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Effective Compliance: What’s it Worth To You?

COMPLIANCE & GÖVERNANCE Non-Compliance Could Cost You Big 1.BAT Industries - tobacco settlement - $73 billion 2.Bank of Credit and Commerce - fraud - $17 billion 3.Philip Morris – tobacco settlement – $9 billion 4.IBM - age discrimination - $6 billion 5.Prudential Insurance- sales practices - $4 billion 6.American Home Products - diet product - $3.75 billion 7.Time Warner - accounting practices - $3.5 billion 8.Johns Manville - asbestos - $3 billion 9.Texaco - interfering in merger - $3 billion 10.Visa - anticompetitive business practices - $2.25 billion 11.Cinergy - pollution - $1.4 billion 3 Components of an Effective Compliance Program: 1.It is designed to mitigate, if not entirely prevent, employee conduct that could give rise to a criminal investigation and prosecution. 2.Where a corporation is indicted and ultimately settles with the government, the extent of its punishment can be significantly reduced with the existence of an internal compliance program. 3.By building compliance programs into existing management and business processes, responsibility and accountability is put where it works best, increasing effectiveness, reducing cost, and providing senior management and the board with the information they need. Keys to Getting the Right Compliance Process: 1.Strategic Perspective 2.Built into Business Processes 3.A Program Founded on Ethics and Integrity 4.A Risk-Based Approach and Clarity Around Responsibilities 5.Technology 6.Strong Compliance Office STATISTICS $1 Semillion Billion For every s 1 billion in revenue, the cost of compliance programs comes close to $6 million. For companies with more than $1 billion revenue, compliance costs equaled 190 full time equivalent employees. 13% $10 $10million $5 $4million Billion Billion highly regulated industries - the U.S. securities industry - compliance costs for each firm averaged a whopping 13 percent of revenues. When we consider one of the The cost of Sarbanes-Oxley compliance alone is averaging $4 million for companies with $5 billion revenue, and S10 million for companies with $10 billion and more in revenue. $64million $14million $3million $1 $1 billion revenue companies having just one compliance failure incurred S81 million in costs - consisting of settlement fees of $64 million lost business of $14 million and fine, remediation and business interruption of$3 million. Billion Sources: https://www.securityexecutivecouncil.com/common/download.html http://www.chinalat.com/2011/01/articles/another-category/new-sentencing-guidelines-amendments- amplify-the-importance-of-an-effective-compliance-program/ COMPLIANCE & GÖVERNANCE Non-Compliance Could Cost You Big 1.BAT Industries - tobacco settlement - $73 billion 2.Bank of Credit and Commerce - fraud - $17 billion 3.Philip Morris – tobacco settlement – $9 billion 4.IBM - age discrimination - $6 billion 5.Prudential Insurance- sales practices - $4 billion 6.American Home Products - diet product - $3.75 billion 7.Time Warner - accounting practices - $3.5 billion 8.Johns Manville - asbestos - $3 billion 9.Texaco - interfering in merger - $3 billion 10.Visa - anticompetitive business practices - $2.25 billion 11.Cinergy - pollution - $1.4 billion 3 Components of an Effective Compliance Program: 1.It is designed to mitigate, if not entirely prevent, employee conduct that could give rise to a criminal investigation and prosecution. 2.Where a corporation is indicted and ultimately settles with the government, the extent of its punishment can be significantly reduced with the existence of an internal compliance program. 3.By building compliance programs into existing management and business processes, responsibility and accountability is put where it works best, increasing effectiveness, reducing cost, and providing senior management and the board with the information they need. Keys to Getting the Right Compliance Process: 1.Strategic Perspective 2.Built into Business Processes 3.A Program Founded on Ethics and Integrity 4.A Risk-Based Approach and Clarity Around Responsibilities 5.Technology 6.Strong Compliance Office STATISTICS $1 Semillion Billion For every s 1 billion in revenue, the cost of compliance programs comes close to $6 million. For companies with more than $1 billion revenue, compliance costs equaled 190 full time equivalent employees. 13% $10 $10million $5 $4million Billion Billion highly regulated industries - the U.S. securities industry - compliance costs for each firm averaged a whopping 13 percent of revenues. When we consider one of the The cost of Sarbanes-Oxley compliance alone is averaging $4 million for companies with $5 billion revenue, and S10 million for companies with $10 billion and more in revenue. $64million $14million $3million $1 $1 billion revenue companies having just one compliance failure incurred S81 million in costs - consisting of settlement fees of $64 million lost business of $14 million and fine, remediation and business interruption of$3 million. Billion Sources: https://www.securityexecutivecouncil.com/common/download.html http://www.chinalat.com/2011/01/articles/another-category/new-sentencing-guidelines-amendments- amplify-the-importance-of-an-effective-compliance-program/ COMPLIANCE & GÖVERNANCE Non-Compliance Could Cost You Big 1.BAT Industries - tobacco settlement - $73 billion 2.Bank of Credit and Commerce - fraud - $17 billion 3.Philip Morris – tobacco settlement – $9 billion 4.IBM - age discrimination - $6 billion 5.Prudential Insurance- sales practices - $4 billion 6.American Home Products - diet product - $3.75 billion 7.Time Warner - accounting practices - $3.5 billion 8.Johns Manville - asbestos - $3 billion 9.Texaco - interfering in merger - $3 billion 10.Visa - anticompetitive business practices - $2.25 billion 11.Cinergy - pollution - $1.4 billion 3 Components of an Effective Compliance Program: 1.It is designed to mitigate, if not entirely prevent, employee conduct that could give rise to a criminal investigation and prosecution. 