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Leadership and ethical decision making

Leadership and ethical decision making. Instructor: Professor Nelson. BY DEBORAH THOMAS. ECG POLICY DOCUMENT - GROUP PROJECT INDIVIDUAL PORTION – CONFLICT OF INTEREST, MISAPPROPRIATION OF RESOURCES , compliance laws and reporting. overview.

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Leadership and ethical decision making

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  1. Leadership and ethical decision making Instructor: Professor Nelson

  2. BY DEBORAH THOMAS ECG POLICY DOCUMENT - GROUP PROJECT INDIVIDUAL PORTION – CONFLICT OF INTEREST, MISAPPROPRIATION OF RESOURCES, compliance laws and reporting

  3. overview • Unfortunately, due to the nature and the breath of the actions committed by one our employee’s, we are becoming one of the statistics. The true extent of this, I fear, hasn’t been fully realized as yet since it involves at least one of this former employee’s employer and who knows how many earlier projects with contracts of our clients, vendors, and others we do business with. This doesn’t include a potential violation of government laws or acts resulting in possible legal action. • As of now, we need to move forward with two separate programs: the first, to work on damage control which our legal department is handling; and two, make as many corrective actions possible to prevent this from occurring again. Your cooperation in this matter is greatly appreciated.

  4. Cost of fraud • Causes businesses more than $400 billion annually • $9 per person per day • Accounts for 6% loss of annual revenue • White collar crime profiling • 75% committed by college educated white males • Execs 16 times more likely to commit than their employees • Most costly to business with under 100 employees (association of fraud examiners, n.d.a.)

  5. Insider trading • Actions taken or sharing of nonpublic information • Have an affiliation with the company while capitalizing on the point above. • Misappropriation of information (Carey, 2011)

  6. Conflict of interest – series 66 • Misrepresentation of qualifications, fees, and services • Third party research without disclosure • Blatant failures • Disclose important facts • Client instructions • Implied endorsements • Misleading financial claims (investopedia, 2010)

  7. Deterrents to reporting • Cash and or credit privileges – petty cash, cooking accounts/books • Misrepresenting qualification and credentials • Bribery and corruption including kickbacks or illegal compensation/incentives (top toning) • Other assets • Contracts for services • Inventory • Negative publicity • Backlash or retaliatory legal action • Physical • Defamation, termination violation, etc. • Empathy for offender Fraud and misuse of assets (Herman, 2011)

  8. Prevention Detection • Code of conduct • Supplemental code of ethics • Audit committee oversight • Written policies and procedures • Fraud prevention training • Compliance training • Compliance action line • Internal audit function • Analysis of budget to actual results • Managerial internal control environment Fraud prevention and detection controls (Miles and Waskey, 2006)

  9. Intensive compliance laws • Anti monopoly law (Bid rigging) • Sub-contact act • Unfair competition prevention act • Insider trading • Construction industry law • Foreign corruption practices act (FCPA) • Intellectual property • Information security • Federal/state false claims act (Chiyoda, 2011; Miles & Waskey, 2006))

  10. Reporting system mapping (Chiyoda, 2011)

  11. Basic framework for reporting • Work environment improvements • Compliance with office rules • Request for attention • other (Chiyoda, 2011)

  12. conclusion • We thank you in advance for your cooperation in this matter and know that it has in no way reflected in the character or conduct of the vast majority of our employees. • . The offender appears to have acted on their own and legal disciplinary actions will be rendered against them. • We will be putting in place new training programs that will be available to all employees and associates 24/7, establish conduct committees with peer memberships in most functions areas, access channels to express concerns, and a number of controls to prevent this or any related actions from occurring again. We know we can get thru this and with the help of the ECG family, become a stronger, better organization with the type of environment that is healthy, strong ethics, and trust making it a place we want to work for.

  13. Background Scope • Despite our best efforts, there will be some actions that will may impact the organization adversely. • Causing no harm doesn’t just apply to the medical field but to business as a whole. • Changes in the current business climates and ripples from stones having been thrown into our pond has warranted a renewed assessment of current acceptable actions of our people and those we work with. • Establish an a appropriate level of professionalism within our organization and those in which we do business with. • Reiterating that we are representing the business community as a whole and the organization in specifically. • Presenting relevance to the cause and effect of personal behaviors and actions to our personal and business environments. Code of conduct and ethics policy (association of certified fraud examiners, n.d.a.)

  14. REFERENCE • Association of certified fraud examiners (N.D.A.) Fascinating fraud facts. Retrieved July 23, 2011 from http://www.nonprofitrisk.org/library/articles/internalcontrol05062001.shtml • AMLI. (2011) Code of business conduct and ethics: Honesty and integrity. Retrieved July 22, 2011 from http://www.amli.com/about-amli/code-of-conduct-and-ethics.aspx • Chiyoda. (2011) Commitment to CSR: Compliance. Retrieved July 22, 2011 from http://www.chiyoda-corp.com/csr/en/compliance/compliance.html • Herman, Melanie. (2011) broken promises, shattered trust. Retrieved July 22, 2011 from http://www.nonprofitrisk.org/library/articles/internalcontrol05062001.shtml

  15. References, cont. • Carey, Darchary. (2011) Types of insider trading. Retrieved July 23, 2011 from http://www.life123.com/career-money/investing/insider-trading/types-of-insider-trading.shtml • Investopia (2010). Series 66 – conflicts of interest. Retrieved July 23, 2011 from http://www.investopedia.com/exam-guide/series-66/conflicts-of-interest/other-prohibited-behaviours.asp • Miles & Waskey. (2006) rescare accounting policies and procedures. Retrieved July 23, 2011 from http://www.arboret.com/pdfs/ResCare_Legal_Fraud_Prevention_Policy.pdf • Parent, Marc. (2009) Code of business conduct. Retrieved July 22, 2011 from http://www.cae.com/en/about.cae/_pdf/CAE_Business_conduct_english.pdf

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