you do with the results

Step 2: Identify your audience

� All employees or random sample� Suggest – combine with senior leader interviews and focus groups

Step 3: Determine Response Scale

� Not a testing expert, but some suggestionsStep 4: Determine method of administrationStep 5: Administer the surveyStep 6: Assess the results and develop communication and action plans

Survey on a Budget – A Word about Wording

� Keep your questions short

� Avoid jargon and acronyms� Avoid requiring inaccessible information (“How

does our ethics program compare to the programs of our competitors?”

� Avoid hypothetical questions (“What would you do if…”)

� Avoid leading questions (“Most people feel…do you agree”)

� Use multiple questions on the same topic� Don’t make the survey too long� Provide a comments section at the end

Compliance and Ethics – Suggested Survey Areas

� Observations of perceived misconduct� Willingness to report misconduct/violations and violations in fact are

reported when they are perceived to occur� Perceptions about the organization’s responsiveness to misconduct � Fear of retaliation for reporting concerns� Willingness to seek help within the organization for ethical issues� Supervisors demonstrate/pay attention to ethics� Leadership demonstrates/pays attention to ethics� Open discussion of ethics in the workplace encouraged� Ethical behavior rewarded at all levels� Unethical behavior punished at all levels (management accountability)� Perceptions of fair treatment in the workplace

� Employee willingness to deliver “bad news” to management� Employee knowledge of workplace rules� Employee “commitment” to the organization� Confidence in preparedness to respond to ethical situations

Issues – what works and what doesn’t

SurveysSurveys� Why is there is so much emphasis on

surveys?

� Why surveys don’t always deliver:� Bad questions, bad design

� Inadequate benchmarking

� Employee mistrust

� Pressure to provide the “right” answers

� Fixing the problems

Case Study:

Case 2006-1108-03

confidential

Case Study I

Your company is proud of its best practice E&C program and its culture and leadership that supports it. Recently you’ve built E&C goals into management performance reviews and they are now key factors in bonus awards. Employee opinion survey results are used as part of the reviews.

You have also launched an ambitious, on-going risk assessment program and are using surveys as a tool to locate problem areas.

Case Study II

Three years ago you had a major breakthrough with your Board. You now have 30 minutes every year to present on E&C initiatives, metrics, trends and major investigations.

Your GC would like you to consolidate your metrics into a single “ethics score” which can be benchmarked against others and tracked over time. He has also encouraged you to increase your data-mining efforts to get the most from your metrics.

Case Study III

Your in-house employee opinion surveys, administered by HR, have consistently had excellent participation rates and in recent years very high scores with upward trends. But last month a third party conducted confidential employee focus groups as part of a culture assessment.

Many of the same questions from the survey were asked. The scores were 20% to as much as 40% lower.

Why so much emphasis on surveys?Why so much emphasis on surveys?� The Sentencing Guidelines and best practices call

for periodic program assessment and on-going risk assessments.

� Boards and executives want to see empirical evidence of successes, failures, and trends.

� Charts and graphs help everyone understand the program. They are now the norm.

� Measuring your own program is a prerequisite to benchmarking with others.

Why so much emphasis on surveys?Why so much emphasis on surveys?� Already in place and are well accepted. Databases,

infrastructure and intranet tools already exist. HR has done the hard work to solicit support from managers.

� Consultants, associations and vendors all have survey tools and have heavily marketed their use.

� Survey results have become a staple at every industry conference (and beyond).

� Surveys are relatively inexpensive.

� There’s truth to the maxim “you only get what you measure.”

Bad questions Bad designBad questions Bad design

� Leading questions are a common culprit:

“Do you know that you can call our Helpline anonymously - Yes or No?”

� “Social desirability”

“I am more, or less aware, or about the same (choose one) of the importance of ethics than I was a year ago?”

Fixing the problem Fixing the problem � Momentum can be an obstacle - “don’t fix what isn’t

broken” attitude.

� Fear that if questions changed it will be impossible to benchmark and track trends.

� Remember: survey writing is a specialized craft. It’s not as easy as it looks. Don’t go it alone.

� The right expertise is probably in-house. May need to look to those you don’t often work with, such as the Marketing Department.

Benchmark wiselyBenchmark wisely

� Apples and Oranges� Peer data from comparable companies is best – if you can

get it.

� Best benchmarking not always industry-based.

� National opinion polls interesting, but not particularly helpful for benchmarking.

� Fixing the problem – Choose benchmarks carefully, then add context, experience. (Subjective opinions – including yours - crucial for context)

Maintaining trustMaintaining trust

� “Why are they asking so many demographic questions? Won’t they be able to identify me?”

� Fixing the problem

� Push back.

� Keep the demographics to a minimum.

Maintaining trustMaintaining trust

� Fixing the problem

� The manner in which the survey is administered and collected can also contribute to mistrust.

� Phone, email or internet surveys—especially those conducted or hosted by the company itself—are viewed with suspicion.

� Unexplained bar coding, requiring hand-written responses.

PressurePressure

� Beware of Pressure to Ensure the Right Answers

� Managers prepping employees under the guise of training.

� Outright cheating, manipulating the employee selection process.

� Don’t believe “it can’t happen here.”

PressurePressure� Are performance reviews or bonuses tied to survey

results?

� If yes, then is there pressure to manipulate the findings?

� Do employees and managers know that “wrong”answers can lead to unwanted attention from Corporate?

� If yes, how do they handle the underlying motivation to deliver “right” answers?

Additional concernsAdditional concerns� What are the consequences when inaccurate survey

data is used as a principal element in risk assessments and result in the misallocation of limited resources?

� Has the penchant for surveys, coupled with other recent trends, altered the way your ethics office works?

Additional concernsAdditional concerns� Has control of the ethics and compliance office

shifted and are you inadvertently helping to make the case that ethics can be folded into Human Resources or perhaps outsourced?

� Do you now spend too much time at 30,000 feet and less time in the trenches?

� If we benchmark against each other and, at least some of the data is inaccurate, do we have a reliable standard to measure our effectiveness?

Additional concernsAdditional concerns� How can we successfully incorporate metrics into

our work while maintaining an emphasis not only on compliance but also on behaviors, relationships and values?

� Is there understanding that – at best - surveys measure employee perceptions, but not actual misconduct? “You can get a great “ethics score”and still have a felony-level price-fixing conspiracy that has been going on for years.” – Joe Murphy

Beyond surveys most reliable program metricsBeyond surveys most reliable program metrics

� Helpline trending and tracking – by far

� Any metric or combination which

helps spot trends

� Employee feedback from helpline

usage and post-training audits and

evaluations

� Employee direct feedback

� Audits

� No single metric - a combination of all

Recommended actions for Acme based on data outlier:

► If training or an awareness campaign related to hotline/helpline

reporting has recently been conducted, the level of reports should

be monitored for the next 3 quarters

► If neither is the case, Acme should conduct an employee survey or

focus groups to determine the root cause of the outlier

New analysis tool we are using

Trends over time

No easy answers but a recommended approachNo easy answers but a recommended approach……

� Determine what information is needed and how

that data will be used

� Evaluate the organization’s culture and what can

reasonably be accomplished

� Integrate measurements with other organizational

measurements

� Prepare yourself and other senior managers to

respond quickly to the findings

� Keep in mind that each audience has their own

definition of “effective”

Measuring Program Effectiveness:

What Works and What Doesn’t

“Measure twice, cut once”

Questions?Questions?