(CLP) Programs

Appleton Greene corporate training programs are all process-driven. They are used as vehicles to implement tangible business processes within clients’ organizations, together with training, support and facilitation during the use of these processes. Corporate training programs are therefore implemented over a sustainable period of time, that is to say, between 1 year (incorporating 12 monthly workshops), and 4 years (incorporating 48 monthly workshops). Your program information guide will specify how long each program takes to complete. Each monthly workshop takes 6 hours to implement and can be undertaken either on the client’s premises, an Appleton Greene serviced office, or online via the internet. This enables clients to implement each part of their business process, before moving onto the next stage of the program and enables employees to plan their study time around their current work commitments. The result is far greater program benefit, over a more sustainable period of time and a significantly improved return on investment.

Appleton Greene uses standard and bespoke corporate training programs as vessels to transfer business process improvement knowledge into the heart of our clients’ organizations. Each individual program focuses upon the implementation of a specific business process, which enables clients to easily quantify their return on investment. There are hundreds of established Appleton Greene corporate training products now available to clients within customer services, e-business, finance, globalization, human resources, information technology, legal, management, marketing and production. It does not matter whether a client’s employees are located within one office, or an unlimited number of international offices, we can still bring them together to learn and implement specific business processes collectively. Our approach to global localization enables us to provide clients with a truly international service with that all important personal touch. Appleton Greene corporate training programs can be provided virtually or locally and they are all unique in that they individually focus upon a specific business function. All (CLP) programs are implemented over a sustainable period of time, usually between 1-4 years, incorporating 12-48 monthly workshops and professional support is consistently provided during this time by qualified learning providers and where appropriate, by Accredited Consultants.

Executive summary

Ethical Intelligence

Organizational culture is a force as fierce as fire. A controlled fire is a force of creation. It can conquer, calm, and create. An uncontrolled fire is a force of destruction. It can damage, disrupt, and destroy. Organizational culture is an all-consuming force. Controlling it creates an environment within which ethical conduct and organizations flourish. It is the “hidden hand” controlling organizations.

When organizational culture is neglected and uncontrolled, it creates an environment within which the survival of the fittest devours all within its path, including the C-Suite and the board of directors. Enron’s infamous “rank and yank” practice exemplified a “burn-it-down” organizational culture. Here are two additional recent examples of the destructive power of organizational cultural fire.

Credit Suisse. “Your honor, I am sorry for what I have done. My terrible mistake will live with me for the rest of my life.” Kareem Serageldin. “You failed in doing what was right, and for this, I have to punish you.” Judge Hellerstein. This exchange occurred between Kareem Serageldin, former Credit Suisse banker, upon hearing his prison sentence for defrauding the bank of $2.7 billion. Unfortunately, this was not the first, nor the last, ethical lapse involving a member of the Credit Suisse organization.

Since 1986, Credit Suisse has had nearly a dozen public ethical crises resulting in multi-billions of dollars of losses, fines, penalties, and significant reputational destruction. Many organizational members, such as Mr. Serageldin or other loosely associated organizational members, have been imprisoned for various crimes. In 2022, the Chairman and CEO resigned because he ignored the COVID quarantine rules he ordered all other organization members to observe. Finally, in March 2023, Credit Suisse failed and was taken over by UBS.

Wells Fargo. Once upon a time, investors, customers, and others regarded Wells Fargo & Co. as an organizational culture gold standard. Its reputation was spotless, and its profitability and return on investment were nearly unparalleled, earning the bank the highly trusted title. Then, a 2013 Los Angeles Times article about certain alleged fraudulent Wells Fargo sales practices led to a nearly overnight fall from grace, from which the bank has not yet recovered, as the nearby chart shows.

Noted former Wells Fargo investor Warren Buffett once commented, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

Background

The dawning of the 21st century and its cascade of business scandals compelled many to think about doing things differently. The business failures of that time thrust an eight-decade era of rules, regulations, ethics codes, and legislation under the hot lights of public scrutiny. The investing public, employees, suppliers, and other stakeholders were angry and demanded answers, especially from regulators and politicians.

