Transcript

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Hey, I can hello. I hope everything is well and the pleasure and honor to be in your podcast.

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Yeah, look, I'm how would I describe myself? I'm a compliance risk and compliance professional and hopefully also a leader. In the meantime and my leadership journey are working now over 20 years in the battlefield field of ethics, risk and compliance, starting as a lawyer, then 18 years at Siemens, also have been the chief compliance officer at Siemens and then 20 years ago are the vaulters of the biggest pharmaceutical companies in the world as a member of the executive committee and the Chief Ethics and compliance officer.

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But maybe even more important, I'm a husband and a father of three grown up kids. Now, in the meantime, German, Spanish family and family is always the first priority, of course. Absolutely, we remember what really matters to us and what are the real value is we should protect. Yeah. Yeah, look, I mean, first of all, I have to admit, I'm not a digital native, so I am a loner in this whole and in the years of my my professional career, interestingly enough, I mean, as a as a younger lawyer, the first earthling trek back to technology field of of of three rules laws was in the early 2000s, you know, when we implemented at Siemens the Sarbanes-Oxley framework.

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And I was a member of the task force there as a lawyer. And this was the first I mean, really link to which systems, I.T. systems can we use? What about data quality data analytics? How should this be implemented into the company I.T. system, especially for control of funds? This was the first the first connect, I would say, in the early 2000s. That's new for me, I mean, I must admit, as I mean, I'm not very much, of course, involved in these discussions, as you can imagine, but for me, I must admit it bluntly, it came up in the last last couple of years.

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So it's a broader understanding. So how I would understanding, but you correct me if I'm wrong, would be putting the past. But I have to offer in the context of compliance and with and specifically the next step also involving the ethical and cultural dimension.

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But would you tell me if I'm completely on the wrong way here?

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Yeah. Of course. Bruce. Absolutely, it's an evolution, and I fully agree it started with FinTech and is where we where we know it, but as the whole I mean, whole system systems involving the regulatory system is evolving on the public side. And then also on the private side, I mean, again, I mean, you and covid-19 is a no brainer and the public side has to accelerate that digital journey on the regulatory side. I mean, just one example.

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The pharmaceutical industry during lock times, authorities can't do inspections on manufacturing sites or a pharmaceutical company. So just imagine the public inspection has to be done to fulfill the regulatory requirements. That's a completely new way of doing things.

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Yeah, you're absolutely right, and we are applying this again, strictly, of course, in the rules of data privacy are the legal rules and we can discuss the ethical challenges in a second. But I just imagine a market like China where we have a lot of interactions, transactions, public sector education programs, which are important in the pharmaceutical world for the peer to peer education for doctors. But of course, you have to document them the right way.

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And we also using photos, as you said, as an evidence for this. And we can see that you can also try to fake the photos and to fake meetings and try to stop a fraud scheme. And that's a very interesting topic, especially now. And the question how you kind of develop your monitoring, your audit skills and functions to keep up with this? That's that's top of our minds, I would say. Yeah. You know, I think it's only going to need to be honest and I don't want to comment on this on this learning journey as.

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The ideal situation for us with the record companies is that they have to see both. First of all, they keep to the start up kind of attitude to think outside the box, because this is what we need as established companies, someone with things outside the box and test the external perspective, on the other hand. The second point, I can really understand our context in which we are working from a technolog technology landscape, landscape point of view. We often see companies approaching us and they want to sell us some wonderful system for ethics, risk and compliance, but they just have no idea about how it landscape of the context we are working.

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And then, you know, it does not simply fit together because we can only.

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And given the situation of our landscape and our technology roadmap, and if this is not common understanding, the learning, a child learning it simply makes makes no sense. We can't buy an isolated solution which is not fitting to our system, but keep the startup mindset when it comes to innovation. All of the. Yeah. Absolutely, the listening. I mean, we all listened, listening enough also lead leaders sometimes, so that's an important topic. And and listening is very important because, look, we are big companies.

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We are hilariously complex. And you have to understand is that. You know, in the sandbox, exercise gets increasing traction, I would say, in companies and also on international level. I'm also engaged a business that always KDDI as a as a member of the executive board that we are just doing as we speak and sandbox exercise together with you always to be on data privacy and data and digital. And we also bolster our chief data privacy officer. It's also part of this exercise.

