How EY Virtual optimizes compliance analytics for Honeywell

For years, well-known multinational conglomerate Honeywell International, which specializes in aerospace, building technologies, performance materials, and safety and productivity solutions, invested heavily in compliance efforts. The company was looking to take the next step in becoming best in class from a compliance perspective. Honeywell had a variety of manual processes that it wanted to automate and digitize to provide a more holistic view and to enhance transparency on its overall compliance performance worldwide, with the ultimate goal of delivering information more quickly to stakeholders.

“There needed to be a way to effectively communicate to the board, and to our most senior stakeholders, the effectiveness of our compliance system and status on a regular basis,” says Vic Miller, vice president, deputy general counsel, corporate secretary and chief compliance officer at Honeywell. “However, the tools we had at our disposal at the time weren’t effective in achieving that goal. They looked at individual data points, but they didn’t provide an overall comprehensive view of compliance.”

Eager to adopt a more proactive approach to achieving best-in-class compliance, Honeywell teamed up with EY professionals to develop a more comprehensive compliance framework. The result: an entirely data-driven scorecard that not only provides a consolidated, centralized view of compliance for communicating effectively with senior leadership but also enables Honeywell to drive year-over-year improvements in its compliance efforts.

This case study examines the strategies Honeywell employed to produce a powerful digital solution consisting of a compliance scorecard assessment and the role that strong leadership, a knowledgeable consulting collaborator, proper prioritization and immediate action played in sustaining positive change.

As part of an effort to assess its risk exposure, Honeywell identified compliance areas ranging from anti-corruption to cybersecurity to insider trading. However, each area had its own regulatory structure and challenges, making it difficult to consistently assess exposure to risks across the business.

Eager to establish a single set of standardized metrics, Honeywell looked to the U.S. Department of Justice (DOJ) and its guidelines for evaluating corporate compliance programs. Honeywell borrowed these guidelines and added one of its own — digital transformation — a set of distinct measurement criteria for determining the adequacy and effectiveness of its compliance initiatives. In addition to digital transformation projects, they include audit, culture, investigations, mergers and acquisitions, policy and procedure, resources, risk assessment, third-party management, and training and internal communications.

Honeywell’s next step involved populating its assessment framework using accurate and high-quality data. Aggregating the data needed to effectively drive the risk assessment required accessing a wide range of sources and several million data points from across the organization. To start, Honeywell asked compliance area directors to complete a tailored online survey to identify their most pressing compliance issues and their perceived risks of violating industry regulations.

Honeywell also solicited responses from employees via one-on-one interviews. The comments from the surveys and interviews were captured in the EY technology platform EY Virtual. In addition, documents describing Honeywell’s compliance processes and procedures were analyzed within the platform and provided important information. EY subject-matter resources were another valuable asset. They collaborated with Honeywell IT teams and data source owners to determine the feasibility of extracting meaningful insights from various data sources.

After obtaining valuable and insightful data sources, Honeywell cleaned and scrubbed data sets gathered from online surveys, employee interviews and program manuals, seeking the highest levels of consistency, reliability and accuracy. And because many organizations want to compare their compliance program elements, structures and processes with those of their industry peers, the EY team augmented Honeywell’s internal data with publicly available industry data and its own wealth of perspectives from around the world.

“By having a partner with a broad understanding of the marketplace, we gain access to peer data that allows us to know where we stand and how we can improve our compliance efforts,” Miller says. “That’s extremely valuable in terms of driving focus.”