DO the RIGHT THING What Happened to Integrity in the Workplace? for Many Companies, It Has Seemingly Been Lost in the Mix and Mire of Greed Or Pressure to Perform

THE TICKER

DO THE RIGHT THING What happened to integrity in the workplace? For many companies, it has seemingly been lost in the mix and mire of greed or pressure to perform. In 2015, scandals rocked Volkswagen and Toshiba. Last year, there MARK/ISTOCK DANE BY ILLUSTRATION was Wells Fargo and Theranos, just to name 2. Observed misconduct: This is an indicator a few. It seems as if no industry or country is of whether or not employees follow the rules exempt. and live out the company’s core values. According to the 2016 Global Business Ethics 3. The reporting of observed misconduct: Silence around Survey produced by the Ethics & Compliance Silence around observed misconduct is an observed Initiative (ECI), a company’s risk of an ethical indicator that wrongdoing will continue and misconduct breakdown correlates to how integrity ranks potentially worsen. in the corporate culture. 4. Retaliation against reporters (including is an The survey, which included responses verbal harassment, demotions, undesirable indicator that from 1,000 employees in each of the reported assignments or even violence): Perceived wrongdoing countries, highlighted four key metrics that retaliation will erode trust and often deters “provide insight into the ethics environment employees from reporting misconduct, which will continue by highlighting the risks that emerge from in turn allows bad behavior to broaden. and potentially lapses of workplace integrity”: So which countries have the worst worsen. 1. The pressure to compromise integrity track record, according to organizational standards: This is an employees working in those countries? Here important warning sign of future workplace is how several stack up against each of the misconduct. ECI’s metrics.

Percentage of Employees Percentage of Employees Percentage of Employees Percentage of Reporting Who Have Felt Pressure to Who Have Observed Who Have Reported Employees Who Have Compromise Standards Misconduct Misconduct They Observed Experienced Retaliation Brazil 47% Russia 45% India 82% India 74% India 40% Brazil 43% United States 76% United Kingdom 63% Russia 33% India 40% United Kingdom 71% United States 53% France 30% China 34% Brazil 64% Germany 50% Italy 24% Italy 34% Mexico 63% Spain 43% Germany 22% France 33% Japan 61% Brazil 37% South Korea 22% Mexico 33% Italy 59% South Korea 36% United Kingdom 22% United States 30% France 53% Italy 35% United States 22% United Kingdom 29% China 50% Japan 34% China 20% South Korea 28% Germany 50% Russia 34% Japan 15% Germany 26% Spain 46% France 33% Mexico 13% Spain 21% South Korea 41% Mexico 31% Spain 10% Japan 15% Russia 37% China 29%

6 INSIGNIAM QUARTERLY | Spring 2017

INSIGNIAM QUARTERLY COPYRIGHT © INSIGNIAM HOLDING LLC. ALL RIGHTS RESERVED. SPRING 2017 CONFIDENTIAL AND PROPRIETARY. MAY NOT BE REPRODUCED IN ANY FORM, BY ELECTRONIC OR PRINT OR ANY OTHER MEANS, WITHOUT THE EXPRESS WRITTEN PERMISSION OF INSIGNIAM. VISIT WWW.INSIGNIAM.COM FOR CONTACTS. ON TOP OF THE WORLD The best CEOs in the 20.2 percent annual RANK CEO COMPANY INDUSTRY COUNTRY world focus on the return. The CEOs 1 Lars Rebien Sørensen Novo Nordisk Health Care Denmark long game and they who made the cut 2 Martin Sorrell WPP Consumer Services United Kingdom stick around, according undoubtedly face what 3 Pablo Isla Inditex Retail Spain to Harvard Business HBR calls “the lure of 4 Herbert Hainer* Adidas Consumer Goods Germany Review (HBR). short-termism.” Their 5 Roberto Egydio Setubal Itaú Unibanco Financial Services Brazil On average, the 100 ability to nevertheless executives on HBR’s deliver strong multiyear 6 Jen-Hsun Huang Nvidia Information Technology United States best-performing CEOs results is what puts 7 Bernard Arnault LVMH Consumer Goods France list have been with their them ahead of the pack. 8 Elmar Degenhart Continental Automobile Germany companies for 17 years The top 10 CEOs of 9 Benoît Potier Air Liquide Materials France and have generated a 2016 are: 10 Jacques Aschenbroich Valeo Automobile France *Herbert Hainer stepped down in August 2016. SAMSUNG SEEKS REDEMPTION Last year was, for all intents and purposes, a disaster for South Korea-based Samsung. In August, several of the company’s popular Galaxy Note 7 smartphones started to spontaneously combust. After diagnosing the problem as a battery malfunction and switching vendors, Samsung recalled 2.5 million phones worldwide, exchanging about 60 percent in South Korea and the United States with replacement phones. Soon, however, reports began to surface that the replacement phones were also A Samsung Galaxy Note 7 ad in becoming too hot to hold or catching fire, Bangkok, Thailand and Samsung, which had approximately $170

PHOTO WACHIWIT BY /ISTOCK billion in revenue in 2015, was forced to kill the Galaxy Note 7 line entirely. The cost of company announced plans to equip its Galaxy the recall will total $5.3 billion through the S8 smartphones with a Siri-like voice-enabled first quarter of 2017, the company reported. digital assistant called Viv. The new push is “Samsung is To make matters worse, in November mostly possible due to the company’s recent setting its sights Samsung recalled nearly 3 million of its acquisition of Viv Labs, the startup company on becoming a top-loading washing machines after it was formed by the creators of Siri. According to discovered that “vibrations during the spin the Daily Express, Viv takes Siri to the next major player in cycle could cause parts to fail or separate, level by being contextually aware and having software and causing injuries or damaging property,” the ability to answer follow-up questions. services, and according to Consumer Reports. The same “Samsung is setting its sights on becoming month, South Korea’s government raided a major player in software and services, specifically AI.” Samsung headquarters as part of an ongoing and specifically AI,” said Viv Labs CEO —Dag Kittlaus, CEO, corruption probe of the country’s president. Dag Kittlaus. The company has “installed Viv Labs What might revive the beleaguered a new cadre of senior [software-]savvy company’s fortunes? New and improved management stretching all the way to the smartphones, maybe. In November, the top with a mission.”

quarterly.insigniam.com | INSIGNIAM QUARTERLY 7