BLED COMPLIANCE AND ETHICS CONFERENCE (BCEC) 2016
The annual conference is one of the professional meetings organized once a year by EICE. We are paying more attention to the basic topics we discussed during the year, as well as current trends and interesting facts in the field of business compliance and ethics.
This year's conference on compliance and business ethics was held on 04.10.2016 , at IEDC - Bled Business School, in co-organization with UNGC Slovenia, with international lecturers and international participation.
Gabe Shawn Varges was one of the keynote speakers at the conference.
Gabe Shawn Varges highlighted the issue of hierarchy and concentration of power in corporations, as it is too often in the hands of just a few people. The solution, however, is no more or less hierarchy, but more controls and balances. From this point of view, the system of reporting violations that occur in the company, directly by employees, should be seen as a management tool. This has a significant impact on the system of checks and balances, as it removes several levels of obstacles to critical information coming to the fore within the company, so that it can respond in a timely manner and prevent greater damage. In today's increasingly complex and rapidly changing business environment, management and especially supervisory bodies need the help of control functions in companies, as well as the function of business compliance. In particular, he emphasized the importance of reporting these functions directly to the supervisory authority in order to prevent information from being filtered and to ensure better decision-making at the highest level.
Mag. Irena Prijovič presented the current challenges of corporate governance in Slovenia.
Mag. Irena Prijovič spoke about the regulation and challenges of corporate governance, which is not yet mature enough in the practices of Slovenian companies, especially in the field of non-public companies. Currently in Slovenia, one quarter of companies do not follow any code of governance and the truthfulness of the statements of those who apply the code is not verified. With the current amendment to the Companies Act (ZGD-1J), obligated companies will have to publish their management statement on the basis of the selected code. From the point of view of the maturity of the company's management, the management statement is its mirror, as the comparison between the real situation and the statement says a lot about the general culture within the company.
Sonja Šmuc presented the challenges of related decision-making and the procedure itself in the case of the ethical arbitration of the Honorary Arbitration of the Manager Association, regarding some prominent Slovenian managers at the time. After this body had no serious consideration for the first 20 years of its existence, tensions suddenly arose among most members, outraged at the conduct of some professional colleagues, expecting the Manager’s Association to take action.
Mojca Markizeti from Iskraemeco d.d. presented the management of the risk of human rights violations through verification of the supply chain and the origin of each component of the electronic meter they produce. For a deal with a consortium of Dutch companies worth several million euros, they have embarked on the path of making a ‘fair meter’. At the same time, they are faced with the fact of the lack of uniform standards and the absence of practices of other companies in this field, which means that suppliers are not sufficiently motivated to be transparent and to provide sound resources. And this despite the fact that 45 million people in the world live in slavery and their price reaches $ 15 per person.
Rok Praprotnik spoke about trends in the field of preventing corruption.
Rok Praprotnik presented the trends in regulating and prosecuting local and international corruption. The United States is by far the most advanced in prosecuting corruption, and the fines that European corporations have also received from the US authorities amount to hundreds of millions and even billions of dollars. However, the penalty is not the only burden that the company incurs in the event of a corruption scandal, but it is also the equivalent cost of internal investigations, official procedures, regulatory control, not to mention the costs of business downtime and loss of reputation. For companies operating in Slovenia and the surrounding region, an effective compliance system in the field of anti-corruption is an important advantage. The recent adoption of the French law on the prevention of cross-border corruption may have an additional and even more direct impact on Slovenian companies.
Dr. Andrea Bonime-Blanc presented the view of the international professional community on the evolving risk of cyber attacks
Dr. Andrea Bonime-Blanc warned of the growing threat of online attacks. Studies show that in 60% of cases, it is the human factor that represents the weakness in the information security system that leads to successful online attacks. The importance of appropriate internal policies, education, awareness and training of employees, management and contractors and their supervision is therefore crucial in the eventual assessment of the responsibility of the company and its management for harmful online attacks. At this point, all internal control functions, including the compliance function, are connected. In larger corporations, top decision-makers are often not information-aware, and they believe that information security management is not something they should be directly involved in. On the other hand, international experts declare cyber-reputation risk as the risk of all risks for 2016 and beyond.
As part of the conference, a round table was held for the first time. It was attended by: Gabe Shawn Varges, Rene Schmidpeter, Mojca Markizeti and Jurij Giacomelli, and moderated by Rok Praprotnik. Her conclusions on how to integrate ethics into everyday business practices in a tangible way were:
- the often exposed contradiction of whether to do business fairly or make more profit is not a real contradiction at all, as in the long run no company can make a profit and be successful if it violates the law and acts unethically;
- a company may find itself in the worst dilemma of legal and ethical business because it has the wrong business model or a misplaced, unsustainable strategy (the case of Volkswagen, which focused only on becoming the largest in the world, neglecting development and trends in its industry and eventually chose the path of sliding down to be able to fulfill its ambitions). Setting the right business model and sustainable strategy are therefore key prerequisites for fair business; compliance experts should therefore be involved in the process of setting up the company's strategy and long-term business plans;
- if an organization is already in trouble, it is crucial for its continued existence and development to consistently clear up the past and get rid of ‘rotten apples’; ethical judgment and the system of internal investigations are crucial for preventive action;
- it is necessary to have a supply chain management in which you know your partners well, the source of the resources they supply, to carry out initial and regular due diligence of their business, to carry out training and education;
- when transferring good ethical business practices, it is important to take into account the time component, the culture component of an environment and also the maturity of the company;
- from time to time, when introducing changes represented by the introduction of legal and ethical business practices, it is also necessary to “accept the heat” that accompanies it (due to the resistance of individuals, including the public);
- it is necessary to focus on the benefits of ethical business practices, such as opportunities to develop new, better, different products, business model, strengthen the trust of customers, business partners and other stakeholders, greater ability to generate capital, etc.
Who was the conference for?
Members of management bodies and managers in general who are primarily responsible for the operations of your organization, including the compliance and ethics of the management, decision-making and overall operation of the company, your employees and outsourcers. By knowing the existing and rising trends and good practices in this field, you can not only protect your company from losses, due to the strengthening of compliance and ethics, but also strengthen your competitiveness.
Regulators and other oversight bodies that monitor companies and their legal operations, assess their liability in the event of violations, and build an external environment that significantly influences the development of effective compliance and ethics programs within organizations.
Compliance Professionals , who set up and manage a compliance program in organizations and advise management and supervisory bodies and other management on existing and pressing compliance issues.
Internal audit professionals who work with compliance professionals, as well as oversee the compliance function.
Social responsibility professionals with whom compliance and business ethics issues are closely linked and intertwined.
Lawyers and other interested professionals who are, in one way or another, stakeholders or advisors in the organizational compliance and ethics management system.