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And we're also, to a certain extent, trying to sandbox approach in companies to joint efforts. And there are platforms. I want to give you one example where we made a request for a public private partnership. We after the P 20 process at the moment, Saudi Arabia, that's the mirror of the G20 process. I'm of the co-chairs for the Compliance and Security Task Force. And one of our big recommendations is to use emerging technology in the fight against corruption and to have a public private partnership, a joint processes, and, for example, to develop a global value chain passport, digital passport for companies to have beneficial ownership, transparency across the globe.

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If you come to supply chain to fight corruption. So we made a really a really a pleasure doing the Patriot Act leaders to stop this kind of public private partnership in the sandbox area. And we need to direct the companies. So this. Yeah, I would say we are in the journey from just putting data together, structured data together with this, as you know, as an expert, this structured data before you start analyzing the companies have put together a huge amount of data.

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And the first focus in the last five years, I would say, was more on the forensic side. We are now seeing the big benefit to go to using the data for reporting mechanisms and for predictive analytics. That's the big thing. I believe we are not there yet. Definitely not. But the one thing is detection and the one thing is predictable. And and don't underestimate us. The huge companies. We are looking for assurance models. And one important topic for students is how do you report real time data to the government governing bodies like the executive committee thought?

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And this is exactly the journey we are. And I'm just putting together a big data and using them for detection to come to reporting mechanisms and starting about predictive analytics, which is early into early days on reporting. I would say we are we are much better than them than five years ago. I have a global dashboard I can use where I get data of from the whole organization. I didn't have to say. Both because we are and if you raise a topic, the pharmaceutical industry, we are one of the regulated industries which have to report.

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I mean, we have to report and the various laws around the globe about our transfer of value. What you pay, for example, to health care practitioners for conferences, for speaker programs, for peer to peer education, being part of our clinical trials and so on and so forth. And this is external reporting, transparency laws, but also the internal reporting for our insurance needs. Yes. And it's. Yeah, I mean, this is a big clash, I would say, of the.

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Potential we see and witness maybe already working, especially if you see what's possible on the covid-19 circumstances now. And so the opportunities and also the risks. I mean, if you think about. The data privacy concept we have. Is this the future of really individual consent, is this still possible and is fast changing world, or do we need a different approach, especially if we come to two data which benefits research and development in health patient data, which is a big, big, of course, topic.

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Patient data has to be protected and used only for specific purposes. But it's it's not the marketing. It's for research and development. So what kind of consent regime will find in these states and ethical dilemmas? How we are we use rhetoric and for data analytics and data mining. I mean, there are companies out of nowhere for high profile or highly criticized sometimes, but also highly effective if it comes to bring data sources together. So I believe just this ethical questions, data privacy questions, they will they will increase.

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And we are working on this also. Absolutely. Absolutely. Yeah, I would say the first trend is getting out of silos if it comes to data and digital, a set of trends. The first trend, I would say, is the need for the first time that I really see this in practice. A trend is working across all stakeholder groups and ethics, risk and compliance, compliance and jointly defined key metrics which are needed normally, you know, and to past the functions in the silos used the data in their silos.

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But the first trend is this kind of holistic across different functions, but working on data and digital. And the second one is an increased use of of analytics. So data analytics not only to put data to gather room for nice dashboards and get data visualized and hopefully use a friendly way. But the analytics which.

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So do you. So, look, this is the trend, this is the red flag if you have to watch out and this is, of course, linked to this, just use a centrist, centrist, friendly movement of the second trend we we we need to have.

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And then the third one is broad.

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What we see in the company data and digital is one of our key strategic priorities at Novartis because we see this as a third point as a cultural trend. And it's not only a.

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Technology and User-friendliness, it's the question, the cultural trend with digitalisation for upscaling, including myself, are the associates to be able to this and to drive this and to understand this on a day to day basis.

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So, again, it's it's a three things is working across silos. Going to an Olympics, user friendly and third one culturally empower the organization to make use of these other three things, I see that at the moment. The. The cultural elements, maybe the oneness. I mean, the millennials we have in the companies of in the company, they are dangerous and they do it as set as digital natives, you don't have to push them. They're a cultural topic.

