Welcome to the newest addition to the Compliance Podcast Network, Compliance and Coronavirus. In this episode, I am joined by Sepideh Rowland, Vice President at K2 Intelligence FIN and head of managed services. She has over 20 years of regulatory compliance experience, including leadership positions at money services businesses, large financial institutions, and community banks. She is also Co-Chair of the U.S. Capital Chapter Advisory Board for ACAMS; as Co-Chair of the Advisory Board for the ABA/ABA Financial Crimes Enforcement Conference; and as an Advisory Board Member (former Chair) for the American Bankers Association Certified AML and Fraud Professional certification program.
In this episode, we consider the impact of the Payroll Protection Program on a bank’s Financial Crime Compliance Program; how has COVID-19 and PPP has impacted money laundering and fraud typologies; and conclude with how should banks think about their staffing models and resources.
Day: June 10, 2020
In this podcast, I visit with Vin DiCianni, founder of Affiliated Monitors, Inc. In it, we explore corporation culture and its relationship to ethics and compliance. We began with senior leadership. A company does not have an ethical culture unless the top management commits to it going forward. Employees not only listen to what they say but they watch how they act. Employees look for signals about what really counts in an organization. But you must then move down to implementation of this goal. Employees want to know if senior leadership is committed to the company’s core values. But equally important is a sense of organizational justice and fairness. Employees want to not only see they will be treated fairly but there is not a delineation of favorites and non-favorites in an organization. DiCianni emphasized that it is the senior leadership who really drives the alignment between incentives and performance.
The key is that there be an alignment between what top management says, coupled with the company’s core values and what the organization says together with what they do. This all comes from senior management getting out of their office and talking to employees in the field to see not only what they think but how they feel. No company aspires to be unethical and most assuredly employees do not want to engage in unethical behavior but if senior management does not talk to employees they will not know how their messages are being received. It does not take long when there is a disconnect between what senior management says and what the employees take away. It is a bit disconcerting how little top management really understand their employees. Because of this, senior leaders do not know what messages they are receiving, both verbal and non-verbal.
Under Part 1, Section D. Confidential Reporting Structure and Investigation Process, it stated in part, Properly Scoped Investigation by Qualified Personnel –What steps does the company take to ensure investigations are independent, objective, appropriately conducted, and properly documented? Your company should have a detailed written procedure for handling any complaint or allegation of bribery or corruption, regardless of the means through which it is communicated. The mechanism could include the internal company hotline, anonymous tips, or a report directly from the business unit involved.
You can make the decision on whether or not to investigate with consultation with other groups such as the Compliance Committee of the Board of Directors or the Legal Department. The head of the business unit in which the claim arose may also be notified that an allegation has been made and that the Compliance Department will be handling the matter on a go-forward basis. Through the use of such a detailed written procedure, you can work to ensure there is complete transparency on the rights and obligations of all parties once an allegation is made. This allows compliance to have not only the flexibility but also the responsibility to deal with such matters, from which it can best assess and then decide on how to manage the matter.
Three key takeaways:
- A written protocol, created before an investigation, is a key starting point.
- Create specific steps to follow so there will be full transparency and documentation going forward.
- Consistency in approach is critical.
Categories
Ham-fisted Leadership
Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode Matt Kelly and Tom Fox take a look at two examples of ham-fisted leadership; one by Facebook CEO Mark Zuckerberg and the second by NFL Commissioner Roger Goodell. Both also had to respond to employee near revolts over their poor leadership. For Zuckerberg it was his refusal to stop President Trump’s incendiary and race-bait tweeting. For Goodell, it was lack of acknowledge of the racist murder of George Floyd.
Resources
See Matt Kelly blog post, Two Tales of Ham-Fisted Leadership
