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Citigroup Implementing Ethics Program
Tuesday March 1, 5:31 pm ET
By Eileen Alt Powell, AP Business Writer
Citigroup Begins Implementing Five-Point Ethics Program Aimed at Expanding Training

NEW YORK (AP) -- Stung by a series of scandals in the United States and abroad, Citigroup Inc. on Tuesday began implementing a new ethics policy aimed at expanding training and accountability for managers and rank-and-file workers.

Charles O. Prince, Citi's chief executive officer, kicked off the initiative in meetings with workers in the company's New York headquarters and, later, in Sioux Falls, S.D., where the bank's credit card operations are based.

"Our goal is to make explicit what is implicit," Prince told The Associated Press. "Every employee, starting with me, has the ability to refocus on our reputation and our integrity and our long-term franchise."

He said he wants Citi to be "the most-respected financial services company" in the world.

The initiative comes as the bank is grappling with regulatory problems at home and abroad.

Citi was forced to close its private bank in Japan last year for ethical lapses. In Europe, the bank is under investigation for bond trading that roiled European markets.

Before that, Citi got caught up in a number of domestic scandals.

In April 2003, it was part of a $1.4 billion settlement with federal regulators over biased advice from analysts. Last year, Citi paid $2.58 billion to settle a class action suit involving investors who bought WorldCom Inc. securities before its 2002 collapse. The bank also has been named in cases stemming from the Enron Corp. bankruptcy.

Prince said a five-point program was developed with input from internal "town hall" meetings as well as discussions with employees of companies including health care products maker Johnson & Johnson of New Brunswick, N.J., and computer maker Dell Inc. of Round Rock, Texas.

The program, which the company has titled "Our Shared Responsibilities," will be phased in over the next 12 to 18 months.

Under the plan, Citi will expand training for all employees, including senior managers. Improved communications will include "voice of the employee" input into policies and an ethics "hot line."

Citi also said it would step up executive coaching and development programs as well as talent review processes; create a companywide performance appraisal program; and strengthen compliance and audit controls.

As part of the program, the 3,000 employees who are senior managers will be required to retain 25 percent of the Citi stock they are awarded or purchase under incentive programs. Top tier executives must retain a 75 percent stake.

Citigroup, the nation's largest financial institution, also announced last month that it was streamlining its corporate structure so operations can be managed more efficiently.

Citi, which operates in more than 100 countries, has 300,000 employees worldwide.

Citigroup shares rose 16 cents, or 0.3 percent, to $47.88 in Tuesday trading on the New York Stock Exchange.

-- posted by SteveT