2.Where a corporation is indicted and ultimately settles with the government, the extent of its punishment can be significantly reduced with the existence of an internal compliance program. 3.By building compliance programs into existing management and business processes, responsibility and accountability is put where it works best, increasing effectiveness, reducing cost, and providing senior management and the board with the information they need. Keys to Getting the Right Compliance Process: 1.Strategic Perspective 2.Built into Business Processes 3.A Program Founded on Ethics and Integrity 4.A Risk-Based Approach and Clarity Around Responsibilities 5.Technology 6.Strong Compliance Office STATISTICS $1 Semillion Billion For every s 1 billion in revenue, the cost of compliance programs comes close to $6 million. For companies with more than $1 billion revenue, compliance costs equaled 190 full time equivalent employees. 13% $10 $10million $5 $4million Billion Billion highly regulated industries - the U.S. securities industry - compliance costs for each firm averaged a whopping 13 percent of revenues. When we consider one of the The cost of Sarbanes-Oxley compliance alone is averaging $4 million for companies with $5 billion revenue, and S10 million for companies with $10 billion and more in revenue. $64million $14million $3million $1 $1 billion revenue companies having just one compliance failure incurred S81 million in costs - consisting of settlement fees of $64 million lost business of $14 million and fine, remediation and business interruption of$3 million. Billion Sources: https://www.securityexecutivecouncil.com/common/download.html http://www.chinalat.com/2011/01/articles/another-category/new-sentencing-guidelines-amendments- amplify-the-importance-of-an-effective-compliance-program/ COMPLIANCE & GÖVERNANCE Non-Compliance Could Cost You Big 1.BAT Industries - tobacco settlement - $73 billion 2.Bank of Credit and Commerce - fraud - $17 billion 3.Philip Morris – tobacco settlement – $9 billion 4.IBM - age discrimination - $6 billion 5.Prudential Insurance- sales practices - $4 billion 6.American Home Products - diet product - $3.75 billion 7.Time Warner - accounting practices - $3.5 billion 8.Johns Manville - asbestos - $3 billion 9.Texaco - interfering in merger - $3 billion 10.Visa - anticompetitive business practices - $2.25 billion 11.Cinergy - pollution - $1.4 billion 3 Components of an Effective Compliance Program: 1.It is designed to mitigate, if not entirely prevent, employee conduct that could give rise to a criminal investigation and prosecution. 2.Where a corporation is indicted and ultimately settles with the government, the extent of its punishment can be significantly reduced with the existence of an internal compliance program. 3.By building compliance programs into existing management and business processes, responsibility and accountability is put where it works best, increasing effectiveness, reducing cost, and providing senior management and the board with the information they need. Keys to Getting the Right Compliance Process: 1.Strategic Perspective 2.Built into Business Processes 3.A Program Founded on Ethics and Integrity 4.A Risk-Based Approach and Clarity Around Responsibilities 5.Technology 6.Strong Compliance Office STATISTICS $1 Semillion Billion For every s 1 billion in revenue, the cost of compliance programs comes close to $6 million. For companies with more than $1 billion revenue, compliance costs equaled 190 full time equivalent employees. 13% $10 $10million $5 $4million Billion Billion highly regulated industries - the U.S. securities industry - compliance costs for each firm averaged a whopping 13 percent of revenues. When we consider one of the The cost of Sarbanes-Oxley compliance alone is averaging $4 million for companies with $5 billion revenue, and S10 million for companies with $10 billion and more in revenue. $64million $14million $3million $1 $1 billion revenue companies having just one compliance failure incurred S81 million in costs - consisting of settlement fees of $64 million lost business of $14 million and fine, remediation and business interruption of$3 million. Billion Sources: https://www.securityexecutivecouncil.com/common/download.html http://www.chinalat.com/2011/01/articles/another-category/new-sentencing-guidelines-amendments- amplify-the-importance-of-an-effective-compliance-program/ COMPLIANCE & GÖVERNANCE Non-Compliance Could Cost You Big 1.BAT Industries - tobacco settlement - $73 billion 2.Bank of Credit and Commerce - fraud - $17 billion 3.Philip Morris – tobacco settlement – $9 billion 4.IBM - age discrimination - $6 billion 5.Prudential Insurance- sales practices - $4 billion 6.American Home Products - diet product - $3.75 billion 7.Time Warner - accounting practices - $3.5 billion 8.Johns Manville - asbestos - $3 billion 9.Texaco - interfering in merger - $3 billion 10.Visa - anticompetitive business practices - $2.25 billion 11.Cinergy - pollution - $1.4 billion 3 Components of an Effective Compliance Program: 1.It is designed to mitigate, if not entirely prevent, employee conduct that could give rise to a criminal investigation and prosecution. 