The LRN ethics and compliance risk management practices report

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Total Number Employees % Respondents Under $250K 47% Under 5,000 Employees 47% $250K - $500K 14% 5,001 - 10,000 Emplyoees 13% $500K+ 16% 10,000+ Employees 40% I don't know 23% Operating Regions % Respondents 1 location 40% 2-3 locations 16% 4-6 locations 27% 7 locations 17% RESPONDENT PROFILE Ethics and Conducted between February and May 2008, LRN e-mailed an invitation to Compliance complete Budget by the survey Ethics to and senior Compliance ethics, Department compliance, Maturity Company Size legal, risk and audit professionals, of which 461 completed the survey. Ethics and Compliance Department Maturity Under 2,500 75% 7% Department maturity % Respondents 2,501 - 5,000 57% 12% Less than 2 years 20% 5,001 - 10,000 48% 16% Company Size 3-6 years Budget %Respondents 28% 10,000+ 20% 21% Total Number Employees % Respondents 6-8 years Under $250K 47% 18% Ethics and C Under 5,000 Employees 47% 9 years and more $250K - $500K 14% 29% E&C employees %Respondents 5,001 - 10,000 Emplyoees 13% Title and Unknown role of $500K+ respondents 16% 5% 1 14% 10,000+ Employees 40% I don't know 23% 2-5 45% All respondents had senior titles in ethics, compliance, legal, risk, audit or HR 5-10 fields. Fifty 15% 11+ 24% percent of Total respondents number of employees had % primary Respondents responsibility for their organizational ethics unknown and 2% Operating Regions % Respondents Less than 2,500 31% compliance 2,501-5,000 initiatives. 16% 5,001-10,000 13% 15% 18% 10,000+ 40% 1 location 40% 2-3 locations 16% 4-6 locations 27% 7 locations 17% Under $250K Size of companies 7% Ethics and Under $250K - $500K+ I don't The respondents Compliance profile is balanced $250K with $500K47% of respondents know coming from companies with Budget by Company Size less than 5,000 employees and 40% from companies with 10,000 or more employees. (In our 2007 survey, respondents came in majority from larger companies with more than 10,000 employees). Ethics and Compliance Department Maturity Under 2,500 75% 7% 2% 15% Department maturity % Respondents 2,501 - 5,000 57% 12% 13% 18% Less than 2 years 20% 5,001 - 10,000 48% 16% 18% 18% 3-6 years 28% 10,000+ 20% 21% 28% 32% 6-8 years 18% 9 years and more 29% E&C employees %Respondents Unknown 5% 1 14% Company Size 2-5 45% 5-10 15% 11+ 24% Total number of employees % Respondents unknown 2% Less than 2,500 31% 2,501-5,000 16% 5,001-10,000 13% 10,000+ 40% 10,000+ Employees 40% 47% Under 5,000 Employees 2% 75% $250K - $500K 13% 12% 57% $5 10,000+ Employees 40% Company Size 13% 5,001 - 10,000 Employees 47% 13% 5,001 - 10,000 Employees 2,501 - 5,000 Operating Employees 7 locations Budget 17% % Respondents I don't know $500K+ Number of global regions $250K - $500K Under 27% $250K Almost two-thirds of respondents (60%) have operations in 2 or more regions of the 4 world, - 6 locations Number of Employees Under 5,000 while 40% were located in only one country. The pie chart shows a breakdown of the Employees 1 number of regions of operation among respondents according to the location of their Ethics & C headquarters. 2 - 10,000+ Operating 40% Regions 31% Less than 2,500 7 locations Under 2,500 % Respo % Respondents Number of Employees 17% 13% 16% 40% 5,001 - 10,000 1 location 2,501 - 5,000 27% 4 - 6 locations % Respondents 16% 9 years and moreBudg I don’t know 23% 6 - 8 y 10,000+ 40% 31% Less than 2,500 2 - 3 locations $500k+ 16% % Respondents 14% 13% 5,001 - 10,000 16% Location of headquarters $250k - $500k Ethics & The majority of respondent companies (87%) were headquartered in the U.S. while others Budget 2,501 were - 5,000headquartered in Europe (6%), Canada (2%), Asia/ Pacific (2%), South America (1%), % Respo Africa (1%) and Middle East (1%). I don’t know % Respondents 23% 11+ 16% 47% Under $250k $500k+ LRN | 2008 Ethics 14% and Compliance Risk Management Practices Report | 44 5 -10 1 $250k - $500k