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Is more on the topic you raised that we discussed a minute ago about where the limits, the ethics, what should we not do? We are the red lines, which is for a pharmaceutical company which deals with humans, of course, of of of great importance. But the culture in the company is also to get the year out of the others who are not digital natives, that they really lose the fear to work with data and digital to embrace this.

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Also give you an example on manufacturing sites and elsewhere. So people are not used to do this in a holistic way.

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So it's it's depending on your focus group, the culture it's getting to fill up, on the other hand, for the ones that are very advanced or to show them the ethical limits we need to respect as a company. Quite, quite a difficult topic, by the way. Yeah, yeah, it's a but again, the collective problem of the mindset, there are different groups who have to address and not everyone is a digital native and that different needs on the education.

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And we see this in the company. So when we ask this is one of our priorities and we have a chief digital officer on the executive committee with Tom Watson. The guy was really, really driving this to focus on the digital journey. But you have different user groups and. You need to balance this this cultural change, depending on the needs and on the on the progress, the. Yeah, it's a I would say it's a bumpy journey, to be honest, because.

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Already, the agreement, the fight against corruption needs to be a joint one between public and private sector is still under debate, but still needs convincing all involved parties.

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I mean, we are much better, to be honest. And maybe in the meantime, we have joint platforms for the public and private sector to be 20. G20 process is one. Now, the United Nations has certain platforms also on money laundering. There are joint working groups between public and private sector. And of course, you notice money laundering, transparency topics are key, but this is still it's still something we always have to have. And then and this is what we try to do this year.

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The G20 process in Saudi Arabia is to say we need a lighthouse project, private public partnership on at least one or two digital projects to to fight against corruption, because only if you have a living example, the people will buy in. And this global value chain passport, which would deliver, which we've developed a business that always said that we say a company has a digital passport and they ask the company information in there. And if you are a supplier, maybe if you use technology, you can use the passport to avoid a duplicate due diligence because it was already done by another company, for example.

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And then this can be used for public tenders to be admitted to public tenders and to know, for example, the ownership of the company is the beneficial ownership is in the digital passport and then the public and the company, people with integrity, a transparent bidder. But they do need you need the full collaboration between the public and private sector when the call is out that we are not there yet.

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Yeah, what is it? I mean, we are we are quite open to share publicly our learnings and lessons on the journey.

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I mean, we are. We are trying to really embrace this for our holistic ethics and compliance approach, and we have one as a publicly known example, we have teamed up with other pharmaceutical companies by one of them to develop a joint of block chain approach for supply due diligence in our part of our third party risk management. And we try to engage other pharmaceutical companies to showcase that. If we want to level the playing field, we need, of course, respecting the antitrust of work together and block chain could be the only technology that could be a way to get this.

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We worked get together with also the universities. We had students in the project to develop this. So we try to we need to bring academia and business together on this and not only as an example on this block chain supply on the diligence approach. And that's one of the topics we we want to try out and hope to get more traction from the public side. And although pharmaceutical companies. Yeah, absolutely, on the other hand, to be very honest, I mean, on a daily basis, we get offers from companies to support us, also commercial offers and and we we see this huge interest of companies to support us there, but also ask for understanding.

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We have also as even as a big company, a limit of ability. They'll take everyone on board. We have to prioritize on this side. But I see the huge appetite, not only in our company as see this across the industry for this and for this. When you started the podcast, this issue, what what should the companies know? This dialogue is so important that we understand each other. Yeah. Yeah, I mean, let's face the reality, there will be budget constraints for all functions and companies who are affected by the crisis and nearly everyone is affected by the crisis to one way or the other way.

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So there will be, of course, constraints. I see this and I always say this quite loudly on our conference as I am. I see this more as an opportunity. If the compliance colleagues are courageous and it means you have to leave, you are left to go to your.

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Just a. proponent the company and to be willing to take on broader responsibilities for ethics, risk management and compliance. I believe there's a big need for a holistic assurance approach.

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Companies, especially under Colvert llena, set up a joint bring into risk topics together with compliance.

