Best overall governance, compliance and ethics program (large cap)
Caption : Left to right: Lyn Cameron, Evan Sloves and Jeremy Wilson, all from Cisco, and Elizabeth Powers from Dewey & LeBoeuf
Cisco's approach to corporate governance can be summed up in three words: collaboration, collaboration and collaboration. The entire employee base is in some way involved in the compliance and governance program. It was thanks to this collaboration that Cisco built a best-in-class program that has seen it take home the award for best overall governance, compliance and ethics program (large cap) for two years running.
‘We have 70,000 employees and a decentralized compliance program,’ explains chief ethics officer Lyn Cameron. ‘In everything we deliver we have to work together and collaborating allows us to scale the
message to get it out to all our people. Collaborating makes everything we do more relevant because [the management and ethics teams] are not sitting in an ivory tower somewhere coming up with ideas but rather working with everyday employees.’
The outstanding quality of Cisco’s governance program is perhaps best illustrated by the caliber of the companies it beat to the award. The four other finalists – Baker Hughes, Best Buy, Chevron and Oracle – are all globally recognized for their commitment to governance. In its own words, Cisco explains: ‘Just as the global marketplace and potential business risks are ever-changing, so too must an internal governance, compliance and ethics function strive for continuous improvement and responsiveness. Over the last year, the Cisco team has made infrastructure changes to improve integration across the governance and learning functions, and created a centralized policy management function.’
The company takes ethics and governance seriously and speaks about its program on a regular basis, including during investor and analyst calls. ‘Talking about it in that type of forum shows how seriously we take it,’ says Cameron. The key to everything, especially effective shareholder communications, is transparency, she adds: ‘Our CEO is also very transparent. Our IR people are partners in the ethics process: they understand it well and like to talk about it.’
Ethics really does permeate everything the company does. There is even an ethics section in the CSR report. ‘That in itself is a real highlight and goes directly to our transparency and our messaging to the shareholder community,’ says Cameron.
Because of the geographical diversity of Cisco’s workforce, Cameron, who lives in the UK, and the ethics team lean heavily on technology to manage the program and deliver its message. ‘Cisco is a tech company so communication should not be difficult,’ she points out. ‘We collaborate a lot via various technologies and it works seamlessly in a global environment. This is also a principle we apply to communicating our ethics and compliance messaging.’ This form of collaboration is not just about delivering a message and managing the program. As Cameron notes, using tech tools greatly reduces the need for travel and printing of documents, which results in a significant reduction in Cisco’s carbon footprint, something it takes very seriously.
One recent success of cross-section partnering is the creation of a centralized policy function. Cameron realized that managers and employees could not easily find the applicable governing policy they needed so she and the governance, risk management and compliance (GRC) team worked with multiple functions to centralize several hundred policies. These efforts resulted in a policy board, a searchable Policy Central internal website and a dedicated position to administer the program.
The GRC team hopes to take the lead in influencing change and management accountability for ethical business practices and fiduciary responsibility, using best-in-class methodologies to enable real-time monitoring and enhance shareholder value. To encourage two-way communications across the global GRC team, the GRC vice president writes an internal blog and established a GRC-only wiki and discussion forum for feedback.
The team also continues to optimize technology. Previously, Cisco’s certification processes were managed by three separate groups – legal, IT and communications – using separate tools. The GRC team developed an integrated software application as a centralized compliance certification and learning management system: entitled the Ethics Connect, it is designed to support several functions. For example, Cisco’s legal team now uses this home-grown software for internal Foreign Corrupt Practices Act certification and training.
‘I think our tone is excellent, from the chief executive right down across the executive members,’ says Cameron. ‘They are always available and approachable. You don’t have to feed them the ethics message – it is something they inherently understand, and that makes things a lot easier.’
Our free weekly email newsletters are an essential bulletin of GRC updates, insight and information.
Our experienced journalists provide relevant, timely information and analysis that will keep you at the forefront of industry developments and best practice.
Sign-up to receive your copy when you register with the Corporate Secretary website for free.