Best Practices in Due Diligence and the Risk/Rewards of Third Parties

1. 2013 Global Ethics Summit Best Practices in Due Diligence and the Risk/Rewards of Third Parties March 5, 2013

2. Addressing Third Parties • Discussion around diligence performed on suppliers, agents, intermediaries, contractors, joint ventures, and related parties. Explanation of which of these entities bring greatest brand and reputation risks to your business and tools to address these concerns.

3. Role of the Code of Conduct in Proper Diligence • Organizations developing supplier codes of conduct. • Third parties should be required to sign a supplier code of conduct

4. Background Investigations • How to best utilize background investigations for third parties • Examples

5. FCPA & UK Bribery Act • Corruption charges come from supply chain and distribution chain. Not enough to have internal policies, but must also be reviewing policies of third parties and suppliers. • Corruption will often involve senior executives at companies who have been with the organization for a long time. These senior executives can potentially get caught up in a major fraud case or corruption case.

6. Global Parties and Foreign Governments • Inherent challenges arise from dealing with global third parties and foreign governments. Tools should be used to ensure your company is performing proper diligence and to convince regulators if necessary that your organization is conducting an effective risk based approach to these third parties. • Risks arise in many countries, China in particular, around joint ventures. Discussion of proper diligence in JVs with China.