Ethical Risk Management

Training Duration:
2 days

Training Delivery Method:
On-site, instructor-led course; or online, instructor-led course

Prerequisites:
Some management and governance experience.

What Problem Does This Training Help Solve?
Provides framework, methodology, and processes for ethical risk management

Who Should Attend?
CECO (chief ethical compliance officer) and their staff, CRO, management, auditors, management consultants

Course Material:
Content-rich manual/course handouts consisting of about 600 foils

Course Syllabus:
(Note: This is a 3 credit graduate-level course (36 hours of instruction) offered at New York University.)

This course will provide a broad range of Ethical Risks inherent with the explosive growth of the global economy. The core focus of the class is in defining, discussing, and addressing the unique regulatory, cultural, and personal ethical dilemmas confronted by managers in the world economy of the twenty-first century. Many nuances and realities of formal (regulatory), global (cultural), and personal ethical risks will be presented for discussion and debate. Case study examples will be addressed, including but not limited to: Chiquita, Enron, MCI/WorldCom, and the sub-prime lending meltdown. Postulation of example risks will be offered as stimulation for the student’s individual development of avoidance and/or resolution methodologies. Formal and informal student classroom interaction will be crucial to stimulating the sharing of actual day-to-day, business-related ethical dilemmas. Classroom discussions will provide the baselines for identifying potential ethical conflicts that can be faced by managers as they manage cross-border, cross-cultural, and multi-ethnic organizations. Development of possible resolutions will be proposed, dissected, evaluated, and debated within the parameters of both experienced and theoretical, in various ethically conflicting business situations. Upon successful completion of this course, attendees will have gained a broad understanding of the existence of Ethical Risks (regulatory, global and personal) in business, the skills with which to evaluate the impact of conflicting ethics on the geopolitical landscape, and a solid foundation for recognizing the need for both personal awareness of, and adjustment to, ethical risks in a global economy.

In addition, there will be discussion on ethical risk analysis, risk assessment, internal controls, risk mitigation, risk acceptance, role of CECO, the role of the CRO, risk measurement, risk training, senior management’s role, and many more topics.

Subject matter will not only be discussed from an ethics and moral perspective, but also from a business perspective as part of enterprise risk management.

Seminar Objectives:

Ethical risk has recently surfaced as a major challenge in the public sector and the corporate world. Major corporations have a CECO (chief ethical compliance officer) as a senior level officer position for identifying and managing ethical risks. This course will not only provide attendees a deep understanding of ethical risks related to regulatory, global, and personal areas but also provide knowledge about how to address them, control them, mitigate them, and at some level, accept them as residual risks from the CECO and board of director’s perspective.

Ethical risk has to be managed like any other risk such as credit risk, market risk, and operational risk. Ethical risk, besides its moral implications, can have devastating affects on stakeholder’s interests in a public company. Some of the recent corporate incidents have resulted in serious consequences for the corporate world – shareholders, creditors, employees, customers, and other stakeholders. This course will not only cover the subject matter from an ethical and moral perspective but also from a shareholder value perspective. Ethical risks must be managed using preventive controls, detective controls, and corrective controls. Concepts of risk mitigation, risk acceptance, and risk transfer will be discussed. Policies and procedures related to ethical risk and tone at the top will be addressed.

Topics to be covered:

• Ethical Risk Management concepts and terminology. We will begin to understand “what” we are trying to protect; “why” we are doing it; and “how” best to accomplish it.
• General strategy plan for ethical risk management
• Introduction to Ethical Risk and CSR
• Define risk, types of risks, ethical risk, global, formal (regulatory), personal, industry, decade of risk management, value vs. risk management, whose responsibility is eRM
• Classic Risk Model: The threat, the vulnerability, the assets, the risk, the controls, types of controls, acceptable risk
• Ethical Risk Assessment: Global reporting initiative, ERC quick test, SCA
• Ethical Risk Controls: preventive, detective, corrective, deterrent, directive, who accepts ethical risk
• Policies and Procedures: The first line of defense. Sample policies related to ethical risk, processes and procedures
• ER Governance and CECO: Role of the CECO, corporate governance and ethics, tone at the top
• Ethical Culture: Governance, tone at the top, awareness and training, transparency
• Ethical Risk in financial industry: Ethics and Wall Street, security industry, ethics and profit-oriented culture
• Global Environment: USA and European Union, USA and Asian Countries
• Ethical Risk Auditing and Assurance: inherent risks, control risks, audit risks, detection risks, damage control
• Ethical Risk Management: 10 Techniques for Ethical Risk Management