2.Where a corporation is indicted and ultimately settles with the government, the extent of its punishment can be significantly reduced with the existence of an internal compliance program. 3.By building compliance programs into existing management and business processes, responsibility and accountability is put where it works best, increasing effectiveness, reducing cost, and providing senior management and the board with the information they need. Keys to Getting the Right Compliance Process: 1.Strategic Perspective 2.Built into Business Processes 3.A Program Founded on Ethics and Integrity 4.A Risk-Based Approach and Clarity Around Responsibilities 5.Technology 6.Strong Compliance Office STATISTICS $1 Semillion Billion For every s 1 billion in revenue, the cost of compliance programs comes close to $6 million. For companies with more than $1 billion revenue, compliance costs equaled 190 full time equivalent employees. 13% $10 $10million $5 $4million Billion Billion highly regulated industries - the U.S. securities industry - compliance costs for each firm averaged a whopping 13 percent of revenues. When we consider one of the The cost of Sarbanes-Oxley compliance alone is averaging $4 million for companies with $5 billion revenue, and S10 million for companies with $10 billion and more in revenue. $64million $14million $3million $1 $1 billion revenue companies having just one compliance failure incurred S81 million in costs - consisting of settlement fees of $64 million lost business of $14 million and fine, remediation and business interruption of$3 million. Billion Sources: https://www.securityexecutivecouncil.com/common/download.html http://www.chinalat.com/2011/01/articles/another-category/new-sentencing-guidelines-amendments- amplify-the-importance-of-an-effective-compliance-program/ COMPLIANCE & GÖVERNANCE Non-Compliance Could Cost You Big 1.BAT Industries - tobacco settlement - $73 billion 2.Bank of Credit and Commerce - fraud - $17 billion 3.Philip Morris – tobacco settlement – $9 billion 4.IBM - age discrimination - $6 billion 5.Prudential Insurance- sales practices - $4 billion 6.American Home Products - diet product - $3.75 billion 7.Time Warner - accounting practices - $3.5 billion 8.Johns Manville - asbestos - $3 billion 9.Texaco - interfering in merger - $3 billion 10.Visa - anticompetitive business practices - $2.25 billion 11.Cinergy - pollution - $1.4 billion 3 Components of an Effective Compliance Program: 1.It is designed to mitigate, if not entirely prevent, employee conduct that could give rise to a criminal investigation and prosecution. 2.Where a corporation is indicted and ultimately settles with the government, the extent of its punishment can be significantly reduced with the existence of an internal compliance program. 3.By building compliance programs into existing management and business processes, responsibility and accountability is put where it works best, increasing effectiveness, reducing cost, and providing senior management and the board with the information they need. Keys to Getting the Right Compliance Process: 1.Strategic Perspective 2.Built into Business Processes 3.A Program Founded on Ethics and Integrity 4.A Risk-Based Approach and Clarity Around Responsibilities 5.Technology 6.Strong Compliance Office STATISTICS $1 Semillion Billion For every s 1 billion in revenue, the cost of compliance programs comes close to $6 million. For companies with more than $1 billion revenue, compliance costs equaled 190 full time equivalent employees. 13% $10 $10million $5 $4million Billion Billion highly regulated industries - the U.S. securities industry - compliance costs for each firm averaged a whopping 13 percent of revenues. When we consider one of the The cost of Sarbanes-Oxley compliance alone is averaging $4 million for companies with $5 billion revenue, and S10 million for companies with $10 billion and more in revenue. $64million $14million $3million $1 $1 billion revenue companies having just one compliance failure incurred S81 million in costs - consisting of settlement fees of $64 million lost business of $14 million and fine, remediation and business interruption of$3 million. Billion Sources: https://www.securityexecutivecouncil.com/common/download.html http://www.chinalat.com/2011/01/articles/another-category/new-sentencing-guidelines-amendments- amplify-the-importance-of-an-effective-compliance-program/

Effective Compliance: What’s it Worth To You?

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To save the money, an enterprises need to spend money on compliance. A February 2010 Open Pages report on non-compliance costs showed that compliance failures could leave enterprises paying out billions.

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