PUBLIC COMPANIES

Corporate Culture Index
- a Leading Indicator
Corporate culture is a profound driver of any business - it determines the company’s ability to execute its strategic vision. Leadership and corporate culture excellence are essential to company performance and organizational well being. The “tone at the top” shapes corporate culture and pervades a company’s internal and external relationships.

The Corporate Culture Index (CCI) is an innovative new tool that measures the integrity of the corporate culture, verifies the tone-at-the-top, and protects shareholders and stskeholders by providing an early warning against corruption, fraud, misconduct or unintended risks. The zEthics corporate culture surveys and reports provide the organization the knowledge and power to validate and continually improve the integrity of the most important part of the internal control system – the people.

The Dodd-Frank Wall Street Reform Act has permanently altered the Corporate-Shareholder relationship. Leaders must take an active role in establishing and maintaining the appropriate culture and attitude for healthy and productive shareholder engagement.

The board must take an active role in working with management to not only ensure the right tone at the top for ethics and compliance, but also to achieve performance goals and objectives aligned with those of long-term shareholders. Providing senior leadership and the board with a valid, independent source of risk intelligence is a leading indicator of economic performance, and allows them to understand what the company does well, and where they can do better.

The zEthics technology platform is a well-designed diagnostic tool that continuously monitors the soft controls that define the corporate culture to:

• Ensure the right tone at the top for ethics and compliance


• Identify characteristics and behavior that drive business returns


• Provide auditors with a valid, independent source of risk intelligence to investigate improprieties and initiate corrective and preventive measures


• Identify and quantify risks, fraud, corruption and misconduct


• Substantiate the truth-value of public filings, proxy disclosures and earnings releases to shareholders and the public


• Provide a qualified pool of strong candidates for succession planning


• Provide an innovative new technology platform to communicate with long-term shareholders

Corporate Culture Index - Dashboard:
The zEthics technology platform provides a structured process for employees to anonymously disclose comprehensive and timely information about the impact on soft controls that are essential to manage the corporate culture, and presents the information in a simple dashboard format. In addition, the zEthics technology platform provides the organization an opportunity to take corrective actions and implement preventative measures to remedy non-conformances with the company’s mission, goals, strategies, and objectives.

VALUE PROPOSITION:

1. Minimize Resource Requirements

• Internal Audit Planning and Scoping
• Compliance with Dodd-Frank Act implementation regulations
• Enterprise Risk Management (ERM) / Governance, Risk, & Compliance (GRC)
• Business Process Efficiency
• Whistleblower incident management
• Foreign Corrupt Practices Act (FCPA)
• Training – code of conduct, code of ethics
• Anti-corruption

2. Cost Reductions E&O, D&O, EPL and Professional Liability Insurance
The Corporate Culture Index has the potential to significantly reduce the premiums for E&O, D&O, EPL and Professional Liability Insurance.

Legal Fees & Expenses

• Minimize possible increase in employee discrimination lawsuits as a result of Whistleblower Protections within the Dodd-Frank Act
• Minimize possible increase in regulator sanctions as a result of Whistleblower Protections within the Dodd-Frank Act, and prevent malicious whistleblowing
• Minimize possible increase in shareholder lawsuits as a result of Proxy Access and Executive Compensation Disclosures within the Dodd-Frank Act

External Auditing Fees
Utilizing the zEthics technology platform to evaluate the soft controls that define the corporate culture, and disclosing the information to the board of directors in the Corporate Culture Index dashboard creates significant value for the Audit Committee of the Board of Directors:

1. Reduction in external audit fees
2. Compliance with laws and regulations
3. Identification, analysis, determination, containment and disclosure of "soft" and "concrete" risks
4. Detection/prevention of corruption, fraud, management mischief and unintended risks

Consulting Fees
Utilizing the zEthics technology platform to evaluate the soft controls that define the corporate culture, and disclosing the information to the board of directors in the Corporate Culture Index dashboard creates significant value for the Compensation Committee of the Board of Directors:

1. Reduction in external consulting fees
2. Elimination of hazardous pay practices
3. Alignment of pay practices with the long-term health of the Company
4. Shareholder buy-in and approval of executive compensation arrangements

3. Compliance with Dodd-Frank Act implementation regulations
a. Proxy Access
The corporate culture index substantiates the truth-value of disclosures, providing shareholders a level of confidence in the financial disclosures that are audited, and earnings releases that are not audited. Independent monitoring of the soft controls makes it possible to readily identify inappropriate risks that can lead to material financial loss.

b. Improved Board-Shareholder Communication
The Board of Directors has a dual role: to serve the purpose of the company, and to serve the purpose of shareholders. Proxy access requires boards to provide transparent, relevant information to shareholders and avoid boilerplate.

4. Enterprise Risk Management / Governance, Risk and Compliance
zEthics.com compliments ERM and GRC program structures by bringing a new relevant data point on the most important aspect of internal control – the people empowered with the authority and responsibility to manage risk in accomplishment of the company mission.

5. Prevent Savings Erosion
To sustain business process efficiencies achieved through restructuring, the corporate culture index will identify and quantify those behaviors and characteristics that drive business performance. Providing senior leadership and the board with a valid, independent source of risk intelligence is a leading indicator of economic performance, and allows them to understand what the company is doing well, and where they can do better.

6. Employee Retention
It’s easier to attract and retain key employees with a corporate culture that is recognized for honesty, loyalty, mutual trust and respect.

7. Credit Rating
Adopting a corporate culture index addresses current shortcomings in the marketplace for shareholder and stakeholder due diligence, including credit rating agencies that evaluate a company's creditworthiness, as credit ratings have proven to be unreliable and impossible to measure.