1Zurich, 17 October 2019

Welcome to the Swiss Investigation Forum

2

Nic CarringtonPartner, Forensic

Deloitte

3

Haig SimonianModerator

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Programme

13:40 Nic Carrington, Partner, DeloitteHaig Simonian, ModeratorWelcome and Introduction to the Forum

14:00 Andrew Clapham, Commissioner for the Commission of Inquiry SouthSudan, United Nations

14:25 Emma Molvidson, Global Head of Investigations, UBS

14:50 Coffee Break

15:10 Eugene Soltes, Jakurski Family Associate Professor of Business Administration, Harvard Business School

15:50 Neil Barofsky, Partner, Jenner & BlockErin Schrantz, Partner, Jenner & BlockMatthew Cipolla, Partner, Jenner & Block

16:35 Panel, all

17:35 Drinks and Canapés

5

Wifi

PW: PHZEVENT

Join the discussion

Swiss Investigation Forum

#SwissInvestigationForum

#SIF

6

Andrew ClaphamCommissioner for the

Commission of Inquiry South

Sudan

United Nations

7

8

Emma Molvidson

Global Head of

Investigations

UBS

Public

17 October 2019

Effective compliance and good corporate culture – what is the role of

investigations?

Investigation Forum

Emma Molvidson

Global Head of Investigations

Group Governance

Framework / Quality Assurance / Reporting

The criticality of the network Group Investigations is an integral component for effective compliance and good corporate culture

Group Investigations

Investigations and Forensics

Governance

Analytics

Group Security Services

Personnel and event security

Physical Security

GA

Regulatory Affairs

Reg Strategy & Relations

Conduct Risk Financial Crime Risk

Financial Crime Prevention & Conduct Risk

Compliance & Operational Risk Control

Consequential Risk

Control Framework

Operational Risk

Front-to-back risk coverage

Expertise in Regions/Divisions

Governmental Affairs

Advocacy activities / Intelligence contributions.

11

12

4 1 6

2

5 3

10

9 8

7

Group Investigations – who are we?

11. Hong Kong

12. Singapore

APAC

7. Zurich

8. Lausanne

9. Lugano

10. London

EMEA

Educate

Communicate

Investigate

Group Investigations

› Internal Investigations

› eDiscovery Data Analytics

› Criminal Investigations

› Analytical Fraud Detection

› Forensic Investigation

› Cybercrime Intelligence

› Governance, Reporting & Whistleblowing

1. New York

2. Stamford

3. Weehawken

4. Chicago

5. Nashville

6. San Francisco

Americas

Global reach with local specialists to act swiftly, appropriately and consistently across all regions and across multiple areas of expertise

Investigate Investigations are our bedrock – through the investigation lifecycle we focus on outcomes which help build effective system and controls and drive positive firm culture

Investigation and whistleblowing framework with clear roles and responsibilities.

Investigation Phases

Implementation of take-away actions

Mandate to initiate Investigation

Investigation Results Case Closure

Incident

Active Investigation

Initiation & Planning Execution Results

!

Root Cause Analysis

Address misconduct and potential control gaps

Systematic process for identifying root causes of events

Repeated issues and common themes are a sign that root causes have not been properly identified or addressed

1 2 3 › Identify the correct root causes

› Better understanding of why the problem exists

› Establish appropriate and effective corrective measures

› Sustainably prevent similar problems in the future

Communicate Thorough investigations, we provide insights which facilitate meaningful discussions and decisions

Feedback Loop

Lessons Learned

› Throughout the investigation life cycle, data is consumed, enhanced, produced

› Feedback loop with various functions (Business, Technology, Internal Audit, General Counsel, Risk)

› Identify and inform relevant stakeholders on the results of the investigation

› Improve the resilience of the firm by

– identifying action owners

– creating accountability

– remediating gaps, improve corporate culture, processes and enhance controls

› Detach the investigation and adjunct work through a well-defined and reliable handover process

Data

Analysis / Investigation

Culture, Systems and

Controls

Educate Each investigation, whether concerns have merit or not, tells us something about our firm and our people

Thematic Reviews

› Periodically analyze the investigation findings, impacted areas, etc. for patterns of misconduct or other red flags for cultural and compliance weaknesses

› Early risk detection and predictive analysis

Portfolio Reporting

› Central overview of the investigation portfolio as the basis for gaining meaningful insights

› Inform the management and board of directors of the status quo, developments, and insights to initiate change

