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Marquee group of companies partner with LRN to develop integrated ethics and compliance management platform

Fortune 100 Companies Collaborate to Develop a Comprehensive Platform that Meets Management, Regulatory & Corporate Governance Needs

LOS ANGELES, CA (February 10, 2004) -- A group of leading Fortune 100 companies and LRN today announced a joint program named GEMS (Governance and Ethics Management System™), a platform designed to reinforce high standards of ethical conduct while complying with management, regulatory, and governance requirements.

Los Angeles-based LRN, a leading provider of ethics, corporate governance, and legal compliance management and education solutions, began spearheading the initiative with senior executives from a group of marquee Fortune 100 companies in mid-2003 and enlisted them as charter members. Together, they have been developing an integrated platform to help corporations better meet management, regulatory, and corporate governance requirements.

Collaboration among the charter members and consideration of their combined needs is helping to ensure that the system addresses the diverse requirements of companies worldwide. The GEMS platform is planned for rollout beginning Q2 2004.

GEMS will incorporate best practices and benchmark existing processes to offer a comprehensive management system for corporate governance and compliance. The platform will be configurable to adapt to company-specific requirements and will reinforce and address compliance responsibilities from existing and emerging regulatory requirements, such as the Sarbanes-Oxley Act of 2002. GEMS will provide a suite of capabilities for use by management, employees, and board members.

The following key capabilities of the GEMS platform will enable companies to provide more effective interaction with employees on ethics and compliance matters, improve managerial oversight, and optimize results.

More Effective Employee Interaction

  • Global Electronic Helpline: Complements and extends traditional telephonic hotlines to provide an anonymous, two-way electronic communication channel (§ 301 Sarbanes Oxley), enabling employees to raise, and management to respond to, issues, inquiries and allegations – at anytime and from any location.
  • Certification / Attestation: Provides a configurable assessment support and certification capability to help evaluate and reinforce compliance with corporate policies, processes and regulatory requirements (§ 302 and § 404 Sarbanes Oxley).
  • Registry: Enables employee-initiated logging of potential non-compliance issues (e.g., conflicts of interest, questionable payments, inappropriate gifts and entertainment ) on a daily basis.
    Education and Communication: Allows tailoring of employee training and feedback to address both current and emerging legal, compliance or ethics issues company-wide through the LRN Legal Compliance and Ethics Center (LCEC).


Improved Managerial Oversight

  • Case management: Provides a common tool for use company-wide to consistently classify, monitor, and report the status of all relevant ethics and compliance matters - from initial notification through resolution - while enabling centralized management and oversight (§ 409 Sarbanes Oxley).
  • Dashboard: Provides a real-time, comprehensive overview of the most relevant compliance metrics, on both a snapshot and trend basis, and allows “drill down” into specific areas of concern.

Optimized Outcomes

  • Benchmarking: Allows intra-company comparison along key governance and compliance metrics to inform risk areas and opportunities for best practice transfer.
  • Survey: Solicits, analyzes and reports on overall effectiveness and impact of company ethics and compliance programs. Can be used to systematically monitor a company’s ethical health.
  • Predictive Modeling: Employs statistical tools to more scientifically identify high-risk areas for compliance and/or ethical breaches and opportunities to accelerate the adoption of proven best practices.

“The market for compliance and regulatory management systems has become a maze of confusion and clutter that is not fully meeting the needs of business,” said Dov Seidman, chairman and CEO of LRN. “The problem is that too many piecemeal offerings have been thrust upon business and not developed in partnership with business. The GEMS initiative has brought together leading companies and allowed them to help design the solution, not just purchase it.”

The GEMS initiative mirrors a format used by LRN to create its Legal Compliance and Ethics Center (LCEC) in 1999. LCEC became the market leader in the critical areas of legal, ethics and compliance education and management. In a collaborative effort similar to GEMS, a dedicated group of charter member companies jointly invested to create LCEC. Today, LRN lists more than 100 Fortune 1000 firms as LCEC customers with more than one million employees collectively worldwide. The online courses are interactive and entertaining and are designed to enhance ethically aware corporate cultures.

“LCEC succeeded because of the group of companies that came together as a community to create a solution that specifically met their company needs,” said Seidman. “We are replicating that approach with the GEMS initiative to collectively meet the needs of our complex and challenging times.”

Charter members and LRN are encouraging other leading corporations to join them in organizing a corporate community with shared goals and solutions.

GEMS is expected to begin operation for charter members in late Q2 2004 and commercially by Q4 2004.

 
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Aegon
Aleris International
Altria
Anadarko Petroleum
Aon Corporation
Assurant
BMC Software
Canon USA
CBS Corporation
Churchill Downs
CIT Group
El Paso Corporation
Estee Lauder Companies
InBev
ITT Corporation
Johnson Controls
Loews Corporation
Merck
NEC Electronics America, Inc.
Owens Corning Sales
Pfizer
Red Hat, Inc.
Rolls-Royce
Tesoro Corporation
The J.M. Smucker Company
Toll Brothers, Inc.
Toshiba America
   Business Solutions
Trump Entertainment Resorts
Unilever Plc
Viacom
Warner Music Group
Winn-Dixie Stores, Inc.

 
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Encouraging professional business ethics starts at the top with an organization's code of conduct, a set of guidelines that describe the proper practices for an organization. In most cases, an organization's code of conduct states principles that govern the organization's interactions with employees, customers, business partners, government, and outlines global business ethics.

LRN helps organizations build their code of ethics and to infuse it at every level of the company through diversity education, ethics courses and sexual harassment training. LRN's ethics and compliance training programs promote a principled working environment that increases productivity company-wide. Additionally, our ethics training solutions reduce your compliance risk through the power of education and communication.

LRN has inspired ethical leadership in business since 1993. Our expertise in the areas of corporate ethics training, workplace diversity training, and harassment training have helped companies worldwide create a respectful corporate culture.