Do you want to be a Billionaire

The truth about Tone from the Top

The truth about Tone from the TopImage: Speaker by Bjrn Andersson from the Noun Projecthttps://thenounproject.com/search/?q=announcement&i=76611

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Are your executives telling the truth when they sayethics matter?

FIFA protects the integrity of football and is fighting corruption in football.-FIFA Football Governance The guardians of the game 20 November 2014

FIFA protects the integrity of football and is fighting corruption in football.-FIFA Football Governance The guardians of the game 20 November 2014Source: http://www.fifa.com/governance/videos/y=2014/m=11/video=the-guardians-of-the-game-2477119.html

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We stand for respectable, honest actions in everyday business that are in accordance with rules... - The Volkswagen Group Code of ConductSource: http://www.volkswagenag.com/content/vwcorp/content/en/the_group/compliance.html

We stand for respectable, honest actions in everyday business that are in accordance with rules... - The Volkswagen Group Code of ConductSource: http://www.volkswagenag.com/content/vwcorp/content/en/the_group/compliance.html

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The Tone from the Top at FIFA and Volkswagen share a common elementWhat is it?

The Tone from the Top at FIFA and Volkswagen share a common elementWhat is it?Image: Speaker by Bjrn Andersson from the Noun Projecthttps://thenounproject.com/search/?q=announcement&i=76611

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They are lying.

They are lying.Image: Lie ByIconathon,US https://thenounproject.com/search/?q=false&i=15281

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They are not alone.

They are not alone.Image: Lie ByIconathon,UShttps://thenounproject.com/search/?q=false&i=15281

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Management or the CEO is involved in 53% of bribery cases; Senior executives know about 86% of corporate fraud cases

Management or the CEO is involved in 53% of bribery cases; Senior executives know about 86% of corporate fraud casesSource: Corporate Executive Board, 2006, quoted in RAND Symposium, Culture, Compliance and the C-Suite: http://www.rand.org/pubs/conf_proceedings/CF316.htmlSource: OECD Foreign Bribery Report: http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm

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If you wanted to design an incubator for generating misconduct, it would look a lot like the C-Suite

If you wanted to design an incubator for generating misconduct, it would look a lot like the C-SuiteQuote: RAND Symposium, Culture, Compliance and the C-Suite: http://www.rand.org/pubs/conf_proceedings/CF316.htmlImage:: Team designed by Wilson Joseph from the Noun Project http://thenounproject.com/term/team/35432/

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What makes the C-Suite so susceptible to corruption?

What makes the C-Suite so susceptible to corruption?Image: Dark Money By Iconathonhttps://thenounproject.com/search/?q=corrupt&i=15301

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Management readily sees cause and effect between bribery and sales

Management readily sees cause and effect between bribery and salesImage: Linear Interaction By Attilio Baghino, IThttps://thenounproject.com/search/?q=linear&i=24519

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Companies that bribe have greater sales growth compared to control firms for 3 years before and 3 years after winning a major contract through bribery

Companies that bribe have greater sales growth compared to control firms for 3 years before and 3 years after winning a major contract through briberySource: Cheung, Stephen Yan-Leung, Rau, Raghavendra and Stouraitis, Arishttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1772246How Much do Firms Pay as Bribes and What Benefits do They Get? Evidence from Corruption Cases Worldwide (March 30, 2012)12

But...

But...13

But there are negative side effects of corruption

But there are negative side effects of corruptionImages: Linear Interaction By Attilio Baghino, IT, https://thenounproject.com/search/?q=linear&i=24520https://thenounproject.com/search/?q=linear&i=24519

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Companies that bribe have poorer net profit margin (net income divided by sales revenue) for the same 6 year period

Companies that bribe have poorer net profit margin (net income divided by sales revenue) for the same 6 year periodSource: Cheung, Stephen Yan-Leung, Rau, Raghavendra and Stouraitis, Aris http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1772246How Much do Firms Pay as Bribes and What Benefits do They Get? Evidence from Corruption Cases Worldwide (March 30, 2012)

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Companies that bribe have poorer cumulative abnormal returns (difference between the sum of the monthly returns for bribing firms versus control firms) for the same 6 year period

Companies that bribe have poorer cumulative abnormal returns (difference between the sum of the monthly returns for bribing firms versus control firms) for the same 6 year periodSource: Cheung, Stephen Yan-Leung, Rau, Raghavendra and Stouraitis, Arishttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1772246How Much do Firms Pay as Bribes and What Benefits do They Get? Evidence from Corruption Cases Worldwide (March 30, 2012)

