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Promoting Ethical Business PrincipleUla UbaniChief Ethics OfficerMarch 3, 2015

Values, Conduct & EthicsConnecting the Dots

Ula UbaniChief Ethics Officer BMO Financial Group 

SCCE Compliance & Ethics Institute

October, 2015

BMO Financial Group - Who Are We?

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• More than 46,000 employees

• Total assets of $589 billion• Broad range of retail

banking, wealth management & investment banking products and solutions

• 1,549 branches and 4,338 ABMs in Canada and the US

• Over 75% of revenue from retail businesses

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BMO’s Values

DiversityLearn from difference

ResponsibilityMake tomorrow

better

IntegrityDo what’s right

EmpathyPut others first

What’s Going On?

• Rapid change in broader environment has pushed discussions of ethics and conduct forward.

• Shift from strictly rules based to an increased focus on culture and behavior.• Need for flexibility when operating in a global business community – boundaries

are blurred.• Stakeholder expectations on how companies (and their employees) are

supposed to behave.• Regulatory pressure and scrutiny in response to stakeholder expectations and

events in the marketplace.• Most companies have strong internal controls, codes of conduct and regular

ethics training.

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What’s Culture and Why Does it Matter?

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• Culture is conveyed through behaviour and significantly influences trust, internally and externally.

• Regulators in different jurisdictions are publicly referencing ethical culture -policies and procedures are not enough if people will willingly turn a blind eye to what is right.

• There are no specific guidelines but there is agreement that culture is supported not only by tone from the top but leadership in the middle.

• Banks (and other companies) are approaching this in different ways but those that do it well place increased emphasis on:

• doing what’s right,• the importance of ethical decision making, • the need to raise concerns quickly, and • consistent disciplinary action.

What does this mean for BMO?

We have the foundational elements of an ethical culture in place• Focus on Corporate Governance, Enterprise Risk Management and

Compliance combined with well defined and well understood policies, procedures and controls in place.

Code of conduct aligned with best practices• Supported by the CEO & leadership and approved by the Board of Directors • Rooted in BMO’s values of : Integrity, Empathy, Diversity & Responsibility• Publically available• Regular mandatory online training• Annual acknowledgement including declarations related to conflicts of

interest

All good, but is it enough? 6

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It Comes Down to Values

• People’s behavior is driven by their values.• To support ethical culture, need to make sure that our employees understand

BMO’s values, what they mean and how they relate to their work regardless of the role.

• Examined our values to make sure they were supportive of our brand and reflective of who we are and revised them using a co-creation process with employees.

• To make the values real to employees, created a behavioral model to guide decision making.

• Coordinated collaboration across the bank touching all systems and processes.

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Where does the Ethics Office Fit?

Set the standard by developing principles for ethical behavior:• Code of Conduct • Code related training

o Annual (content)o ‘Out of Cycle’ (content and delivery)

• Provide guidance on aligning business activities with the Code• Provide interpretation of the Code• Re-orient thinking to shift perceptions and increase understanding – “make it

real”

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Shifting Perspective

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• Educate and raise the profile of ethics awareness and decision making – ‘doing the right thing’.

• General tendency to define ethics as illegal / really bad stuff; this narrow definition doesn’t address behaviour that is legal but not right (the grey areas).

• Grey areas can be managed by supporting a culture where personal character and values drive decision making.

• Need to encourage employees and leaders to shift their perspective and think of ethics and conduct in this broader sense.

Tactically Speaking … Speak Up!

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• Let’s talk about ethics – frame it in how to make quality decisions.• Give examples of when you were faced with difficult choices.• As a leader, give your team the permission to speak up. • Employees need to believe that they can raise concerns or ask questions

without fear of reprisal.

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Tactically Speaking … Apply Consistent Discipline & Use it as a Learning Tool

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• Every action contrary to your Code of Conduct must bear a consequence.

• Discipline may vary and depend on several factors but it’s application should be consistent.

• Doing so will give employees faith in the system and support the concept of speaking up and raising concerns.

• Speak candidly about ethical situations.• Let others know what happens to those who choose to behave

unethically to reinforce that you walk the talk & act as a deterrent for others.

Lessons Learned

• Influencing culture is an iterative process.• Expectations have to be clearly embedded in all aspects of the employee

experience.• Customize messaging for different parts of the organization. • The top will differ.• The middle needs support.• Continue to provide support and tools for managers and leaders to effectively

deliver and demonstrate the message to their teams on an everyday basis. • Encourage speaking up and ongoing dialogue.• You really can’t do it alone.

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Questions?