Given the regulatory environment, Enron’s collapse should not have happened. Neither should have HealthSouth, WorldCom, and others. Since the Security and Exchange Commission’s (SEC) founding in 1934, an impressive regulatory regime has evolved to prevent such business failures/scandals and their aftermath. Nonetheless, the carnage happened, especially to those who could least afford it.

The Enron failure, accompanied by Arthur Andersen’s demise, was both dramatic and devastating to a nation still reeling from the 911 disaster and its fallout. The political clamor to “fix the problem” resulted in sweeping legislation that spawned the Sarbanes Oxley Act (SOX) of 2002 and the creation of the Public Company Accounting Oversight Board (PCAOB).

Those two events substantially complicated an already giant regulatory and compliance framework labyrinth. There was great hope that those steps would finally solve the problem of unethical behavior in corporate America.

Now, 20+ years later, there is widespread agreement that SOX and PCAOB have been net positives in holding public accounting firms and their clients accountable for more robust internal controls and improvements in financial reporting.

Yet, during the first ten years after SOX became law, thousands of executives were tried and convicted of the frauds SOX was designed to prevent. And now, we continue seeing business scandals and corporate failures such as Theranos, Nikola, Volkswagen, and others.

During these subsequent 20+ years, many have started asking whether laws, regulations and even lengthy prison sentences work in stemming corporate ethical lapses. Harvey Pitt, former SEC Chief, was once asked that very question by a UK journalist. “Does regulation work?” Pitt’s answer was, “Don’t ask me!”

So, does regulation work?

There is not a yes or no answer to the question. A nuanced answer is that regulation is necessary, but more is needed. Since 1992, however, a parallel initiative to addressing this seemingly intractable problem of organizational ethical lapses, and that initiative is Enterprise Risk Management.

Enterprise Risk Management

Enterprise risk management (ERM) is the culture, capabilities, and practices that organizations integrate with strategy setting and apply when they carry out that strategy to manage risk in creating, preserving, and realizing value. In 1992, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) created and promulgated a framework known as the “Internal Control – Integrated Framework.” The following Framework was intended to help companies, regardless of industry and size, measure the efficacy of their internal controls.

The base of this pyramid model, Control Environment, is organizational culture. The organizational culture is the milieu within which risk assessments, control activities, and monitoring operate. Since the publication of this original model in 1992, COSO has updated and expanded the model three times: in 2004, 2013, and 2017. The DNA view of the current model is as follows:

Throughout the COSO model’s iterations and improvement, organizational culture’s primacy has persisted and is now accompanied by governance. Organizational culture is still the foundation of ERM because organizational governance is a product of and is informed by organizational culture.

Why should you care about this?

The Ethical Culture Imperative

Why is this important? Or why should you care about your organization’s culture? Whether you are a leader, manager, or single contributor, you should prize an ethical culture because such cultures produce more value, reduce enterprise risk, enhance and protect your brand, deliver greater stakeholder engagement, enhance innovation, increase productivity, are more naturally compliant, and are easier to govern.

• Ethical cultures produce more value. During the past several decades, scholars and practitioners have discovered that the single distinguishing characteristic between organizations that positively contribute to society and those that do not is an ethically intelligent (ethical) organizational culture. No matter how it is measured, EVA (economic value added), EPS (earnings per share), cash flow, share price, P/E (price earnings) ratio, return on equity, cost of capital, return on assets, market capitalization, ethical organizational cultures create more value. In a recent 2022 survey of 1,348 North American executives, 92% believed an ethical organizational culture increased firm value.

• Ethical cultures reduce enterprise risk. Every organization faces internal and external risks, and in today’s 24/7/365 volatile, uncertain, complex, and ambiguous business world, risks are everywhere and rising. Whether cyber intrusions, online and offline theft, sexual harassment, organizational wet work and plausible deniability, or aggressive accounting, an ethically intelligent organizational culture is the first and most vital line of defense against such toxic activity. Enterprise risk management experts, practitioners, and scholars alike have experienced and demonstrated that a laser focus on workplace ethics is instrumental in reducing enterprise risk.

• Ethical cultures enhance and protect your brand. The idea that your culture is your brand has existed for a long time. A brand-enhancing example is Southwest Airlines (LUV) when Herb Kelleher was the CEO. During Kelleher’s tenure, LUV had a free-sp