ANSI Notice on a ANSI assessment Impartiality Review of a ACB resulting from a Merger or Acquisition

PUBLIC NOTICE PRO-NT-125 Issued: 2019-2-6, Revision: 0

The objective of this notice is to informs ANSI assessment teams on processes and recommendations on areas of focus when assessing an accredited certification body's (ACB) impartiality assessment resulting from a Merger or Acquisition.
2.1Impartiality: presence of objectivity
NOTE 1 Objectivity is understood to mean conflicts of interest do not exist or are resolved so as not to adversely influence the activities of the body.
NOTE 2 Other terms useful in conveying the element of impartiality are independence, freedom from conflicts of interest, freedom from bias, freedom from prejudice, neutrality, fairness, open-mindedness, even-handedness, detachment, and balance.
2.2Mergers and acquisitions: aspects of strategic management, corporate finance, and management dealing with buying, selling, dividing, and combining different companies and similar entities that can help an enterprise grow rapidly in its sector, location of origin, or new field or location, without creating a subsidiary, other child entity, or using a joint venture.
3Effective Date
September 1, 2017
4.1The Lead Assessor should request the following during an assessment of impartiality resulting from a merger/acquisition:
a)An organizational chart for the merger/acquisition, which shows the relationship to the ACB. The chart should answer if personnel are part of the parent organization or a newly-formed separate legal entity. The organizational chart should show the relationships of all personnel.
b)The scope of work conducted by all parts of the organization must be stated. Both the merged/acquired organization and the ACB scope of activities must be presented.
c)Identity of the processes used to ensure possible risks to impartiality were addressed. Risks to impartiality may occur as a result of ownership, organizational management, board governance, personnel, shared resources, finances, contracts, marketing, consultation, payment of sales commissions, or other inducement for the referral of new clients.
d)Objective evidence that the impartiality risks were captured. Share actions to either mitigate the risks or share the assessment made that risks were already addressed in existing or proposed ACB processes.
e)Explanation of how processes included engaging the external mechanism related to impartiality and if the mechanism review process is changing as a result of the merger/acquisition.
4.2As part of due diligence, typically a spreadsheet or other tool captures the results of the ACB's impartiality assessment. Whichever means are used, it should include the following:
a)Risk to impartiality
b)Possible impact
c)Risk ranking to demonstrate the seriousness of the impact
d)Mitigation actions required to reduce risk to an acceptable level
e)Actions implemented
f)Follow-up evidence to ensure effectiveness of the actions identified
4.3To assist in your assessment, the following are examples of risk areas for consideration:
a)Review if ACB leaders have financial interest in the merged/acquired company
b)Review organizational chart, reporting relationships, and/or separations of the merged/acquired company and ACB to determine potential risks to ACB operations
c)Review the website of the merged/acquired company and parent organization to see if reference is made to the ACB as a means to enhance business opportunities
d)Determine if the finances from the ACB are funding the merged/acquired company. Determine steps taken to ensure the continued functioning of the ACB as independent and capable. The latter ensuring the ACB has required resources to continue functioning.
e)Determine if there is a Board of Directors/Trustees, with a common membership on the two boards (ACB and the merged/acquired company). Determine if the Board's scope is fiduciary or includes operational/management direction of the ACB and other parts of the organization.
f)Determine if the certification staff is involved in design, manufacture, installation, distribution, or maintenance of a product, process, or service or is a provider of consulting activities (see 4.2.6 of ISO/IEC17065), for which the ACB provides certification
g)Determine if goals for the ACB's financial success are tied to the financial success of the merged/acquired company
h)Determine via interview or sales materials if the Sales Team sells both consulting services and certification services. Determine if the organization offers bundled services (consulting and certification) to reduce the cost/time for certification over those that are not using their consulting services.
i)Determine if shared resources between the merged/acquired company and the ACB are set-up or will be set-up. For example, if the same Human Resources and Finance Departments are used by both the ACB and merged/acquired company, are documented agreements in place to ensure confidentiality and impartiality of the shared resources.
j)If the merger or acquisition is with a trade association/industry group {IRS 501(c)(6)} for which the membership may wish to direct the ACB's certification customers, offerings, or certifications, determine if protections exist to ensure the ACB's independence (this approach is valid in the US, and we will use similar regulations in other countries).
k)Determine if the ACB databases are integrated with the newly merged/acquired company, permitting the newly merged/acquired company access to confidential information within the ACB. Determine if firewalls or security have been established and how this information is managed and safeguarded.
4.4Process procedure defined as follows: