Trends in Codes of Conduct
Like Web 2.0, do you have a “Code 2.0”? PepsiCo Chief Compliance Officer Stephen Naughton will share his team’s research into trends related to codes of business conduct. The session will leverage research that PepsiCo conducted while attempting to revise and update its own code and will focus on the most interesting innovations and developments.
Featuring:
* PepsiCo, Inc. VP, Compliance and Chief Compliance Officer Stephen M. Naughton
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Transcript
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Presenter's Notes: 1
Trends in Codes of Conduct
Trends in Codes of Conduct Stephen M. NaughtonVice President, Compliance and Business PracticesChief Compliance Officer PepsiCo, Inc.
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Trends in Codes of Conduct
David LandauSVP, Deputy General Counsel And Chief Compliance Officer at Starbucks Corporation Trends in Codes of Conduct
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Trends in Codes of Conduct
Stephen M. NaughtonVice President, Compliance and Business PracticesChief Compliance OfficerPepsiCo, Inc. Trends in Codes of Conduct
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Larry David Video
Larry David Video
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Trends in Codes of Conduct
Stephen M. NaughtonVice President, Compliance and Business PracticesChief Compliance OfficerPepsiCo, Inc. Trends in Codes of Conduct
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Trends in Codes of Conduct
Trends in Codes of Conduct Why Corporations have Codes of ConductThe 1992 organizational sentencing guidelines offered mitigation credit for a compliance program.Policy statements issued by the United States Department of Justice have consistently suggested that before prosecutorial discretion can be exercised, an organization must have an effective compliance program, including an effective code of conduct.
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Trends in Codes of Conduct
Trends in Codes of Conduct Written record of an organizations expectationsStatement of a companys ethical culture Fulfills the first hallmark set forth by the Federal Sentencing Guidelines (FSG), recommends the promotion of an organizational culture that encourages ethical conduct and a commitment to compliance with the law [through the establishment of] standards and procedures to prevent and detect criminal conduct.
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Trends in Codes of Conduct
Trends in Codes of Conduct SECs Disclosure Requirements:Focus on the results a code should achieveSpecifically, to deter wrongdoing and promote honest and ethical conduct and compliance with lawsSEC requirements pointedly avoided prescribing how to achieve those results.
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Trends in Codes of Conduct
Trends in Codes of Conduct What an effective Code should be:Understandable Relevant to the employees day-to-day experience in the organizationSet expectations for conductRather than merely listing prohibitions
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Pepsis Ongoing Review of its Code of...
Pepsis Ongoing Review of its Code of Conduct Directive from Senior Management: Explain what the Corporation Expects of Employees Develop a More User Friendly Code Trends in Codes of Conduct
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Hersheys User Friendly Code
Hersheys User Friendly Code
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Trends in Codes of Conduct
Trends in Codes of Conduct Additional purposes of the Code:Allows employees to quickly recognize when to seek guidanceEncourages employees to report concerns.
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Trends in Codes of Conduct
Trends in Codes of Conduct Revising a CoC is a rare opportunity to engage your employees in conversations about the type of work environment that is important to them As well as help each other to live the organizations values.
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Trends in Codes of Conduct
Trends in Codes of Conduct Pepsis Current CoC Why are we updating?Expository, paragraph basedShort four pagesLittle color and no pictures. Logical section headings included with examples in some sectionsWritten in 2005Translated in over 42 languages worldwide
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PepsiCos Code
PepsiCos Code
Presenter's Notes: 16
Trends in Codes of Conduct
Trends in Codes of Conduct Pepsis Current CoC Why are we updating?Expository, paragraph basedShort four pagesLittle color and no pictures. Logical section headings included with examples in some sectionsWritten in 2005Translated in over 42 languages worldwide
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Trends in Codes of Conduct
Trends in Codes of Conduct Pepsi Bottling Groups CoCRevised last year36 pagesColor throughout with pictures and design graphics on every page, including pictures of CEO, customers and PBG employees Questions and answers throughout
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PBGs Code
PBGs Code
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Trends in Codes of Conduct
Trends in Codes of Conduct PepsiAmericas CoC20 pages; developed over 5 years agoParagraph formNo questions and answers
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Trends in Codes of Conduct
Trends in Codes of Conduct Use of a Mission or Values StatementCode should speak to the ethical culture of an organization.Should reflect the emphasis of the Corp and its leaders.May be intro by CEO or separate statementOur updated Code will be based on Pepsis Performance with Purpose.
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Trends in Codes of Conduct
Trends in Codes of Conduct Pepsis Performance with PurposeFostering a culture where employees feel valuedBringing together what is good for business with what is good for the world.'
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Trends in Codes of Conduct
Trends in Codes of Conduct How long should a Code be?Between 6500 and 9000 wordsToo short: fails to adequately cover necessary risk areas thus raising questionsToo long: risk losing your reading audience
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Trends in Codes of Conduct
Trends in Codes of Conduct Length of Code Balance between:Ensure that employees will read the document while Ensuring that the Code will deliver all pertinent information to employees in an easy-to-read fashion.
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Trends in Codes of Conduct
Trends in Codes of Conduct Tone of the CodeInclusive tone use first personExample: We must all work to ensure ethical conduct here.Avoid the third-person voice, as this tone can be condescending. Stay away from alienating language such as, All employees must work to assist the Company in ensuring ethical conduct.
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Trends in Codes of Conduct
Trends in Codes of Conduct Tone within the CodeFocus on expected behaviors rather than prohibitions.Target the level of complexity to your broadest employee base.Reduce the average sentence length and replace long words with shorter synonyms
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Trends in Codes of Conduct
Trends in Codes of Conduct Tone - Consider international audiencesAvoid U.S.-centric wording, as well as specific terminology that references U.S. law. For instance, global codes should stay away from language such as foreign government official when defining non-U.S. government officials.Because global codes will likely be translated into several languages, it is important to avoid colloquialisms that may be difficult to translate. Retain local experts for translations and for Code review.
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Trends in Codes of Conduct
Trends in Codes of Conduct Structure and OrganizationWide variety from alphabetical list of topics to thematic coverage, such as our workplace or our relationship with our community. Must fit the organizations cultureWe will follow Performance with Purpose planks
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Trends in Codes of Conduct
Trends in Codes of Conduct Communicating expected behaviors: Take a positive approach, focusing on what is allowable first.Then later addressing what is prohibited. When possible, a code should offer reasons or rationales for each rule.When conduct is not clearly right or wrong, provide guidelines to help employees. Use of examples
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Trends in Codes of Conduct
Trends in Codes of Conduct Writing StyleActive voiceClear and conciseAppropriate Reading LevelFormal v. InformalConsistent FormatEngaging
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Trends in Codes of Conduct
Trends in Codes of Conduct Reaching a Broader Audience, use:Questions and answersReal-life scenariosExamples from the workplace that demonstrate
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Chiquitas Use of Real Life Scenarios
Chiquitas Use of Real Life Scenarios
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Trends in Codes of Conduct
Trends in Codes of Conduct Information re Additional Resources A code needs to give clear directions on where an employee can get additional advice and guidance.Set off contact info: use table or a graphic boxHotline information
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Trends in Codes of Conduct
Trends in Codes of Conduct Emphasize No Retaliation PolicyCodes must provide a clear and affirmative expression of the companys non-retaliation policy.Fear of retaliation is a leading cause of failure to report misconduct
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Trends in Codes of Conduct
Trends in Codes of Conduct Complaint Resolution ProcessExplain the process clearly and thoroughly Emphasize that concerns will be investigated promptly and thoroughlyProvide contact information for Hotline and Webline, if applicable
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Trends in Codes of Conduct
Trends in Codes of Conduct Importance of reporting concernsBy doing so, employees are doing the right thingAid the company halt and/or prevent misconductCreate a link between ethical conduct and reporting
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GE Linking Reporting to Integrity
GE Linking Reporting to Integrity
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Trends in Codes of Conduct
Trends in Codes of Conduct Code Version 3.0 is newest generation:Web-basedInteractiveWith live links to policies, corporate sitesWorkbook form with Learning Aids: Q&A; Dos and Dont; FAQDownloadable by pdf
Presenter's Notes: 37
Kimberly-Clarks 3.0 Code
Kimberly-Clarks 3.0 Code
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Trends in Codes of Conduct
Trends in Codes of Conduct Articulation of Repercussions of Violating the Code Code needs to clearly and consistently articulate the ramifications of violating the CodeBad things will happen to employees who violate it. Required by SEC, FSG and stock exchange listing rules.Codes frequently state at the outset that violations are subject to discipline up to and including termination. Is this enough? Probably. Additional admonitions run the risk of an employee arguing the absence of such a statement for a particular topic is implicit recognition that disciplinary sanctions ought not to apply in that case.
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Trends in Codes of Conduct
Trends in Codes of Conduct Ease of RevisionIn whatever form the Code ends, ensure that it can be easily revised and refreshed.For example, contact information should be easily changed.May also apply to substantive sections of the Code for changes in law or standards.
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Trends in Codes of Conduct
Trends in Codes of Conduct General topics normally addressed within a code include: Diversity and fair treatment Equal employment opportunity (in the United States) and discrimination Workplace safety, security and health (including substance abuse and violence) Employee privacy and confidentiality Antitrust and competition laws Fair sales and marketing practices Fair purchasing practices or procurement integrity Conflicts of interest and gifts and entertainment Proper collection and handling of competitive information Accuracy of records, accounts and financial statements Company assets (including theft and misuse) Confidential information and intellectual property concerns Inquiries from the media or outside analysts Proper document management Insider trading and inside information Political activities, including contributions and lobbying with company resources Procedures for handling an audit or government investigation Doing business with the U.S. government (for government contractors)
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Trends in Codes of Conduct
Trends in Codes of Conduct Engage appropriate groups earlyAvoid relying only upon HR and LegalUse test markets for review
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Trends in Codes of Conduct
Trends in Codes of Conduct Integration of the Code with the Overall compliance and ethics programA Code is only one element of an effective compliance and ethics programAnalyze how employees get info
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Trends in Codes of Conduct
Trends in Codes of Conduct Contact InformationSteve NaughtonChief Compliance OfficerVice President Compliance and Business PracticesPepsiCo, Inc.(914) 253-3274Stephen.naughton@pepsico.com
Presenter's Notes: 44
Trends in Codes of Conduct
Stephen M. NaughtonVice President, Compliance and Business PracticesChief Compliance OfficerPepsiCo, Inc. Trends in Codes of Conduct
Presenter's Notes: 4
Trends in Codes of Conduct
Stephen M. NaughtonVice President, Compliance and Business PracticesChief Compliance OfficerPepsiCo, Inc. Trends in Codes of Conduct
Presenter's Notes: 5
Trends in Codes of Conduct
Stephen M. NaughtonVice President, Compliance and Business PracticesChief Compliance OfficerPepsiCo, Inc. Trends in Codes of Conduct
Presenter's Notes: 5
Trends in Codes of Conduct
Stephen M. NaughtonVice President, Compliance and Business PracticesChief Compliance OfficerPepsiCo, Inc. Trends in Codes of Conduct
Presenter's Notes: 5
Trends in Codes of Conduct
Stephen M. NaughtonVice President, Compliance and Business PracticesChief Compliance OfficerPepsiCo, Inc. Trends in Codes of Conduct
Presenter's Notes: 5