EXECUTIVE WORKSHOP

THE BOARD’S ROLE IN ENSURING AN ETHICALLY-SOUND CREDIT UNION

CANADIAN CONFERENCE FOR CREDIT UNION EXECUTIVES

DAVID NITKINETHICSCAN CANADA

MAY 2003

AGENDA

Dilemmas… an ethics quizThe language of ethicsStakeholder and public expectationsEthics guidanceEthics training and reinforcementA check list

ETHICS QUIZ

The customer or member is always right

Ethics is about keeping everyone happy

The first obligation is survival

Ethics doesn’t always pay

ETHICSCAN CANADA

Original Corporate Responsibility Research: reports, database

Ethics Consulting: codes, audits

Public Education: books, journals, courses, guides

PUBLIC EXPECTATIONS

Yearning for confidence, trust in institutionsCrisis downsides

• Shareholder outrage; Lost business• Lawsuits; Prison terms

Increased demand for more business-like, responsible conduct– but not perfection

Return to older verities• Fairness; Honesty; Good Governance

THE LANGUAGE OF ETHICS

VALUES

MORALITY

LAW

ETHICS

STAKEHOLDER EXPECTATIONS

Across OECD countries, but especially in Canada: Companies do the right thing

Devote selves to progressive staff policies, and community engagement, more than quarterly bottom line

Consumers, investors and regulators want to reward the good, avoid the rest, and punish the irresponsible

BOARD DIRECTOR’S ROLE (1)

Set expectations in Ethics TriangleAsk for independent triple bottom line

reportWalk the talk– and be seen to be doing soRequire consistent application in areas of

• Executive performance contracts• Partnerships• Strategic alliances

BOARD DIRECTOR’S ROLE (2)

International Standards

Best of Breed

Credit Union: Visions, Values

BOARD DIRECTOR’S ROLE (3)

Mandate report on SEE Risk Analysis

(Social, Environmental and Ethical)Benchmark performanceAdopt latest governance practicesEvaluate performance of Board

Individually; CollectivelyApply Int. Principles of Co-operation

ETHICS GUIDANCE

Review, Update Code of Ethics• Endorsements; Confidential information• Gift giving; Loans criteria

Performance feedback from• Staff; Members; Regulators• Ex-members; Host communities• Opinion leaders; Press

360 degree performance appraisals

ETHICS TRAINING

Explore current good governance ideas• Integrity Test for staff• Professional Director liability training

Support proactive public and member complaints mechanisms

Reinforce code with training• New hires; Retraining• Sign-off on code of practice

ETHICS REINFORCEMENT

Recognize and reward exemplary behaviour

Ensure system is in place to screen suppliers, partners, contractors

Link social and environmental objectives to performance contracts

Diversity in composition Board

CHECKLIST

New wave code of practiceBenchmark SEE RiskValues and ethics trainingEmpower staff in application

of leadershipDirector education, assessmentReward walking the talkTriple bottom line audit