Why was CREATe.org founded? How were CREATe Leading Practices developed? How do companies work with CREATe? This blog post provides an at-a-glance perspective of CREATe.org and CREATe Leading Practices.
CREATe shares leading practices on how to best prevent corruption, protect intellectual property, trade secrets and confidential information.
How CREATe Leading Practices Came to Be
The idea behind CREATe was to make more broadly available the leading practices for preventing corruption and protecting intellectual property. Many global companies have robust systems in place, however third parties may not have the knowledge or resources to effectively address these issues. CREATe’s goal is to make these leading practices achievable for all companies.
To gather this insight into the leading practices, CREATe facilitated discussions with companies of different sizes from varying industries, experts from Stanford Business School and MIT, government officials, and other business organizations. CREATe was interested in learning how companies work with their supply chains and other third parties, and how they could impact change. CREATe also aligned the approach with globally-recognized guidance. For example ‘CREATe Leading Practices for Anti-Corruption’ aligns with the Foreign Corrupt Practices Act (FCPA) Resource guide, the U.S. Sentencing Guidelines, guidance on “adequate procedures” from the UK Ministry of Justice, the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance, and similar guidance.
CREATe Leading Practices: Measure and Improve
CREATe’s goal is to help a company measure how advanced its compliance programs are based on objective criteria; and then help the company improve the program based on practices that have proven successful in the past. To do this, CREATe developed an assessment methodology and technology platform that allows companies to first take an online questionnaire on the maturity of business processes in the categories of an effective program. Next is an expert evaluation using similar questions and the review of documentation, followed by an improvement plan.
The CREATe Leading Practices Process
The first step of the CREATe Leading Practices service is an online self-assessment. The self-assessment has questions grouped into the different business process categories of an effective program. For anti-corruption and IP protection programs, this includes:
- Policies, procedures, and records;
- A cross-functional team with appropriate seniority, independence and resources;
- A risk assessment;
- Due diligence of and interactions with third parties;
- Training for both employees and third parties;
- Monitoring to ensure policies and procedures are being followed; and
- Corrective actions and improvements that address the root-cause of an issue
Another category applicable to IP and information security is: physical and network security and confidentiality management.
Who is Involved
The questions are fairly detailed, and as such the right people must come together to answer them because the questions require an understanding of what the company’s policies, procedures, and controls are and how the company’s employment and third party contracts are drafted and enforced. Based on the answers, the company gets a rating of one to five in each process area based on the company’s level of maturity in each area.
Next is an independent evaluation of the company program. In a collaborative discussion, a CREATe expert discusses similar questions as to what was asked in the self-assessment with the company, probing for more insights and reviewing any relevant documentation.
The review of documentation can include the company handbook, policies, risk assessment and due diligence protocols, training materials, monitoring and investigation protocols, examples of corrective action taken and employment and third-party contracts. Essentially CREATe is looking at all the ways the company documents and then communicates the key aspects of its internal controls to its employees and third parties. Next, the CREATe provides a rating to the company on both the self-assessment and independent evaluation.
CREATe provides a report that summarizes observations for each of the process areas as well as recommendations on how the company can most effectively increase its level of maturity in each area. This report is finalized and reviewed by the company. After delivering the report, CREATe can conduct follow-up calls to go through the findings and to help the company on a path to building a specific plan to improve and mature its practices.
Companies also have access to a guide providing specific suggestions on how a company can move from one level of maturity to the next and specific tools and model resources to mature. CREATe recommends that a company use this guidance to make incremental improvements in its program over time. Then, the company can come back and perform the assessment again to see how successful its efforts have been and find ways to improve the program even further. It is a continual improvement process. As an organization grows, changes, and enters new markets, it has new risks that need to be managed, so it needs to evolve its program over time.
Types of Companies Working with CREATe
CREATe works with companies in a variety of ways. Some companies are interested in assessing the robustness of business processes within the company or among specific work groups, subsidiaries or satellite offices. Other companies want CREATe to work with suppliers or third parties to be sure that effective programs are in place. CREATe also works with the portfolio companies of private equity firms to ensure that these growing companies are able to mitigate risks and position to scale and successfully transition to an IPO, acquisition or further growth. CREATe also works with mid-market companies lacking the business processes for the protection of confidential information and anti-corruption.
CREATe works with companies around the world and the CREATe Leading Practices services are available in a variety of languages including English, Chinese, Japanese, Portuguese and Spanish.