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And there, I believe, a compliance officers, given their proven track record and risk management, often good communicators, they can take a lead there, but they have to be courageous to get out of their anticorruption corner as anti-corruption specialists, they have to have a broader mindset as risk leaders and understanding data and digital.

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And Ryoma at. Yeah, I mean, that's a journey. I mean, the compliance officer when I started in compliance many years ago is a compliance officer, was a police officer, but basically it's a company. And it was really an expert. And we had a good way to develop a compliance function. The someone who is partnering with the business, having the necessary independence, of course, but partnering on the Senate business. We we get many colleagues from the business and our clients, by the way, by the way, also superb I.T. colleagues and organization.

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And you need this kind of diverse education and background in ethics and compliance.

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I myself, I'm a lawyer, but I don't want to bash only lawyers into compliance. So I'm going to say I want to keep it from science, from the county department, from procurement, from finance to to have a holistic view. And this is this leadership journey and development from you and the compliance to an ethics risk and compliance set up is. Yeah, I mean, we can build what we discussed so far, and first of all, I think you will agree there is everyone needs to be open as a loon of Peter.

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We believe that this is absolutely necessary, and I myself, I'm alone on this because I repeat this. So this is absolutely, absolutely key. And then I don't care about the professional background. To me, the skills are important and the intrinsic intrinsic motivation for ethics, risk and compliance. I, I believe we need people who are willing to develop constantly constant us also. And therefore we also will offer at the latest we have an own ethics risk and compliance academy where we offer not only professional skills or soft skills, communication and our cultural journey.

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So an intrinsic motivation, you know, to do things differently and engage in these difficult dilemmas and.

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So openness, data and digital interest, at least intrinsic motivation to work and ethics, risk and compliance are much more important than having a law degree or to be an accountant or comptroller can be, but not not be conditional.

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So. Yeah. And they are a lot I mean, it starts, of course, with the Depression era, so I just had to cut into my own podcast about it. If you employ more and more artificial intelligence, where are the ethical boundaries? If you ask them who is at the end, the decision maker in an ethical dilemma? Is this the algorithm or is this still a human brain? What about the topic was a big topic for a new code of ethics, which is based on behavioral science, our own internal biases.

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We have often mirrored in artificial intelligence because the people are programmed. The algorithm brought their own biases into the algorithm. So, for example, you notice example, if you have a recruiting tool in place, screening all the applications, space and libraries, some SWAT came out and many companies will say that the algorithm preferred white male candidates, not diverse candidates. How does this come? And this comes because the people program, this brought their own biases into the idealism and then was duplicated.

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So these are these these are ethical dilemmas. We definitely we definitely have. And we have them in the pharmaceutical industry. Yes. We are dealing with patients, of course, all the time. Absolutely, absolutely, and we try to bring together with our human resources organization these topics already in the recruitment process, we call this hiring with integrity because we believe we need to bring these ethical dilemmas already in the recruitment process for the recruiters and for the candidates.

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I'm deeply interested in history, but I say young, I mean, I was after after school, I was a couple of years in the army, left the army then as a young army officer. And then I lost the question. And I only studied history because I'm deeply interested in history. But, you know, in history, you mainly are difficult to obtain your goal to become a professor at university. That's difficult.

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And you end up maybe doing something completely different and it'll all be better for lawyers with a lot of opportunities. And I was happy to survive. Looking back, I still believe it's a great, very broad opening story. But my really my personal interest is deeply and in history, but.

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Yeah, in this case, maybe a vodka, because it would be Mikhail Gorbachev. I always I mean, I would be so interested to understand his personal dilemma when he. Made the transition from the old Soviet Union with the glasnost and perestroika, which was, of course, brought that German unification as one of the results, but also a lot of dilemmas and topics because everything was changed. And I would be so interested to know what his personal dilemmas, the pressure he had about the ethical dilemmas, about the risks of the risks and Mikhail Gorbachev had, I believe he's one of the most I mean, greatest people potentially in history because he did something and I think he believed in it, which changed the whole history.

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And I would be hugely interested about oddity, about it in the moments and in the lonely nights. This would be would be Mr. Gorbachev for me. Absolutely, and that's that's definitely a joint effort. I really enjoyed the podcast. Thank you so much for all your efforts and helped a lot of people listen to it will find it interesting as well. They will, thank you.