Day: February 23, 2021

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The Compliance Handbook

Effective Compliance Program Hallmark: Training and Communication with Ronnie Feldman and Ricardo Pellafone


Effective Compliance Program Hallmark: Training and Communication with Ronnie and Ricardo
Organizations take measures to articulate their policies and guidelines realistically. Doing this ensures that they can promote their compliance and ethics programs to people with unique positions and obligations by meaningful preparation and exchanging knowledge relevant to them.
However, due to their limited understanding of the hallmarks of effective compliance, specifically training and communication, plus the amount of consideration and attention they provide to it, companies sometimes fall far short of the compliance goals.
While several companies and regulatory agencies assume that they treat the training and communication hallmark well, this is the area they sometimes curve out of their most vital point.
The reasons why most organizations struggle to fulfill the criteria of this hallmark can be:

  • Lack of daily scrutiny and continuing contact
  • For the employee, not ensuring preparation and policy coordination are appropriate.
  • Incorrect or insufficient assessment of preparation and policy efficacy
  • Not giving regard to the risk prioritization of training.

In today’s Compliance Handbook chapter, we’ll dive deeper into the fourth hallmark of effective compliance frameworks: training and communication. We’re joined by two experts in the compliance field, Ronnie Feldman and Ricardo Pellafone.
Key takeaways discussed in the chapter:

  • While training is valuable most of the time, it’s not a tool to an end in compliance. It’s a tool you use to prevent misconduct, but it’s not an end in itself. It fills a unique niche within the compliance officer’s means, but it’s compelling when used for the right purpose.
  • Discover how not to lose trust. Note that if compliance training is boring and preachy, people are annoyed at you for making them go through the experience. As a result, they don’t think well of compliance, which means they are much less likely to speak up to ask questions and report concerns.
  • Analyze who among the players in your organization had to undergo compliance training. Find answers to questions like, “Will the compliance training benefit the regular employee, or it should be those that are in the higher ends—with the authority to either create or control risk?”
  • Training is good, but also consider that people need reminding more than they need instruction.
  • Simplicity and utility are the keys! Your compliance framework should not be extensive and complicated. When things are designed well and they are useful, people will use them.
  • Have you ever been caught in a situation where you’re a manager, you have to approve an invoice from a third party. What are you looking for? That is something that pretty much no one is ever trained on what to do. This is the big difference between the traditional top-down model of training versus the training model used by Ricardo Pellafone. If you want to learn more about this training method, tune in to the chapter.
  • Comedy and entertainment principles can go along with compliance? Sure thing! We like trying new things and discover how well Ronnie blended these elements to create an effective compliance framework.

Order your copy OR copies of The Compliance Handbook: A Guide to Operationalizing Your Compliance Program. Save 25% off. http://www.lexisnexis.com/fox25

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The Affiliated Monitors Expert Podcast

The Continuing Evolution of Monitorships


In this podcast, I have been joined by Mikhail Reider-Gordon, Managing Director of Global Affairs at Affiliated Monitors, Inc. We have discussed various aspects of monitorships, including why independence matters, the American Bar Association’s (ABA) Guidelines on Monitors, Gordon’s professorial career at the International Anti-Corruption Academy, cultural differences between international and US domestic monitorships and the continuing evolution in monitorships. In this episode, we consider the continuing evolution in monitorships.
Just as compliance programs and the role of the Chief Compliance Officer (CCO) have evolved, the situations involving a monitor have evolved. We began with a consideration of some of Gordon’s thoughts about how the intersection of law and technology, including privacy, data management and data bias are really driving the conversation with clients around oversight and monitorships. Gordon began with the trend and growth in monitoring entities that have violated data privacy laws. Interestingly, this can come not from any overt or even poor decision on a company’s part or action. It could be from a data breach or it could be they misuse data. Gordon pointed to misuse such as Facebook, under evolving privacy laws. Here Gordon related that “Companies are a little on the back foot.”
The evolution of monitorships has also occurred around timing. Originally, monitors were brought in at the conclusion of an enforcement action. Now monitors are often brought in during and even before an enforcement action begins on a pro-active basis, to get out ahead of the problem. This can be to see if an issue exists or to remediate the issue before the conclusion of an enforcement action. If it is the former situation, it can help to prevent an enforcement action from even getting off the ground. If the enforcement action has already begun, the pro-active approach can help a company garner a declination or if one cannot be obtained prevent a multi-year, post-settlement monitorship from being mandated.
For more information on AMI, check out their website. For more information on Mikhail Reider-Gordon, check out her LinkedIn profile.

