In the latest of our conversations with corporate governance and compliance officers, we talk with Richard Suminski, deputy general counsel and chief ethics and compliance Officer of Tyco Electronics, about the establishment of that company’s ethics and compliance function, following its spin-off from Tyco International in 2007.

Readers can also visit our archive of Q&A interviews.

DETAILS

Suminski

Rich Suminski is vice president, deputy general counsel and chief Ethics and compliance officer of Tyco Electronics Corporation (TE), a $12 billion company that manufactures a diverse range of electronics and electrical systems and employs approximately 70,000 people in over 60 countries. Suminski has supervisory responsibility for the global commercial and compliance legal, real estate and trade compliance functions within TE. He manages a staff of over 40 professionals worldwide.

In addition, Suminski chairs TE’s Compliance Committee, leads the company’s annual enterprise risk assessment process, is counsel to TE’s Board of Directors’ Nominating,

Governance and Governance Committee and is a member of its Financial Disclosure and PAC Committees. He directly supervises all significant domestic and international commercial law litigation and product liability claims and oversees the Ombuds Office, compliance investigations and compliance training programs. Suminski works closely with TE’s senior management team and the Board in providing legal counsel and advice on complex ethics/compliance issues and high-level business issues and transactions.

COMPANY BASICS

Company:

Tyco Electronics

Headquarters:

Schaffhausen, Switzerland

Employees

78,000

Revenue

$10.2 billion

Website:

tycoelectronics.com

Tyco Electronics spun off from the parent company, Tyco International, three years ago. How has your ethics and compliance function evolved over that time?

About a year before becoming a separate company, we started by first taking a look at Tyco International’s Guide of Ethical Conduct as a foundation, and then wrote a guide to make it more specific to Tyco Electronics and our industry. We spent a lot of time doing that, involving focus groups from all around the world. It took a full year to get that input. We now have a Guide of Ethical Conduct that’s very particular to our company and our industry.

After getting the Guide in good shape, we started revising and updating our legal and compliance policies. Tyco Electronics’ history goes back over 50 years, so with all those prior experiences to build off, that put us in a very good position, as far as being situated to frame policies and training programs that were particular to our needs.

About six months ago, we changed the theme of our focus from being a “compliance” department to becoming an ethics and compliance department to emphasize ethics and doing the right thing.

How is the ethics and compliance program structured?

I report to the nominating, governance, and compliance committee, and at every board meeting we discuss what’s going on with the ethics and compliance program, which results in good discussions and feedback. At least once a year I do the same with the audit committee, as well as the full board to talk about enterprise risk management and compliance.

About every six weeks, too, we have a meeting with the compliance committee made up of all senior management: the CEO, the CFO, the general counsel. They ask lots of good questions. So both from a board of directors and senior management level, there is lots of interaction and great feedback.

Talk about your training programs.

Initially, when we became an independent company, to lay the proper foundation, most of the live training was lecture-based: reviewing the company’s policies, discussing our values as stated in our Guide of Ethical Conduct, and things of that nature. The intent of the initial training was to lay a solid foundation for future training. As the ethics and compliance function evolved over time, it’s become more interactive.

How so?

Although we continuously train on about two-dozen topics, every year the ethics and compliance and law departments work together and we hone in on one specific topic. A few years ago, it was anti-bribery; last year it was fair treatment of employees and mutual respect. And this year we focused on conflicts of interest.

The last quarter of this year we’re going to do something completely different: We’re going to assign courses dependent upon job function. For example, if you’re in sales, you’re going to get a course assigned to you called “ethical selling.” If you’re involved in trade compliance, you’re going to get a comprehensive trade compliance course. So we’re digging down deeper to those functional areas that we think could benefit from more detailed training.

At the end of every online training module, employees are asked to do a few closing items. One, they have to take a short quiz before they can move on to reinforce retention. Secondly, they have the opportunity to ask questions and comment on the training, while still fresh in their mind, so if something may not be understandable or a translation is a little off, they can let us know about that. Lastly, if anything needs to be reported, they have the opportunity to immediately tell us about that.

We also do a lot of live training. Annually, on average we do live training with more than 12,000 employees. Having laid a solid foundation for our employees over the last three years, we’re finding that the best training tool is to talk about real-life situations, especially where there is not necessarily a right or wrong answer and having a very candid, open discussion with employees: What should you do? What should you consider? Who should you reach out to? Those have become very lively conversations. It also brings out cultural nuances and allows employees to better understand our company’s global core values.

That’s computer-based and live training. Anything else?

Every quarter we also send out an ethics and compliance newsletter that takes a broader view of these topics, and gives some detailed examples of real-life situations to add more understanding to the company’s policies, Guide of Ethical Conduct, and brings the discussion down to a level where people can understand how each topic applies to their jobs.

We have found with the combination of our live training, the online training, and our ethics newsletter, it’s really taking hold as to getting the right messages across.

What was your biggest challenge? How was it overcome?

One of the challenges of being a multinational corporation, of course, is to be sure that your ethics and compliance program is easily understood by everybody around the world. You have to be sensitive to cultures and customs in other countries, and try not be U.S.-centric. We use focus groups made up of employees from around the world to review training materials and assist in revising policies.

When it comes to our training programs, whether live or online training, those are translated into our eight major languages that we do business with around the world. That goes a long way to better comprehension.

How do you ensure the cross-cultural message stays accurate?

It does take more time, but it is worth it to get it right. To make sure we don’t miss anything, first we send our training materials out to an outside agency to do the translations. But to be sure they don’t miss any of the cultural nuances we internally have employees review the agencies’ translations.

Our audience is vast. We have more than 70,000 employees in many different job functions and backgrounds. On top of that, we operate in about 50 countries where we have employees. So you have to keep the message simple, because of the diversity of the audience. Laying the right foundation is critical. If you do that well other things come more easily.

Final thoughts?

With our ethics and compliance program we have really boiled it down to five main points: mindset; mutual respect; timely reporting; asking questions; and tone setting …

[W]e emphasize timely reporting. If someone cannot resolve an issue with local management or there is a need to report something up, we very much push for and request employees to be sure that when they don’t understand something, or something doesn’t seem right, to report the concern to the Ombudsman’s Office. More times than not, it’s a matter of interpretation or communication.

In addition to that, we tell employees, when there is a gray area where you don’t have all the facts or don’t understand all the issues, you have to ask questions.

Lastly, while we have an excellent tone from the top, we’re pushing it down very consciously to tone in the middle. It’s so critically important that you have the buy-in and the support of middle management, because those are the managers that employees see every day. Employees learn by example. If the middle managers of this company, or any other company, are doing it right every day by their words and deeds, that’s when you truly have a great ethics and compliance program and culture.

Thanks, Rich.

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