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Companies that bribe perform poorer on nearly every corporate metric used to measure success

Companies that bribe perform poorer on nearly every corporate metric used to measure successSource: Cheung, Stephen Yan-Leung, Rau, Raghavendra and Stouraitis, Arishttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1772246How Much do Firms Pay as Bribes and What Benefits do They Get? Evidence from Corruption Cases Worldwide (March 30, 2012)

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If you endorse corruption to achieve a goal, you endorse corruption (full stop)

If you endorse corruption to achieve a goal, you endorse corruption (full stop)Image: Speaker by Bjrn Andersson from the Noun Projecthttps://thenounproject.com/search/?q=announcement&i=76611

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If you lie, your employees will lie

If you lie, your employees will lieImage: Lie ByIconathon,UShttps://thenounproject.com/search/?q=false&i=15281

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If you cheat, your employees will cheat

If you cheat, your employees will cheatImage: Deep Web By Matt Brooks, UShttps://thenounproject.com/search/?q=fraud&i=62765

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If you give bribes, your employees will take bribes

If you give bribes, your employees will take bribesImage: Bribe By Luis Prado, UShttps://thenounproject.com/search/?q=bribe&i=26816

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Tone from the top is not what you say, its what you do

Tone from the top is not what you say, its what you doImage: Speaker by Bjrn Andersson : https://thenounproject.com/term/presenter/76611/Bribe By Luis Prado, US: https://thenounproject.com/search/?q=bribe&i=26816

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81% of all frauds are perpetrated by at least one insider

81% of all frauds are perpetrated by at least one insiderImage: Deep Web By Matt Brooks, US, https://thenounproject.com/search/?q=fraud&i=62765Source: Kroll Global Fraud Report 2015/16 http://www.kroll.com/global-fraud-report

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5% of all revenues are lost due to occupational frauds

5% of all revenues are lost due to occupational fraudsImage:Grab ByIris Sun,GA, https://thenounproject.com/search/?q=theft&i=121228Source: ACFEReport to the Nations on Occupational Fraud and Abuse, http://www.acfe.com/rttn.aspx24

Companies are more often victims of corruption than beneficiaries

Companies are more often victims of corruption than beneficiariesExternal Fraud Source: OECD Foreign Bribery Report (2014)Internal Fraud Source: ACFEReport to the Nations on Occupational Fraud and Abuse, http://www.acfe.com/rttn.aspxImage: Fraud ByIconathon,US https://thenounproject.com/search/?q=fraud&i=15213

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How can you change a culture of corruption?

How can you change a culture of corruption?Image: businessmen by tsv from the Noun Projecthttps://thenounproject.com/search/?q=team&i=48054

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Start changing traditional ethics training

Start changing traditional ethics trainingImage: Education designed by Chris Matthews: http://thenounproject.com/term/education/3012/

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When the big people get in trouble, the little people get ethics training.

When the big people get in trouble, the little people get ethics training. Quote: RAND Symposium, Culture, Compliance and the C-Suite: http://www.rand.org/pubs/conf_proceedings/CF316.htmlImage: Education designed by Chris Matthews: http://thenounproject.com/term/education/3012/

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Target the big people about how corruption causes internal fraud

Target the big people about how corruption causes internal fraudImages: Linear Interaction By Attilio Baghino, IThttps://thenounproject.com/search/?q=linear&i=24520https://thenounproject.com/search/?q=linear&i=24519

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CEOs are prone to viewing the companys success as indistinguishable from their own.

CEOs are prone to viewing the companys success as indistinguishable from their own.Quote: Scott Killingswroth, Partner Bryan Cave LLP, C is for Crucible: http://compliancestrategists.com/pro/wp-content/uploads/2013/10/%E2%80%9CC%E2%80%9D-Is-for-Crucible.pdfImage: Superhero designed by Juan Pablo Bravo from the Noun Project: http://thenounproject.com/term/superhero/23556/

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When bribery hurts shareholder value it hurts the CEO

When bribery hurts shareholder value it hurts the CEO Image: Graph BySimple Icons https://thenounproject.com/search/?q=decline&i=30986

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Use targeted motivators in your ethics training

Use targeted motivators in your ethics trainingImage: Education by Travis Yunishttps://thenounproject.com/search/?q=lecture&i=2597132

Motivation: Shareholder Value & Exec. Mgmt; Career Opportunity & Middle Mgmt; Job Security & General Employee Base

Motivation: Shareholder Value & Exec. Mgmt; Career Opportunity & Middle Mgmt; Job Security & General Employee Base

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How do whistleblowers help?