Look Across Activities

› Early identification of developing risks by sharing information across second and third line functions

› Investigation function is a SME for compliance and culture assessments

› Tone from the Top

› Educate 68,000 employees for “doing the right thing”

› Learn from employee and whistleblower feedback

Speak Up Campaign

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Coffee break

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Eugene Soltes

Professor of Business

Administration

Harvard Business

School

Eugene Soltes

Jakurski Family Associate Professor of Business Administration

Harvard Business School

It is hard to understand why someone who has reached the pinnacle of success would risk all that for more…

-Judge Richard Sullivan

You never really understand a person until you consider things from his point of view…until you climb into his skin and walk around in it

-Atticus Finch, To Kill a Mockingbird

SociologyPsychology

Economics

Criminology

Physical Anthropology

Neuroscience

Possible explanations…

Philosophy

Scott London (KPMG)

At the time this was going on, I just never really thought about the consequences…

I was on 3 charitable boards, 3 community boards… I will probably lose my CPA license

and I can’t practice in front of the SEC.

None of these things were going through my mind at the time this was going on…

Scott London (KPMG)

To the perpetrators, corporate misconduct doesn’t feel harmful

It didn’t damage anybody … it was, in my mind, a very small thing dealing with small dollars…

We Think:

Knowing an action is wrong is

sufficient to stop us

But in Practice…

Feeling that an action is harmful is what “stops” us

Ben Horowitz

Hired new CFO….

“One area where she thought we were less than competitive was our stock option granting process. She reported that her previous company’s practice of setting the stock option price at the low during the month it was granted yielded a far more favorable result for employees than ours.”

Interceding before it’s too late: An example

“It all sounded great: better incentives for employees at no additional cost or risk”

Called friend and counsel…

“I’ve gone over the law six times and there’s no way that this practice is strictly within the bounds of the

law. I’m not sure how [your auditor] justified it, but I recommend against it.”

Two years later, CFO in prison as part of backdating options investigation

“The only thing that kept me out of jail was some good luck … and the right organizational design.”

Codes of Conduct

I, __________________ (print full name), certify that I have read and understood the Code of Conduct, and I agree to it.

In addition, to the best of my knowledge, I affirm that (a) I have not engaged in any conduct that is or could be considered a violation of the Code of Conduct and (b) I am not aware of any associate, officer or board member of the Company engaging in any conduct that is or could be considered a violation of the Code of Conduct.

I affirm that I will promptly report an violations of the Code of Conduct in the future.

Associate Signature: ________________________________

Signature Date: ________________________________

Associate ID: ________________________________

Reporting Rate for Misconduct

42.7%

43.4%

32.6%

39.7%

39.1%

38.5%

31.7%

33.9%

35.0%

45.9%

42.8%

40.8%

39.6%

35.3%

33.2%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Inappropriate Behavior

Harassment

Discrimination

Health and Safety

Data Privacy

Environmental

Business Information

Conflicts of Interest

Misuse of Co. Time/Resources

Stealing Co. Property

Fraud

Improper Sales

Accounting Irregularities

Improper Payments

Insider Trading

HR

Rela

ted

Legal Vio

lations

Mis

use o

f

Corp

ora

te A

ssets

Sale

s a

nd

Fin

ance

Vio

lations

% of employees reporting misconduct they observed, by type

Looking toward the future of compliance…

Opportunity 1: Proactively assess differential risks across organization to target compliance efforts

Opportunity 2: Utilize data to draw more rigorous insights

Opportunity 3: Evaluate impact on behavior to design maximally effective and efficient programs

Manager Conduct Impacts Employee Conduct

Manager with

misconduct

Manager with

no misconduct

Likelihood of a substantiated

employee violation: 8% 52%6.5x

Past Allegations Predict Future Misconduct

All employees with asubstantiated allegations:

1.5%

Employees with

1st substantiated violation

Employees with

1st unsubstantiated allegation

3%

have a later, substantiated violation

5%

have a later, substantiated violation

2x

base rate

3.3x

base rate

Questions

Eugene SoltesHarvard Business School

esoltes@hbs.edu

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Neil Barofsky, Partner

Erin Schrantz, Partner

Matthew Cipolla, Partner

Jenner & Block

Neil Barofsky - Erin Schrantz - Matthew Cipolla

36

Sven ProbstManaging Partner

Deloitte

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Thank you! We are looking forward to see you at the Swiss Investigation Forum in 2020

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