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The Compliance Life

Natalia Shehadeh- Key Lessons learned and where the CCO chair headed in 2025 and beyond


The Compliance Life details the journey to and in the role of a Chief Compliance Officer. How does one come to sit in the CCO chair? What are some of the skills a CCO needs to success navigate the compliance waters in any company? What are some of the top challenges CCOs have faced and how did they meet them? These questions and many others will be explored in this new podcast series. Over four episodes each month on The Compliance Life, I visit with one current or former CCO to explore their journey to the CCO chair. This month, my guest is Natalia Shehadeh, Chief Compliance Officer at ABB. In this fourth and final episode with Natalia we look at some of the key lessons she has learned and where the CCO chair may be headed in 2025 and beyond.
Natalia felt they were all unique experiences, joining corporate families at different times of opportunity and challenge.  She identified culture, behavior and inclusion as key and need to be the guiding lights for our field.  The greater sense of community and common purpose within and cross industries we can bring to the criticality of integrity the better.  The more inclusive we can make our enterprise cultures the stronger they will be.

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Daily Compliance News

February 23, 2021, the Want a Challenge edition

In today’s edition of Daily Compliance News:

  • Lay me down in the land of Chinese cotton. (WaPo)
  • HSBC names interim CCO. (NYT)
  • Trump can’t block records subpoena. (NYT)
  • WeWork nears settlement with founder. (WSJ)
Categories
Innovation in Compliance

Fighting The Scourge of Human Trafficking with Dan Wager


 
Tom Fox’s guest on this week’s show is Dan Wager, VP of Global Financial Crime and Compliance at LexisNexis Risk Solutions. Dan is an executive with expertise in financial crime compliance and investigations. He and Tom discuss human trafficking, fraud and identifying the patterns of suspicious behaviors within an organization. Tom emphasizes, “All compliance professionals need to understand not only the risks around this area but also what the solutions are… The pandemic has caused an increase in this area because it’s closed down other business opportunities for the bad guys.” 
 

 
It’s All About Money
Human trafficking, sex trafficking, money laundering and the like are not crimes of passion, Dan points out. “Their focus is to make money and that desire does not stop during an economic crisis and a global pandemic… It all comes back to moving money.” The way in which these crimes are committed is changing, and compliance professionals need to be aware. Tom comments that commercial corporations are being targeted more now because “they’re not set up to fight this scourge.” Dan explains why this is so and gives an example of how banks have been inadvertently used in PPP fraud recently. “These things move together – disadvantaged businesses looking for funds and illicit financiers looking for outlets, people on the narcotics or human smuggling realms looking for ways to make money and retain money in a difficult environment – they all fit together.”
Reputational Risks
Tom comments that your company’s reputation will be severely tarnished if you are found to be even remotely involved in human trafficking and human slavery. Dan says that most companies understand this but are struggling to detect it. You don’t want to be a company that purchased PPE from non-vetted suppliers because you’ll go down along with them, he warns. The reputational damage is just one part of the equation. “What do you think happens to those kinds of workers when you have counterfeit and hard-to-get PPE, in this kind of environment where they can’t even travel across the border or seek other employment? It is exploitation and health dangers on an epic scale,” Dan remarks.
Working From Home & Red Flags
Tom and Dan discuss the increased risk because of the move to work-from-home. Tom also asks about the risk that returning to work may bring. The speed with which remote work had to be implemented opened up new avenues for fraud, Dan says. Work computers are now sitting alongside personal network computers, and bad actors are using various ways to infiltrate both. Few companies are equipped to deal with these changed circumstances, which leaves them vulnerable. The way we conduct business has changed permanently, Dan remarks. This is good in many respects, but it opens up opportunities for fraud. He shares some red flags compliance professionals and financial institutions should look out for. If there is a dramatic change in how a company usually does business, that’s a major red flag, Tom and Dan agree.
Resources
Dan Wager | LinkedIn
LexisNexis Risk Solutions