How do whistleblowers help?Image: Alert by Phil Laver from the Noun Projecthttps://thenounproject.com/search/?q=shout&i=22814

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Whistleblowers are effective at discovering external fraud, and even more effective at discovering internal fraud

Whistleblowers are effective at discovering external fraud, and even more effective at discovering internal fraudBribery Source: OECD Foreign Bribery Report (2014) http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htmFraud Source: ACFEReport to the Nations on Occupational Fraud and Abuse http://www.acfe.com/rttn.aspxImage: Whistleblower By Lorie Shaull, US, https://thenounproject.com/search/?q=whistleblower&i=89125

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Discovering Internal Frauds

Discovering Internal Frauds. Source: ACFEReport to the Nations on Occupational Fraud and Abuse http://www.acfe.com/rttn.aspx

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Median Losses After Discovery

Median Losses After DiscoverySource: ACFEReport to the Nations on Occupational Fraud and Abuse http://www.acfe.com/rttn.aspx

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Reduction in Median Losses with Effective Internal Controls

Reduction in Median Losses with Effective Internal ControlsSource: ACFEReport to the Nations on Occupational Fraud and Abuse http://www.acfe.com/rttn.aspx

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Whistleblowers are one of many internal controls that support an ethical culture that reduces internal corruption

Whistleblowers are one of many internal controls that support an ethical culture that reduces internal corruptionImage: Linear Interaction By Attilio Baghino, IT, https://thenounproject.com/search/?q=linear&i=24519

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An ethical culture that reduces internal corruption sustains a profitable culture

An ethical culture that reduces internal corruption sustains a profitable cultureImage: Linear Interaction By Attilio Baghino, IT, https://thenounproject.com/search/?q=linear&i=24519

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Sustained profits make your CEO a superhero

Sustained profits make your CEO a superheroImage: Superhero designed by Juan Pablo Bravo from the Noun Project: http://thenounproject.com/term/superhero/23556/

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So your executives can tell the truth when they say ethics matter

So your executives can tell the truth when they say ethics matterImage: Speaker by Bjrn Andersson from the Noun Projecthttps://thenounproject.com/search/?q=announcement&i=76611

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About the Author

BackgroundEric Pesik is currently the Associate General Counsel and Compliance Officer for Seagate Singapore International Headquarters Pte Ltd. He also serves as an Adjunct Assistant Professor with the University at Buffalo, State University of New York, in the School of Management. He has been a lawyer since 1997 and is a member of the State Bar of California, USA. He is also admitted to the US Court of International Trade in New York and the US Supreme Court in Washington, DC.Many of Mr. Pesiks presentations are available on SlideShare at: http://www.slideshare.net/ericpesik

DisclaimerThis work represents the opinions of the author alone, and is not the opinion his employer.

Creative Commons Attribution LicenseYou are free to share, copy, distribute, and transmit this work; to remix or adapt this work; and to make commercial use of this work, under the condition that you must attribute this work to Eric Pesik (but not in any way that suggests that I endorse you or your use of this work). Each slide contains source attributions and URL; before reusing, you must obtain the original images from the original sources, and you must comply with any applicable license restrictions imposed by the original source. http://creativecommons.org/licenses/by/3.0/

About the Author

BackgroundEric Pesik is currently the Associate General Counsel and Compliance Officer for Seagate Singapore International Headquarters Pte Ltd. He also serves as an Adjunct Assistant Professor with the University at Buffalo, State University of New York, in the School of Management. He has been a lawyer since 1997 and is a member of the State Bar of California, USA. He is also admitted to the US Court of International Trade in New York and the US Supreme Court in Washington, DC.Many of Mr. Pesiks presentations are available on SlideShare at: http://www.slideshare.net/ericpesik

DisclaimerThis work represents the opinions of the author alone, and is not the opinion his employer.

Creative Commons Attribution LicenseYou are free to share, copy, distribute, and transmit this work; to remix or adapt this work; and to make commercial use of this work, under the condition that you must attribute this work to Eric Pesik (but not in any way that suggests that I endorse you or your use of this work). Each slide contains source attributions and URL; before reusing, you must obtain the original images from the original sources, and you must comply with any applicable license restrictions imposed by the original source. http://creativecommons.org/licenses/by/3.0/

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