,000 es r 5,000 loyees an 2,500 s than 2,500 E&C employees %Respondents 1 14% 2-5 45% 5-10 15% 11+ 24% unknown 2% Ethics and Compliance Budget by Company Size 7 locations 4 - 6 locations I don’t know $500k+ Under $250K Operating Regions 27% 23% 17% 16% 40% Operating Regions 2 - 3 locations 7 locations 16% % Respondents 47% $250k - $500k $250K - $500K % Respondents 17% 14% $500K+ I don’t know % Respondents 23% I don't know Under 2,500 75% 7% 2% 15% 2,501 - 5,000 57% 12% 13% 18% 5,001 - 10,000 48% 16% 18% 18% 10,000+ 20% 21% 28% 32% E&C employees %Respondents 1 14% 2-5 45% 5-10 15% 11+ 24% unknown 2% 27% 4 - 6 locations Budget 16% Budget 40% 2 - 3 locations 1 location 75% 15% 2% 7% 57% RESPONDENT PROFILE 0% Industries represented 12% 60% Respondent companies’ Under 2,500 industry profile is mosaic-like 20% representing organizations from a broad range of industries such 2,501 as - 5,000 Healthcare, 16% Manufacturing, Energy/Power/Oil & Gas, 5,001 - 10,000 28% Financial Services, Insurance etc. Employees 75% 13% Maturity of Ethics and Compliance Budget Departments 57% More than three-fourths (78%) I don't of know 20% the respondent companies have had an ethics and 21% $500K+ 48% compliance function for more $250K than - $500K 3 years. Only in 5% of respondent companies was the ethics and compliance function Under newly $250K created (within past year) and these companies are, 0% for the most part, smaller ones with less than 2,500 employees. I don't know $500K+ $250K - $500K 9 years Under $250K 29% and more 18% 18% 48% 5% 20% 28% 21% Under 2,500 20% 2,501 - 5,000 Ethics & Compliance 5,001 - 10,000 Department Maturity Employees 10,000+ Unknown Budget 18% 28% Ethics & Compliance Department Maturity 6 - 8 years 10,000+ 40% 100% 20% 80% Less than 2 years 3 - 6 years % Respondents 5% 20% 9 years Size of the Ethics and Compliance Department 29% 1 location and more Among single-location companies, Ethics nearly & Compliance half (44%) Department have Size between 2-5 people in their ethics and compliance department, while 34% Unknown have more than 5 or more people. 18% 128% Among global companies, nearly all 6 have - 8 years more 2% people at their 3 - 6 headquarters years office than in 11+ 14% their international locations. Almost half 24% (45%) have 2-5 people in their headquarters office, and 39% have 5 or more people. Nearly half (49%) have just one ethics and compliance Under $250k person to server their international locations. % Respondents 15% 5 -10 45% Ethics & Compliance Department Size 2 - 5 11+ 18% Unknown Unknown % Respondents 2% 14% 24% 1 32% 40% Less than 2 years $500k+ 16% 14% 47% Under $250k 5 -10 15% 45% $250k - $500k 2 - 5 % Respondents % Respondents LRN | 2008 Ethics and Compliance Risk Management Practices Report | 45
Page 1 and 2: ® Inspiring Principled Performance
Page 3 and 4: EXECUTIVE SUMMARY Increased global
Page 5 and 6: EXECUTIVE SUMMARY LRN’s Approach
Page 7 and 8: KEY FINDINGS To address these conce
Page 9 and 10: KEY FINDINGS 10 companies also offe
Page 11 and 12: 20 SIGNIFICANT RISK MANAGEMENT TREN
Page 13 and 14: 80% 52% 58% 60% 40% 20% TRENDS 42%
Page 15 and 16: TRENDS ondents man 900% 000% Respon
Page 17 and 18: Why Ethics and Compliance Risk Asse
Page 19 and 20: Educating a Diverse Workforce An In
Page 21 and 22: Avoiding the Pitfalls of Detection
Page 23 and 24: 2008 DETAILED RESULTS DEFINE 1. Is
Page 25 and 26: Function 2008 Compliance 6300% Lega
Page 27 and 28: DETAILED RESULTS Lack of adequate r
Page 29 and 30: Ot Workforce Outreach Workforce Out
Page 31 and 32: DETAILED RESULTS terms of budget an
Page 33 and 34: Anonymous/Confidential Reporting Ch
Page 35 and 36: Top Challenges %Respondents No sign
Page 37 and 38: DETAILED RESULTS uantitative measur
Page 39 and 40: DETAILED RESULTS Quarterly 4100% An
Page 41 and 42: DETAILED RESULTS It’s also a posi
Page 43: LRN ETHICS AND COMPLIANCE MARKET MA
Page 47: RESPONDENT PROFILE Level of regulat

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