Day: January 30, 2021

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31 Days to More Effective Compliance Programs

Day 30 | What is a root cause analysis?


One of the biggest changes in the 2020 FCPA Resource Guide is the addition of a new Hallmark, entitled “Investigation, Analysis, and Remediation of Misconduct”, which reads in full:
The truest measure of an effective compliance program is how it responds to misconduct. Accordingly, for a compliance program to be truly effective, it should have a well-functioning and appropriately funded mechanism for the timely and thorough investigations of any allegations or suspicions of misconduct by the company, its employees, or agents. An effective investigations structure will also have an established means of documenting the company’s response, including any disciplinary or remediation measures taken.
In addition to having a mechanism for responding to the specific incident of misconduct, the company’s program should also integrate lessons learned from any misconduct into the company’s policies, training, and controls. To do so, a company will need to analyze the root causes of the misconduct to timely and appropriately remediate those causes to prevent future compliance breaches.
Ultimately, performing a root cause analysis is not simply a matter of sitting down and asking a multitude of questions. You need to have an operational understanding of how a business operates and how they have developed their customer base. Overlay the need to understand what makes an effective compliance program, with the skepticism an auditor should bring so that you do not simply accept an answer that is provided to you, as you might in an internal investigation. As Marks noted, “a root cause analysis is not something where you can just go ask the five whys. You need these trained professionals who really understand what they’re doing.”
Three key takeaways:

  1. A root cause analysis is now required if you have a reportable compliance failure.
  2. There is no one process for performing a root cause analysis. You should select the one which works for you and follow it.
  3. To properly perform a root cause analysis, you need trained professionals who really understand what they’re doing.
Categories
Daily Compliance News

January 30, 2021, the RoaringKitty edition


In today’s edition of Daily Compliance News:

  • RoaringKitty speaks. (WSJ)
  • Wells Fargo President pay cut. (WSJ)
  • OFAC ends probe of HB Fuller. (WSJ)
  • BaFin President canned. (WSJ)
Categories
The Affiliated Monitors Expert Podcast

How Ethical Culture is a Part of an Overall Ethics and Compliance Assessment


In this episode, I visit with Jay Rosen, VP of Business Development for Affiliated Monitors, Inc. (AMI). Corporate culture exists in the space between what an organization professes and what it does. In this series Jay and I will be exploring key aspects of corporate culture, including why it matters, what influences culture, the CCOs role in culture, assessing corporate culture and how to use that information to improve culture. In this episode, we consider how an ethical culture is a part of an overall ethics and compliance assessment.
 Highlights include:

  • Begin with framework for such an assessment, usually the compliance program itself.
  • Is your training both focused and effective?
  • Is there institutional fairness in your promotion and compensation programs?
  • Is there institutional justice around reporting, discipline and investigations?
  • Is your compliance program a paper program or is it fully operationalized?
  • Is there accountability in your organization?

For more information see Jay’s blog post How is ethical culture a part of an overall ethics and compliance assessment? on Corporate Compliance Insights.
For more information on Affiliated Monitors, Inc. check out their website here.